Will Delta Soar on This New Deal?

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Singapore Airlines is preparing to sell its 49 percent stake in the British carrier Virgin Atlantic. As Reuters reported on Monday, sources have said that Delta Air Lines (NYSE:DAL) may be interested in the deal as it will give the carrier more landing slots at London’s busy Heathrow Airport.

Why Would Delta Want More Slots at Heathrow?

“Airlines like Delta have long hoped to break into London’s capacity-constrained Heathrow airport, a lucrative hub for corporate passengers where landing slots are generally hard to acquire,” Reuters said. “Virgin Atlantic is the second-largest carrier at Heathrow after IAG’s British Airways.”

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Delta’s interest in the stake is also part of a larger trend. A series of mergers, including United Airlines’ (NYSE:UAL) acquisition of Continental last year, have begun to reconfigure the airline industry.  According to The New York Times, airlines have looked to consolidation as a means to restore profitability as oil prices remain high and the economic outlook stays uncertain.

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