Virgin Atlantic teams up with Delta after stake deal

Virgin Atlantic has agreed to set up a transatlantic joint venture with Delta after the United States carrier bought a 49 per cent stake in Sir Richard Branson's airline for $360m (£224m).

The airlines will share costs and revenues on routes between Britain and North America, which will comprise a total of 31 round-trip flights a day, including nine from Heathrow to JFK in New York and Newark in New Jersey. The joint venture is related to Delta's acquisition of Singapore Airlines' near-half stake in Virgin Atlantic, the company set up by Sir Richard Branson in 1984 in which he retains a controlling 51 per cent share.

The agreements were revealed after British Airways' head, Willie Walsh, continued his long-running spat with Sir Richard. Mr Walsh hit back at Sir Richard's offer of a £1m bet on whether the Virgin Atlantic brand would disappear, saying he'd back a wager – if the stake was a "knee in the groin".

Mr Walsh, chief executive of BA's owner International Airlines Group, had said the Virgin Atlantic brand would disappear if Delta succeeded with its bid for Singapore Airlines' stake. That led to the airline's founder dismissing Mr Walsh's words as "wishful thinking and totally misguided" and saw Sir Richard say: "Rather than suing them on this occasion, I will pay £1m to their staff if Virgin Atlantic disappears within say five years. If not, BA pays our staff £1m."

But Mr Walsh claimed Sir Richard's terms aren't clear, or fair. He said: "[Sir Richard] says he intends to carry on flying for many years. Is he going to be the 51 per cent owner of Virgin Atlantic in five years from now? If he wants to bet that, I think it would be an acceptable bet. But he's a billionaire banker – allegedly – and I don't think a million pounds would hurt him. I don't have a million pounds, so the bet should be as painful to him as it would be to me. A knee in the groin would be acceptable."