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News Link • Transportation: Air Travel

Here's Why Delta Bought A Huge Chunk Of Virgin Atlantic

 The joint venture is not unexpected. The airline industry is consolidating in general, in response to rising oil costs, shrinking profit margins, and limited airport slots.

United Airlines and Continental have joined; British Airways and American Airlines have a partnership; Delta already works with Air France and KLM.

For Delta, the motivation to invest in Virgin is clear: Richard Branson's airline has three percent of the highly coveted spots at London's Heathrow airport. At a press conference this morning, Delta CEO Richard Anderson said the New York to London route is the world's most profitable by a wide margin.

Delta is expanding in New York, with new terminals and renovations at JFK and LaGuardia, and needs more space in London to match.

But the debate in the UK over how to get more planes into London has gone nowhere, as competing plans to expand the airport and build a new one in the region all have significant downsides and limited support.

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