10:54 am December 11, 2012, by Christopher Seward
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If you think you’ll see a big drop in airfares to London and the rest of Europe from the big deal announced Tuesday between Delta Air Lines and Virgin Atlantic Airways, think again.
Consumer expert Clark Howard says the opposite is more likely: Fares will be higher.
“What’s going on right now with travel from the U.S. to Europe is everthing is being locked up into three cartels, and the result is that airfares to Europe have gone up quite a bit,” Howard told WSB radio after Delta announced it was acquiring a 49 percent stake in London-based Virgin. “This just accelerates that [with] definitely higher fares.”
Howard said the $360 million deal allows Atlanta-based Delta, the largest carrier serving Hartsfield-Jackson International Airport, to compete more successfully in “the world’s most important international business market, which is London.”
The addition of Virgin to Delta’s alliance with European carriers Air France and KLM will make it a more powerful partnership as Delta tries to gain a bigger share of the high-paying business travel market.
Bigger, however, will not mean better when it comes to airfares. “Definitely not better airfares,” Howard said. “This is not what this is about. This is about Delta being able to be more competitive for premium priced business travelers.”
Delta will be able to marry its extensive transAtlantic route system with Virgin’s “fantastic” system across Europe and Asia. “This is a very good strategically for Delta.
Delta investors, however, could be among the beneficiaries. The airline’s shares were trading higher on Wall Street hours after the announcement.
“If you have Delta stock, this could be very good,” Howard said.
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