Virgin, Continental To Code Share

Continental Airlines and Virgin Atlantic late last week confirmed plans to code share between New York/Newark and London, and on eight other routes, replacing the Delta and Virgin code-sharing relationship which will end later this year.

If governments approve the blocked-space relationship, which lets one airline buy seats on the other's flights and sell them as their own, Virgin will add a second daily flight and Continental will add two dailies between London and Newark. Continental already flies twice a day from Newark to London and Virgin flies London-JFK.

Airline analysts were a bit surprised about the news but agreed that Continental would be a better fit in terms of feeding Virgin's New York flights. "From Virgin's perspective, a deal with Continental makes a lot of sense," said Bankers Trust analyst Vivian Lee, pointing out that while Delta has 19 domestic cities and 22 flights into JFK--where Virgin has two dailies--Continental has 53 cities and 212 flights that could feed two Virgin dailies at Newark. "In that regard, Continental's superior hub operations increase its value as a code-share partner by providing an array of seamless connections," Lee said. "The difference between Continental and Delta is staggering--it makes all the sense in the world."

Virgin and Continental also will code share on London to Boston, Washington-Dulles, Los Angeles, Miami, Orlando and San Francisco, as well as Manchester to Orlando. Delta has a larger presence than Continental in all of Virgin's U.S. destinations except New York. Continental also wants a Cleveland-London route; the carrier currently serves London Gatwick and Manchester airports in England.

Asked whether the possibility of open skies influenced the partnership, Delta spokesman Dean Breest, said, "given the opportunity, we'll serve Heathrow, but the Virgin partnership has been a great commercial solution to the regulatory problem of not being allowed to serve Heathrow.