There’s been a further shake-up in the airline business in Europe after Air France, KLM, Delta Air Lines and Virgin Atlantic announced a new strategic joint venture on flights across the Atlantic. As part of the agreement, the Air France-KLM Group has purchased a 31% stake in Virgin Atlantic, worth £220 million. With 49% of the carrier already owned by Delta Air Lines, the Virgin Group’s share has fallen to a minority stake of 20%.
The airlines say the new four-way joint venture will offer, “the most comprehensive transatlantic route network”, with 300 daily flights across the Atlantic. The partnership is intended to strengthen these airlines’ offerings in a highly competitive market against the British Airways-American Airlines transatlantic joint venture and new low-cost, long-haul competitors.
Virgin Atlantic said the partnership, which is planned to run for at least 15 years, would boost its passenger feed from Europe at Heathrow where the airline is slot constrained. Virgin Group Chairman Sir Richard Branson will retain chairmanship of the carrier. With 80% of the airline his company founded in 1984 now in foreign hands, he struck a valedictory tone in an open letter to staff, writing: “As I get a little older, I want to be certain that all the necessary building blocks are in place for Virgin Atlantic to continue to prosper and grow.”
Virgin Atlantic will remain independent and continue to fly under its own brand and with a UK operating certificate, the airlines said. The carrier currently operates 14 Boeing 787-9s (three more are to be delivered), seven Airbus A340-600s, eight A330-300s and eight 747- 400s, with 12 A350-1000s due from 2019. Mark Broadbent