Richard Branson keeps control of Virgin Atlantic in new Air France-KLM pact
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
Virgin Group founder Richard Branson will keep control of his flagship airline Virgin Atlantic Airways under a revised deal with Air France-KLM.
Virgin and Air France-KLM have agreed to drop plans for Virgin to sell a 31% stake in the London-based carrier for £220 million ($279 million), Branson said in a letter to employees posted on his blog on Monday. The deal was part of a 2017 pact to form an expanded transatlantic partnership between Air France, Delta Air Lines, KLM and Virgin Atlantic.
“We have agreed (subject to contract) with our new joint venture partners, that our family will continue to hold the 51 percent of Virgin Atlantic shares we own,” said Branson. “We’ll also continue to work extremely closely with our partners investing together in a thriving airline and holiday company.”
The stake sale was described by airline executives in 2017 as necessary to allow the airline management teams to more closely align and work together.
“Air France-KLM’s acquisition of a stake in Virgin Atlantic is no longer necessary and are negotiating an agreement whereby Air France-KLM will not acquire a stake in Virgin Atlantic,” the Paris-based carrier said Wednesday. Air France-KLM added that the partners can achieve the commercial benefits of their partnership without the investment.
In November, U.S. authorities approved the expanded joint venture, which allows the four carriers to operate as essentially a single airline between Europe and the U.S. The deal will also allow Virgin to more closely coordinate connecting itineraries between the U.S. and Continental Europe over its London hub with Air France and KLM.
The four airlines have yet to say when the new partnership will be implemented. It replaces two separate agreements, one between Delta and Virgin Atlantic that covers just the U.S.-U.K. market, and a second between Air France, Alitalia, Delta and KLM that covers routes between the U.S. and continental Europe.
Alitalia has been dropped from the new deal due to its financial difficulties. However, executives of both Air France and Alitalia have said that the Italian carrier will rejoin the partnership as a so-called “associate member” in the future.
Together, Air France, Delta, KLM and Virgin Atlantic are scheduled to fly just over a quarter of all seats between Europe and the U.S. in 2019, according to Cirium data.
Updated with Air France-KLM statement on Wednesday.
Featured image by Loop Images/Universal Images Group via Getty Images.
Welcome to The Points Guy!
Earn 90,000 bonus miles after you spend $3,000 in purchases within the first three months of card membership. Plus, earn a $200 statement credit after your first Delta purchase within the first three months. Offer ends 7/28/21.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Limited Time Offer: Earn 90,000 Bonus Miles after spending $3,000 in purchases on your new Card in your first 3 months and a $200 statement credit after you make a Delta purchase with your new Card within your first 3 months. Offer expires 7/28/2021.
- Limited Time Offer: Plus, get a 0% intro APR on purchases for 12 months from the date of account opening, then a variable 15.74%-24.74%. Offer expires 7/28/2021.
- Accelerate your path to Medallion Status, with Status Boost®. Plus, in 2021 you can earn even more bonus Medallion® Qualification Miles (MQMs) to help you reach Medallion Status.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights.
- Fee Credit for Global Entry or TSA Pre✓®.
- Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees