Air France-KLM has confirmed it is renegotiating with Virgin Atlantic the terms of their planned transatlantic joint venture with Delta Air Lines, after the UK carrier’s majority shareholder Richard Branson disclosed that he had scrapped a plan to sell a stake to the Franco-Dutch group.
Air France-KLM has confirmed it is renegotiating with Virgin Atlantic the terms of their planned transatlantic joint venture with Delta Air Lines, after the UK carrier’s majority shareholder Richard Branson disclosed that he had scrapped a plan to sell a stake to the Franco-Dutch group.
The group says the two parties are working toward “an agreement whereby Air France-KLM will not acquire a stake in Virgin Atlantic, without any impact on Air France-KLM’s position in the commercial Delta-Virgin Atlantic-Air France-KLM joint venture”.
Under the previous plan, revealed in 2017, Air France-KLM had been set to acquire a 31% Virgin Atlantic stake as part of the UK carrier’s inclusion in an existing joint venture between the Franco-Dutch group and Delta.
The deal would have reduced Branson’s stake in Virgin Atlantic to 20%. Delta holds 49%.
On 2 December, Virgin Group published on its website a letter by Branson to Virgin Atlantic employees in which he revealed his decision not to proceed with the share sale following the US Department of Transport’s approval of the joint venture in November.
Air France-KLM acknowledges that its acquisition of a Virgin Atlantic shareholding is “no longer necessary” and says the expanded joint venture will be activated “in the coming weeks”.
As part of the preparations, the three parties Air France-KLM, Virgin Atlantic and Delta have agreed “simplified decision-making processes that will enable the joint venture to deliver its full synergy potential”.
Describing the JV as “key” to its transatlantic business, Air France-KLM vows to “pursue its ambitious investment plan to regain its leadership position”
