Air France-KLM Group takes 31 per cent stake in Virgin Atlantic

Air France-KLM Group takes 31 per cent stake in Virgin Atlantic

Air France-KLM Group, Delta Air Lines and Virgin Atlantic have announced their intention to expand their strategic partnership and offer customers access to the most comprehensive transatlantic route network via an extensive joint venture.

Under the deal, Air France-KLM will acquire a 31 per cent stake in Virgin Atlantic from the holding currently held by Virgin Group.

The stake will be priced at £220 million.

Virgin Group will retain a 20 per cent stake and the chairmanship of the carrier, while Delta will retain its 49 per cent stake in Virgin Atlantic.

Jean-Marc Janaillac, chief executive, Air France-KLM, said: “With our partners Delta and Virgin Atlantic, we are pleased to reinforce our transatlantic partnership, offering our customers even more choice between Europe, UK and the United States via twelve hubs on both sides of the Atlantic.”

ADVERTISEMENT

The long-term joint venture would offer convenient flight schedules with competitive fares and reciprocal frequent flyer benefits, including the ability to earn and redeem miles across all carriers.

The benefits would also include co-location of facilities at key airport hubs to improve connectivity times for customers, as well as access to each carriers’ airport lounges for premium customers.

Craig Kreeger, chief executive, Virgin Atlantic, said: “We built the Virgin Atlantic brand by providing customers with the choice they deserve and a travel experience they love.

“We couldn’t be more excited that the next stage of our growth will be at the heart of the strongest partnership for customers traveling between Europe and North America.

“Together with our friends at Air France-KLM and Delta we will build on this vision of our teams creating irresistible experiences for customers flying on our network.”

The enhanced joint venture, including Alitalia, would become the airline partnership of choice for customers, offering more than 300 daily non-stop transatlantic flights and increasing competitive routings with offerings across key business markets including Amsterdam, Atlanta, Boston, Cincinnati, Detroit, Los Angeles, London Heathrow, Minneapolis-St Paul, New York-JFK, Paris-CDG, Salt Lake City and Seattle.

Richard Branson, Virgin Group founder, said: “Virgin Atlantic has made a big difference to people’s flying experience over the past 33 years and transformed the airline industry for the better.

“This is a fantastic opportunity to extend our network and create a stronger customer champion, as well as being extremely beneficial to our people and the Virgin Atlantic brand that our customers love dearly.”

The enhanced joint venture would establish a combined partnership with a duration of at least 15 years.

All transactions are subject to execution of definitive agreements and receipt of final shareholder, board, and regulatory approvals.

Virgin Atlantic would retain its independence as a UK airline with a UK operating certificate, and will continue to fly under the Virgin brand.

Ed Bastian, Delta chief executive, commented: “By working even more closely with our great partners at Air France-KLM and Virgin Atlantic, together we will develop a path to increase competition across the Atlantic that will spur additional benefits for customers, employees and shareholders.”