Find out about the £220m deal
Sir Richard Branson’s Virgin Group is selling 31 per cent of its 51 per cent majority stake in Virgin Atlantic, which the tycoon founded in 1984, leaving the group with just 20 per cent.
Air France-KLM will acquire a 31 per cent stake in Virgin Atlantic in a deal worth £220m as part of a joint venture with US airline Delta, who will become majority shareholders retaining 49 per cent.
The three airlines said in a joint statement that the long term joint venture would ‘offer customers access to the most comprehensive transatlantic route’ and will allow passengers to enjoy ‘convenient flight schedules with competitive fares and reciprocal frequent flyer benefits, including the ability to earn and redeem miles across all carriers.’
Jean-Marc Janaillac, CEO, 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.”
In an open letter to staff Branson spoke of the airlines history both good and bad over the past 33 years; he took aim at long term nemesis British Airways and touched on Brexit.
He said: “We’ve had to endure a consistently uneven playing field with British Airways keeping a stranglehold on Heathrow slots, enabling it to feed its long-haul operation from a myriad of short haul flights across the UK and Europe.”
This deal is hoped to combat this by opening up the airlines access to the network and connections the other carries have.
Branson said: “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.”
Suggesting that the UK’s decision to leave the EU may have been a factor in the deal he said: “Brexit before it’s even happened, has had a negative effect on the financial performance of both our holiday company and the airline, principally due to the collapse in the value of the pound.”