Delta owns 49% of Virgin Atlantic. Now Air France KLM is going to acquire Virgin Group’s 31% stake in the carrier. So Virgin Atlantic will be 80% owned by joint venture partners Delta and Air France. Here’s Richard Branson’s goodbye letter where he says he’ll be very much involved and doesn’t mention the £220 million.
Copyright: boarding1now / 123RF Stock Photo
Delta and Virgin have a revenue-sharing joint venture across the Atlantic, and so do Air France KLM, Delta, and Alitalia. This will all be combined into one joint venture.
Delta and China Eastern (which Delta owns a stake in) will each take a board seat and 10% ownership in Air France KLM.
China Eastern is the most subsidized Chinese airline. Alitalia is heavily subsidized and has been living off of Etihad’s money. And Air France is still partially government-owned, having divested a portion of its stake as a requirement for acquiring KLM. None of this bothers Delta as much as everything they pretend to stand for suggests it might because it benefits Delta.
Delta has stakes in Gol and Aeromexico and is rumored to be considering a 24% stake in Jet Airways. Delta may not see a future of growth in the U.S. market but they’re doing something about it, going global.
Delta can’t own more of Virgin Atlantic, but Air France KLM can. And Delta can buy part of them. And China Eastern can buy part of Air France KLM, and Delta can buy part of them. And together they’ll have more slots at London Heathrow.
All of this will be interesting to the extent Brexit finally occurs. Existing foreign ownership levels might be grandfathered. This will need to be negotiated, and of course IAG owns not just British Airways but also Iberia, Vueling, and Aer Lingus.
There’s little here that benefits customers. Joint ventures, with government approval, allow airlines to coordinate schedules and pricing and to share revenue instead of competing. However bringing Virgin into a joint venture with Air France KLM should pass anti-trust muster since they’ll remain so much smaller than British Airways (and American) at London Heathrow and this won’t increase concentration in other European markets since Virgin lacks a European route network.
Do you realize now how many Boeing 787’s Delta owns a percentage of (the jet they do not want since the A350 is “better” and not made in the US). 😉
It’s an orgy. Everyone sleeping with everyone so that no one will know who’s boeing it is.
For once you have an accurate title Gary, you can’t keep up and aren’t nearly as astute about the airlines as you think you are.
@Larry Go away.
I honestly don’t care what you wrote in the article, you earned my undying admiration for busting out a relevant Soap reference.
If you can weave in Benson, I will publicly proclaim my love for you.