Virgin Atlantic is to expand its transatlantic partnership with Delta by forming an “enhanced” joint venture with Air France-KLM.
The deal will also see Air France-KLM buy a 31 per cent stake in Virgin Atlantic from the Virgin Group for £220 million – Virgin Group will retain a 20 per cent shareholding in Virgin Atlantic, which will continue to operate independently as a UK airline under the Virgin brand.
Virgin Atlantic already operates a transatlantic joint venture with Delta, which owns 49 per cent of the UK airline. Delta also has a separate transatlantic JV with Air France, KLM and Alitalia.
The three airlines said the expanded joint venture, which will also include Alitalia, would offer 300 daily flights across the Atlantic. They added that the JV would establish a partnership “with a duration of at least 15 years”.
Sir Richard Branson, founder of Virgin Group, 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.”
The new joint venture will need to win approval from shareholders and regulators.
Jean-Marc Janaillac, CEO of 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 US via 12 hubs on both sides of the Atlantic.”
It has also been announced that both Delta and China Eastern will buy separate 10 per cent stakes in Air France KLM for €375 million each.