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Air France-KLM buys into Virgin as Branson relaxes control

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Air France-KLM buys into Virgin as Branson relaxes control

Unread post by bimjim » Thu Jul 27, 2017

http://www.travelweekly.co.uk/articles/ ... es-control

Air France-KLM buys into Virgin Atlantic as Branson relaxes control
Ian Taylor
Jul 27th 2017

Air France-KLM will acquire a 31% stake in Virgin Atlantic in a deal with Sir Richard Branson’s Virgin Group. Delta Air Lines and fellow SkyTeam alliance partner China Eastern Airlines will each take a 10% stake in Air France-KLM in a parallel deal.

Air France-KLM will pay £220 million for the stake in Virgin Atlantic, relegating the carrier’s founder and former owner Branson to a 20% stake. Delta Air Lines retains 49% of Virgin Atlantic, a stake it acquired from Singapore Airlines in 2012, making it now the largest shareholder in the UK carrier.

However, Virgin Atlantic remains majority-owned by EU stakeholders in compliance with Brussels’ rules on ownership and control of airlines.

Announcing the deal today, Sir Richard 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.” In a letter to staff, he wrote: “Today is an exciting day for Virgin Atlantic and all of our team.”

Virgin Atlantic chief executive Craig Kreeger added: “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.”

Delta and China Eastern will acquire new shares in Air France-KLM conferring 10% stakes for each through capital increases totalling €751 million. The deals are subject to regulatory approval, and to the approval of Air France-KLM shareholders.

Air France-KLM, Delta and Virgin Atlantic announced the signing of a memorandum of understanding to combine the existing transatlantic joint-ventures between Air France-KLM, Delta and Alitalia, and between Delta and Virgin Atlantic.

The French-Dutch carrier already has a joint-venture agreement with China Eastern and partner Delta holds a 3.2% stake the Chinese carrier. Air France-KLM also has a joint-venture with China Southern. The airline said it would have the same on the Virgin Atlantic board as Delta.

Jean-Marc Janaillac, Air France-KLM chairman and chief executive, described the deal as “unprecedented” and said: “This partnership gives Air France-KLM a leadership position in the worldwide airline industry. With Delta and Virgin Atlantic we are reinforcing our transatlantic alliance, making us the number-one alliance between Europe and the US. With China Eastern, we are consolidating our position in a high-growth market.”

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