Delta, Air France-KLM and Virgin Atlantic are combining their
partnerships into a single combined joint venture, the carriers announced.
As a part of the expanded joint venture, Delta is investing
€375 million to acquire a 10 percent stake in Air France-KLM, also gaining a
seat on the Air France-KLM Board of directors. Air France-KLM, meanwhile, will
acquire Virgin Group's 31 percent stake in Virgin Atlantic, an approximately
£220 million investment. Delta already has a 49 percent stake in Virgin
Atlantic.
"Delta has helped us considerably with feed from
America, but because we don't have more slots at Heathrow or Gatwick, we're
unable to enjoy feed from Europe or provide extra onward journeys for those
customers we are now carrying to London," Virgin Atlantic founder Richard
Branson said in a letter posted online on Thursday. "Today, I'm delighted
to say that we've agreed with Air France-KLM and Delta our collective intention
to form an enhanced joint venture, including Alitalia, which will be extremely
beneficial to our airline, our customers and the brand we all love so
dearly."
Branson added that part of the arrangement was that the
Virgin Atlantic brand continue to exist, and he remains the largest individual
shareholder of it.
The role of Alitalia, currently facing
bankruptcy proceedings, was not clear, though it remains a part of the
joint venture with Delta and Air France-KLM. Fully combined, the new joint
venture, counting Alitalia, accounts for 300 daily nonstop transatlantic
flights, according to Delta.
The carriers have signed a memorandum of understanding for
the joint venture. Final shareholder, board and regulatory approvals are still
pending.
Air France-KLM also is deepening its commercial
relationship with China Eastern, which is acquiring a 10 percent stake in
Air-France-KLM. Delta acquired a 3.5 percent stake in China Eastern in 2015.