It seems that Richard Branson’s Virgin Group will retain 51% control of Virgin Atlantic and in the process – abandon the sale of a portion of the airline to Air France-KLM group.
The proposed sale would have reduced the holding of Virgin Group down from 51% to 20% (with Delta Air Lines holding onto 49%).
This was revealed in a blog post by Richard Branson.
With the airline gaining its joint venture business agreement with Delta and Air France-KLM, it seems the sale is no longer required.
Richard Branson writes
But with BA’s clout in Europe we needed further partners to provide feed for the Virgin Atlantic network, and discussions started with Air France-KLM. Agreement in principle was reached in May 2017.
To get the deal done, we initially thought our family would need to reduce its shareholding in Virgin Atlantic. I was willing to do so, reluctantly, to guarantee the long-term success of Virgin Atlantic.
I’m delighted to say the tie-up was approved by various competition authorities, the last of these being the US Department of Transport, who gave antitrust immunity to the new joint venture on November 21st, 2019. Importantly following this news, we have agreed (subject to contract) with our new joint venture partners, that our family will continue to hold the 51 per cent of Virgin Atlantic shares we own. We’ll also continue to work extremely closely with our partners investing together in a thriving airline and holiday company.
This will benefit you all, the wonderful people of Virgin Atlantic and Virgin Holidays, and contribute to a winning partnership. The expanded joint venture with Delta and Air France-KLM remains an essential part of our future and long-term success.
Playing the longer game
As usual, we need to look at this through the looking glass of the longer game. Virgin Atlantic is swelling its operation, with the airline growing out Manchester, the partial acquisition of FlyBe/Connect Airways (Which in turn will turn into Virgin Connect).
Indeed, Virgin Atlantic wants to grow out of Heathrow with it wanting to push for a 3rd runway, the redistribution of slots and challenge British Airways dominance at Heathrow with its “Two Flag Carriers” campaign.
With Virgin Atlantic remaining under control of Virgin Group – and free from a third influence, the airline should be able to guide part of its destiny (even with Delta Air Lines influencing inter-working and Joint Business Ventures across the Atlantic)
It will be interesting to see what he does next and how they pressure Heathrow to allow the airline more slots.
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