AF-KL Takes 31% Stake In VS, Expands Other Partnerships
Bruce Parkinson, Open Jaw
Air France-KLM has taken a 31% stake in Virgin Atlantic, Britain’s second-largest long-haul carrier, leaving founder Virgin Group with just a 20% slice of that airline.
AF-KL described the $323 million investment as a further major step in the strengthening of its strategic partnerships. The result will be the creation of a single global joint-venture between Air France-KLM, Delta Air Lines (Delta) and Virgin Atlantic.
In other related moves, Delta and China Eastern will each acquire a 10% stake in Air France-KLM by subscribing new shares through capital increases totalling $1.1 billion.
According to AF-KL, “the strategic, commercial and capitalistic reinforcement of these partnerships will position Air France-KLM as the European pillar of the leading global airline network.”
The airline group says the deal lays the foundations for a future combination of the existing joint-ventures between firstly Air France-KLM, Delta and Alitalia, and secondly between Delta and Virgin Atlantic, within a single joint-venture.
“The creation of this joint-venture will thus consolidate Air France-KLM’s leadership position in the North American and European markets with the largest airline network articulated around twelve powerful hubs on both sides of the Atlantic: Amsterdam, Atlanta, Boston, Cincinnati, Detroit, Los Angeles, London Heathrow, Minneapolis-St Paul, New York-JFK, Paris-CDG, Salt Lake City and Seattle,” the company said in a statement.
In parallel, AF-KL and MU will step up their commercial cooperation, which AF-KL says will secure and reinforce its presence in the Chinese market.
Bruce Parkinson Editor-in-Chief
An observer and analyst of the Canadian and international travel industries for over 25 years.