It was two years ago that Sir Richard Branson struck a deal to sell a 31% stake in the then vulnerable Virgin Atlantic to Air France-KLM for approximately 220 million pounds (US$284 million) as part of a three-way venture with Delta Air Lines as Delta Air Lines already held a 49% stake in the carrier. At the time, Branson opted to relinquish his majority stake in Virgin Atlantic to protect the long-term viability of the carrier. The three carriers also struck up a potential revenue and cost-sharing joint venture and this joint venture was cleared last month by the U.S. Department of Transportation.
However, in the two years since Virgin Atlantic struck its deal with Air France-KLM, Virgin Atlantic’s financial situation improved considerably. With the addition of the approval of this joint venture for transatlantic flights, the financial benefits to the carrier now no longer necessitate Branson selling off his controlling stake and he has consequently pulled the plug on the deal. Virgin recently acquired Flybe Group PLC which provides vital feeder traffic, and the carrier also committed to buying 14 A330-900neo jets at the Paris Air Show this year.
Commenting on the current situation with Delta Air Lines and Air France-KLM, Branson said: “We’ve had a fantastic 2019, with the new A350s joining the fleet, complete with a refresh of our famed onboard experience. We’ve continued to build a modern, fuel-efficient fleet, signing the deal at the Paris Airshow for the A330neos that will join our A350s from 2021. We’ve started flying to Tel Aviv, returned to Mumbai and added more and more seats out of Manchester airport. As we enter 2020, the 50th birthday year for the Virgin Group, there is more excitement ahead, with the launch of our first South American route to Sao Paulo. And as well as expanding our partnership with Delta, Air France and KLM, we’ll see more red planes flying around Britain, as Virgin Connect starts flying under the Virgin brand.”
