Virgin Group to give up majority hold on Virgin Atlantic in £220m deal

Sir Richard Branson’s Virgin Group is giving up its majority hold on Virgin Atlantic following a multi-million pound deal with Air France-KLM.

Subject to regulatory approval, the European carrier will acquire 31% of the Virgin airline for £220m, leaving parent company Virgin Group with a 20% stake in the business.

Delta Airlines, the US carrier, continues to own the other 49%.

The three airlines said the transaction will enable them to create a “comprehensive transatlantic route network” by allowing for tailored flight schedules between them, with passengers earning flyers’ benefits across the network.

Following the acquisition Virgin, which has a fleet of 53 aircraft, will retain its brand and remain a “UK airline with a UK operating certificate”.

Sir Richard said he will still be “very much involved” following the deal, stating in an open letter that the new joint-venture between Delta, Air France-KLM and Virgin will be “extremely beneficial” to the airline, its customers and brand.

Air France-KLM chief exec Jean-Marc Janaillac said the deal will give customers “even more choice between Europe, UK and the United States via 12 hubs on both sides of the Atlantic”.

Founded in 1984, Virgin Atlantic was among the earliest businesses in Richard Branson’s Virgin empire.

The firm’s profits were at a five-year high in 2016, but earlier this year Virgin Atlantic warned that the weaker pound was likely to push its books into the red again in 2017.

According to Sky News, Craig Kreeger, chief executive of Virgin Atlantic, commented: “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 travelling between Europe and North America.”

He added: “Together with our friends at Air France-KLM and Delta we will build on this vision of our teams creating irresistible experiences for customers flying on our network.”

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →