Delta, Air France-KLM, and Virgin Atlantic have all signed agreements for a future joint venture, which has yet to be approved by regulators, that plans on expanding trans-Atlantic service, acquiring stakes in one another’s businesses, and arranging the venture operationally and commercially.
According to a release this week by Delta Air Lines, the company has just signed an agreement with Virgin Atlantic and Air France-KLM that will pave the way for an expanded trans-Atlantic joint venture. The agreement accomplishes several things, Delta outlined on its website:
- Sets out the governance as well as the commercial and operational terms of the expanded trans-Atlantic joint venture.
- Upon completion, Air France-KLM will acquire a 31 percent stake in Virgin Atlantic currently held by Virgin Group for £220 million.
- Upon completion, Virgin Group will retain a 20 percent stake and Chairmanship of Virgin Atlantic.
- Upon completion, Delta will retain its 49 percent stake.
The agreement, though signed by all airlines, still needs to get through the regulatory approval stage. The three airlines expect this will have a significant affect on customers. It will offer comprehensive route coverage, reciprocal frequent flyer benefits, more competitive fares, and more convenient flight schedules, the release says. Premium passenger access to airport lounges will also be improved, because key hub airports will combine facilities for each airline.
Air France-KLM and Delta already have the largest trans-Atlantic joint venture, and Virgin Atlantic and Delta have a leading one as well. This agreement will allow the three airlines to join forces for an even more efficient one.