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DL to buy 10% of AFKL and AFKL to buy 31% of VS

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DL to buy 10% of AFKL and AFKL to buy 31% of VS

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Old Jul 27, 2017, 2:06 pm
  #31  
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Originally Posted by 3Cforme
They weren't thought to be stupid in Zurich, either, but there's a precedent for a really bad outcome holding non-controlling stakes of multiple carriers.

In the 1990s Swissair initiated the controversial “Hunter Strategy”, a major expansion programme devised by the consulting firm McKinsey & Co. Using this strategy, Swissair aimed to grow its market share through the acquisition of small airlines rather than entering into alliance agreements. Swissair decided to acquire 49.5 percent of the very successful Italian charter airline Air Europe, the unprofitable Belgian flag carrier, Sabena, and significant stakes in the carriers Air Liberté, AOM, Air Littoral, Volare, LOT, Turkish Airlines, South African Airways, Portugalia and LTU...

https://en.wikipedia.org/wiki/Swissair#Hunter_Strategy
To me what Swiss did is like getting married before even dating someone...could it work out, sure, but not likely. DL/AF/KL/VS have been dating for years, already have a house and kids, they're just making it official.
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Old Jul 27, 2017, 2:12 pm
  #32  
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Originally Posted by kop84
I just don't think it' worth it when there are already 2 established connection options that have lower taxes and are for the most part easier to connect through.
It may not be worth it, but it seems clear that is what RB is envisioning.

FYI... the taxes on a xxx-HUB-yyy itinerary are the same whether you connect in LHR, CDG or AMS.
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Old Jul 27, 2017, 2:21 pm
  #33  
 
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Originally Posted by flyerwma
I follow now. Other articles make clear that Branson is selling his interest. So post closing, it will be DL 49%, AFKL 31%, Branson 20%.

So DL has controlling majority, putting aside any ability to influence the AFKL 31%.
How do you figure? Delta's 10% stake in AF/KL wouldn't entitle Delta to control AF/KL's 31% voting rights in VS. Therefore, Virgin Group and AF/KL could outvote Delta with their collective 51% stake.
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Old Jul 27, 2017, 2:31 pm
  #34  
 
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This is clearly the latest step in Delta's proxy war with QR.
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Old Jul 27, 2017, 2:34 pm
  #35  
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Originally Posted by WWads
That makes me think that AF/KL might move to T3. Indeed, if VS does join SkyTeam, I could see some sort of terminal swap that moves all SkyTeam carriers to T3.
IMO not practical. There's no space. Remember AA flies put of T3 also, plus BA still has a few flights there. Even swapping them out, there'd not be enough room for all ST carriers. Until T3 is replaced I just don't see it happening. Plus most aren't going to want to double connect LHR and CDG/AMS anyway.
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Old Jul 27, 2017, 2:59 pm
  #36  
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Originally Posted by pbarnette
It may not be worth it, but it seems clear that is what RB is envisioning.

FYI... the taxes on a xxx-HUB-yyy itinerary are the same whether you connect in LHR, CDG or AMS.
I don't believe that is accurate.

MSP to CPT via CDG or AMS Same dates of travel had different tax breakdowns on DL.com

https://tinyurl.com/y7gpucod
https://tinyurl.com/yav95lkv
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Old Jul 27, 2017, 3:32 pm
  #37  
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Originally Posted by flyerwma
I follow now. Other articles make clear that Branson is selling his interest. So post closing, it will be DL 49%, AFKL 31%, Branson 20%.

So DL has controlling majority, putting aside any ability to influence the AFKL 31%.
Virgin Group retains the chairmanship of the Virgin Atlantic board. Meanwhile, Delta gets a seat on the Air France board.

Sir Richard's statement seemed to indicate that Virgin wanted more traffic from LHR to continental Europe and vice versa. That's interesting, if I'm right, because Virgin doesn't presently fly within Europe.

It also raises interesting questions about TATL long-haul flights. A couple years ago, it seemed like Delta really wanted us to fly Virgin (especially for award tickets) over Delta to London. I'm guessing that Virgin's operating costs are lower than Delta. Plus, is Virgin unionized like Air France? Air France always has strikes. I've never heard of a Virgin strike.

Regardless of Brexit (the UK isn't in Schengen now), I don't see why someone would fly from Europe to LHR on KLM/AF and then LHR to the US.
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Old Jul 27, 2017, 3:41 pm
  #38  
 
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Originally Posted by pbarnette
It may not be worth it, but it seems clear that is what RB is envisioning.
I would love to be able to take the VS daytime flight and connect onward when my destination is further into Europe, but I think the likelihood of this is O(0), regardless of what RB is envisioning. As mentioned upthread, LHR just doesn't have the slots, gates, or runway capacity, and VS doesn't have the equipment or staffing, to offer anything near the schedule that BA offers through LHR, or that AF and KL already offer through CDG or AMS. And while millions may already connect in LHR, the experience is inferior to both AMS and CDG (at least when passport control isn't backed up).

I suppose we could discuss long term hypotheticals around the third runway and terminal reconstruction, but otherwise TBH I don't really get the value add for AF or KL here, other than getting to be part of the DL/VS JV party. VS doesn't really add much to their network, other than less convenient routings to destinations that they mostly already serve.

(On a side note, I'd be happy with a daytime flight to Paris that connects to the last EU bank (and maybe even the Asian bank), but I get that's not really the point here...)
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Old Jul 27, 2017, 4:05 pm
  #39  
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Originally Posted by bennos
And while millions may already connect in LHR, the experience is inferior to both AMS and CDG (at least when passport control isn't backed up).
Personally, I think the miseries of LHR are overstated. At a minimum, the food options at LHR are superior to AMS and CDG. So are the lounge options. With status or a premium cabin, I think LHR connections can be preferable in many ways.

As for the connections from daylight flights... The times typically don't work. I think it is only possible to connect to a couple of European destinations from BA's daylight flights and I don't see why it would be different for VS.
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Old Jul 27, 2017, 5:07 pm
  #40  
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For me, this is probably wonderful news, because I am a big fan of VS PE from JFK/IAD to LHR. Right now, the JV PE fares from US/Canada to Europe don't include VS, so even if I want to take the extra stop to hop LHR-CDG/ORY, or LHR-23 hour stopover-LCY-AMS, I can't use VS metal even on a DL ticket.

For business travelers, I don't think this makes much difference unless AF/DL gives VS an infusion to start flying short haul from MAN or something.
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Old Jul 27, 2017, 6:10 pm
  #41  
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From a business perspective this makes total sense. I always wondered why no one had tried something like this (though I think this global partnership is what QR had in mind with AA given the tie-up with IAG).

The only thing missing is someone with a big Australia presence though perhaps we'll see VA come into this down the line
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Old Jul 27, 2017, 6:45 pm
  #42  
 
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Originally Posted by pbarnette
Personally, I think the miseries of LHR are overstated. At a minimum, the food options at LHR are superior to AMS and CDG. So are the lounge options. With status or a premium cabin, I think LHR connections can be preferable in many ways.
I wouldn't describe LHR connections as miserable, just less desirable. There's no security recheck at all for AMS (for US or EU originating flights), no buses or trains between terminal, and outbound US passengers can use passport kiosks. CDG immigration is a mess, but at least there's no security recheck for EU originating flights. Certain connections (mostly those not involving 2G) are downright easy. Maybe I'll like LHR more once they rebuild T3, but I'm not all that impressed with T2 or T5, especially the whole "stay in the shopping mall until we post your gate 2 minutes before boarding" approach.

VS Clubhouse is still a nicer lounge than AF or KL, but it has basically become a glorified restaurant with the latest renovations.

Originally Posted by ElmhurstNick
For me, this is probably wonderful news, because I am a big fan of VS PE from JFK/IAD to LHR. Right now, the JV PE fares from US/Canada to Europe don't include VS, so even if I want to take the extra stop to hop LHR-CDG/ORY, or LHR-23 hour stopover-LCY-AMS, I can't use VS metal even on a DL ticket.
When AF offered EU W fares you could create a through booking using DL codes, but alas that doesn't work anymore.

Originally Posted by Duke787
From a business perspective this makes total sense.
How? I still don't understand what VS brings to AF and KL.
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Old Jul 27, 2017, 6:55 pm
  #43  
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Originally Posted by bennos
How? I still don't understand what VS brings to AF and KL.
Probably lower labor costs on long-haul flights.
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Old Jul 27, 2017, 7:25 pm
  #44  
 
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Air France losing their shares while buying other's shares.

Sounds like AF is hedging their bets and can't hack it on their own. Not surprising to me since I think they suck as an airline.
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Old Jul 27, 2017, 7:44 pm
  #45  
 
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Originally Posted by james318
I miss the good ol' days when NWA/KLM were so tightly integrated they seemed to function as one.
Yes, those were the days. Long gone, unfortunately.
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