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

I'm personally more surprised by the AF/KL purchase of 31% of VS.

http://news.delta.com/delta-deepenin...form=hootsuite

I saw this too and was similarly surprised.

I assume this is just DL divesting some of its 49% of VS to AF/KLM, and not that the combined DL/AF/KLM ownership of VS is more than 49%.

Also took note of AZ: "The expanded joint venture, including Alitalia, will offer nearly 300 daily nonstop trans-Atlantic flights and convenient flight schedules."

I believe it has far more to do with a combined joint venture than just that.

In addition, Delta did not sell any of its stake to AF-KLM.

To wit:
"China Eastern, a Delta partner, will also acquire 10% of Air France-KLM, while Air France will in turn buy a 31% stake in Virgin Atlantic from parent Virgin Group."

Let's hope that the combined JV makes for a much better transatlantic travel experience!

Above cited from Delta to Acquire 10% of Air France-KLM, Combine Separate Joint Ventures

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This link is to an online source to which I contribute and/or have a financial interest.

I can't remember when that TATL piece of the JV is over, I though something like 2021 but I could easily be off by several years, but AZ will almost certainly be out totally when it's up as they've already left the EU piece of their JV with AF/KL.

Although AZ is so messed up right now, virtually anything is in play with them...EY feeder slave, dissolved, back with AF/KL, and several others.

So I wonder then if VS is going to formally join SkyTeam. That would sure make lounge access a lot more straightforward.

Even if they don't, adding VS to the JV should lift the inability to purchase US-LHR-XXX on a single ticket. VS doesn't have a lot of Africa/Asia flights left, but more options are always good.

I miss the good ol' days when NWA/KLM were so tightly integrated they seemed to function as one.

Interesting. Hopefully, this works out better for the parties involved than EY's foray into equity tie-ups. Though, I would suggest that EY's error was investing in some deeply distressed companies and that the strategic fit was always questionable.

With Brexit won't this mean VS will be controlled by a non-UK entity? 49 plus 31 is 80 percent. No problem while UK is still in EU, but an issue once out.

I think that technically all of those things have to be negotiated between the EU and the UK. I'd imagine it's a much bigger issue for IAG with all of their many holdings.

If simple addition-math holds in these JVs with respect to power:

DL will get: 49% direct VS + 10% x 31% indirect VS = 52.1% VS.
Majority!

That's exactly the math I was just doing in my head when I saw the thread title :)

This definitely seems like DL now has, in some technically, a majority stake in VS. As has been stated in other threads, VS doesn't have much intl service, so it'd be interesting to see the effect of this, if any.

That is an interesting proposition, but if AF/KL take a 31% share, then obviously DL's 49% share gives them a plurality stake and wouldn't that technically give them the controlling interest even before factoring in the fractional ownership of a fractional ownership?

I honestly have no idea, but I can't imagine it can't be as simple as either of us are making it out to be.

DL will have 49% voting shares assuming that all shares have voting rights and AFKL will have 31% voting shares. DL does not, in theory, gain voting shares in VS because it owns 10% of the AFKL shares. It may be able to exert influence on how AFKL votes, but one cannot do the equation which you offered with any validity.

Just found this on Twitter from Richard Branson...2 key takeaways for me.

1) It seems that VS and AF/KL are seeking to be part of 1 big JV with DL instead of 2 separate ones...that could be interesting given the slots that AF/KL have a LHR.
2) seems to me that come Christmas RB gets to knee Willie Walsh in the balls...and RB intends to collect on that debt!

https://www.virgin.com/richard-brans...irgin-atlantic

Very interesting. Looks like DL/AF/KL/AZ/MU/VS alliance may an alliance within alliance. Sort of like LH Group airlines are treated differently then other StarAlliance airlines.