DL to buy 10% of AFKL and AFKL to buy 31% of VS
#1
Original Poster
Join Date: Apr 2011
Posts: 3,394
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
http://news.delta.com/delta-deepenin...form=hootsuite
#2
Join Date: Mar 2011
Posts: 645
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 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."
#3
Join Date: Jan 2010
Location: New York and Vienna
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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%.
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.
#4
Original Poster
Join Date: Apr 2011
Posts: 3,394
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.
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.
#5
Join Date: May 2015
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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.
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.
#7
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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.
#8
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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.
#9
Original Poster
Join Date: Apr 2011
Posts: 3,394
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.
#10
Suspended
Join Date: Jun 2017
Posts: 205
I'm personally more surprised by the AF/KL purchase of 31% of VS.
http://news.delta.com/delta-deepenin...form=hootsuite
http://news.delta.com/delta-deepenin...form=hootsuite
DL will get: 49% direct VS + 10% x 31% indirect VS = 52.1% VS.
Majority!
#11
Join Date: Sep 2016
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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.
#12
Original Poster
Join Date: Apr 2011
Posts: 3,394
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.
#13
Join Date: Dec 2000
Location: MA
Programs: DL DM/2MM Marriott Platinum, HH Diamond,
Posts: 8,906
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.
#14
Original Poster
Join Date: Apr 2011
Posts: 3,394
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
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