Aviation Industry

Blockbuster deal: Delta, Air France, KLM and Virgin Atlantic eye alliance


Delta Air Lines and partners Air France-KLM and Virgin Atlantic announced a bold business deal Thursday that the carriers hope will strengthen their position in the lucrative trans-Atlantic market.

Delta will buy a 10% stake in Air France-KLM for €375 million ($438 million), deepening an already entrenched partnership between the companies. Meanwhile, Air France-KLM is buying a 31% stake in Virgin Atlantic for £220 million ($287 million).

The airlines hope the move paves the way for a formidable joint-venture alliance between the four airlines. Delta already owns a 49% stake in Virgin Atlantic in a deal that closed in 2013, allowing those two carriers to launch a joint-venture of their own. The partnership lets Delta and Virgin Atlantic to coordinate flights and fares, helping them against rivals in the trans-Atlantic market.

But, until Thursday"™s announcement, Air France and KLM were not closely aligned with Virgin Atlantic. Air France and KLM merged in 2003 to become a single company (Air France-KLM), though each continues to operate under its own brand.

In selling part of his stake in the company, Virgin Group tycoon Richard Branson said the move would help the airline he founded in 1984 to better compete with British Airways and other rivals flying across the Atlantic.

"Delta has helped us considerably with feed from America, but because we don"™t have more slots at Heathrow or Gatwick we"™re unable to enjoy feed from Europe or provide extra onward journeys for those customers we are now carrying to London," Branson said in an open letter to Virgin Atlantic employees. "To address this we"™ve been in discussions with Delta"™s partners in Europe, Air France and KLM, to give us that network and connections”…

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Fuente: https://www.usatoday.com/story/travel/flights/todayinthesky/2017/07/27/blockbuster-deal-delta-air-france-klm-and-virgin-atlantic-eye-alliance/516809001/

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