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#936913 by CHill710
27 Jul 2017, 17:16
A reliable source is reporting that Air France - KLM have purchased a 31% share in Virgin Atlantic from Virgin Group leaving Virgin only 20% of the airline.
VS customers will soon be able to earn miles across a joint venture with Delta, AF, KLM and Alitalia (Sky Team?)

:-(
#936914 by mitchja
27 Jul 2017, 17:18
I've just received the following email from VS Trade:

Virgin Atlantic VSbulletin 005- Strengthening our Transatlantic Partnerships

We need to let you know that today, 27 July 2017, we have announced our intention to expand our strategic partnership with The Air France-KLM Group and Delta Air Lines to offer our customers access to the most comprehensive transatlantic route network via an extensive joint venture. The long-term joint venture would offer convenient flight schedules with competitive fares and reciprocal frequent flyer benefits, including the ability to earn and redeem miles across all carriers. The benefits would also include co-location of facilities at key airport hubs to improve connectivity times for customers, as well as access to each carrier’s airport lounges for premium customers.

The enhanced joint venture, including Alitalia, would become the airline partnership of choice for customers, offering more than 300 daily nonstop transatlantic flights and increasing competitive routings with offerings across key business markets including Amsterdam, Atlanta, Boston, Cincinnati, Detroit, Los Angeles, London Heathrow, Minneapolis-St Paul, New York-JFK, Paris-CDG, Salt Lake City and Seattle.


The enhanced joint venture would establish a combined partnership with a duration of at least 15 years. In order to support the success of that cooperation:

Air France-KLM will acquire a 31 percent stake in Virgin Atlantic currently held by Virgin Group for £220 million
Virgin Group will retain a 20 percent stake and Chairmanship
Delta will retain its 49 percent stake in Virgin Atlantic

All transactions are subject to execution of definitive agreements and receipt of final shareholder, board, and regulatory approvals. Virgin Atlantic would retain its independence as a UK airline with a UK operating certificate, and will continue to fly under the Virgin brand.

Jean-Marc Janaillac, CEO, Air France KLM, said: “With our partners Delta and Virgin Atlantic, we are pleased to reinforce our transatlantic partnership, offering our customers even more choice between Europe, UK and the United States via twelve hubs on both sides of the Atlantic.”

Sir Richard Branson, Virgin Group Founder, said: “Virgin Atlantic has made a big difference to people’s flying experience over the past 33 years and transformed the airline industry for the better. This is a fantastic opportunity to extend our network and create a stronger customer champion, as well as being extremely beneficial to our people and the Virgin Atlantic brand that our customers love dearly.”

Craig Kreeger, CEO, Virgin Atlantic, said: “We built the Virgin Atlantic brand by providing customers with the choice they deserve and a travel experience they love. We couldn’t be more excited that the next stage of our growth will be at the heart of the strongest partnership for customers traveling between Europe and North America. Together with our friends at Air France-KLM and Delta we will build on this vision of our teams creating irresistible experiences for customers flying on our network.”

Ed Bastian, Delta’s CEO, comments “By working even more closely with our great partners at Air France-KLM and Virgin Atlantic, together we will develop a path to increase competition across the Atlantic that will spur additional benefits for customers, employees and shareholders.”


A bit more info here as well on the AirFrance/KLM website.

VS joining SkyTeam looking very likely now.
#936917 by tontybear
27 Jul 2017, 17:34
Could be good for VS with access to the KL/AF European Network. Maybe even some scope for some ex-EU bargains!

300 daily TATL flights seems an awfully high number though even if 4 airlines are involved.
#936918 by jayden
27 Jul 2017, 17:54
LHRrules wrote:So it's now 80% owned by non UK companies. AF and KLM can't agree on much at the moment so we'll see how this plays out!


At least RB is retaining Chairmanship so hopefully the brand and culture will continue to live on in its current form!
#936919 by SlimpyJones
27 Jul 2017, 18:12
Hmmm.

I shall watch with great interest. My initial concern is the devaluation of the Virgin brand as more companies join the fold. But with that being said the same concerns were there with DL's buy-in and it hasn't deteriorated.

Interesting times.
#936921 by tontybear
27 Jul 2017, 18:23
quiver wrote:LHR lounge noticibly more crowded when Delta joined the party. Won't be able to move in there with AF & KLM passengers as well


AF and KL fly from T4 so it shouldn't be an issue.
#936922 by SlimpyJones
27 Jul 2017, 18:25
quiver wrote:LHR lounge noticibly more crowded when Delta joined the party. Won't be able to move in there with AF & KLM passengers as well


I wondered this too, but it's not as if AF or KL offer long haul business out of LHR, so it's not likely to have 100+ biz travellers and their guests all coming in. I imagine the Clubhouse will have been expanded with this new joint venture in mind.
We'll have to just wait and see.
#936932 by silverwings
27 Jul 2017, 20:27
So perhaps we will eventually see VS moving over to T4.

I guess this is a pretty clear indication the current VS strategy for DL wasn't providing enough results so they have called in their partners AFKL and funded them (by buying 10%) to therefore take a 31% stake in VS to pretty much exert majority control of VS. Will be interesting to see how it all works out. I know the VS culture under Kreeger has pretty much been gutted.. its been cut cut cut since he started and a lot of the culture and good will has gone.
#936934 by property1925
27 Jul 2017, 20:40
Got the same message. It's effectively a leveraged take over by Delta, who now control a majority shareholding via their stake in AF/KL.

It's all unknown but long term there is not much added value in keeping VS distinct. Same with FC, which I expect to be folded into sky miles
#936935 by starquake
27 Jul 2017, 20:45
If anything am optimistic this will give an improved route network east and ability to use VS miles for this.

Presume this means we will all be in same scheme as the other airlines miles wise in future - again no bad thing if the actual redemption "taxes" are lowered to the equivalent.

I too was reluctant about the DL piece a few years back, but having flying Delta One, I found it was an excellent service with many similarities to VS ... my sister flew AF and said similar about them a year or so back (she was a VS fan, but used AF to South Africa due to VS cutting back there).

Virgin is losing some of its uniqueness here, the worry will be slowness in decision making, positives could be better negotiating position for future aircraft deals, Delta, AF + KLM + VS = a massive player in the Airframe market and that alone could give complelling savings.

I do think we'll need to wait and see. Lets hope AF can bring some of their food to UC?
#936936 by SlimpyJones
27 Jul 2017, 20:53
starquake wrote:I do think we'll need to wait and see.


This.

So little is known already that it just isn't worth speculating over what will happen with things like the Clubhouse, reward redemptions, and all sorts.

In this day and age with LHR slots in such short supply the only way to extend your reach is to partner up. In VS's case, DL provide the feed on the US side, and AF/KL provide their feeds from AMS and CDG.
#936939 by gumshoe
27 Jul 2017, 21:24
property1925 wrote:It's all unknown but long term there is not much added value in keeping VS distinct.


I'm not so sure.

The Virgin brand is still very strong - just look at Virgin Trains East Coast. It's 90% owned by Stagecoach yet they've used the Virgin brand because they know how well it's perceived by consumers.

DL know that as well, and with airlines there's still a lot of national loyalty. The ME3 and LCCs have shaken things up to a certain extent in recent years, but by and large British passengers still prefer to fly with British airlines, US passengers prefer US airlines, etc etc.

So I think the VS brand will survive for now. Behind the scenes, though, clearly there'll be big changes and I too would expect them to join SkyTeam in due course, which could make being a VS FF much more beneficial.
#936941 by stuart_f
27 Jul 2017, 23:08
silverwings wrote:I guess this is a pretty clear indication the current VS strategy for DL wasn't providing enough results so they have called in their partners AFKL and funded them (by buying 10%) to therefore take a 31% stake in VS to pretty much exert majority control of VS.


Interesting view, I come to exactly the opposite opinion. The JV is, IMHO working very well. Delta want a bigger slice of the pie. They already own 49% of VS and are prohibited from owning more (directly). The solution to this is to have someone else own the stake in VS and Delta then own (a portion of) the third party.
#936942 by tontybear
28 Jul 2017, 02:32
silverwings wrote:So perhaps we will eventually see VS moving over to T4.



DL recently spent a small fortune moving from T4 to T3 to consolidate operations and not too long before that VS and HAL spent a shed load of money on refurbishing the VS check-in area of T3 so I don't see any move for a long time.

And remember DL moved fully to T3 in the last couple of years knowing full well it would make connections onto AF/KL far more inconvenient for their passengers. They even spend £££ on a DL arrivals lounge (since closed!)

The next major terminal shuffle at LHR is a good few years off and would rely on the rest of T2 redevelopment being completed to allow some of the smaller T4 airlines to move there so VS/DL could move back to T4 from T3. And given the large Skyteam lounge in T4 I could see the VS CH not making the move and ending being closed. And any airline forced to switch terminals could demand a hude amount of compensation from HAL to move and reprovide lounges etc.
#936943 by silverwings
28 Jul 2017, 06:20
stuart_f wrote:
silverwings wrote:I guess this is a pretty clear indication the current VS strategy for DL wasn't providing enough results so they have called in their partners AFKL and funded them (by buying 10%) to therefore take a 31% stake in VS to pretty much exert majority control of VS.


Interesting view, I come to exactly the opposite opinion. The JV is, IMHO working very well. Delta want a bigger slice of the pie. They already own 49% of VS and are prohibited from owning more (directly). The solution to this is to have someone else own the stake in VS and Delta then own (a portion of) the third party.


Im sure the JV is working well for VS.. to be honest they were on a down hill slope and it really saved their bacon. But given they are on track for a 60-90m GBP loss this year something is still not right in Crawley Towers.
#936945 by LHRrules
28 Jul 2017, 08:44
Long term Virgin managers are slowly being replaced by Delta placed execs in Crawley. It is very much a Delta led operation and this will increase I'm sure after yesterday's news.
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