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#953310 by tontybear
01 Dec 2019, 14:13
The HFP article is based on a single newspaper article which, at the time of typing this, I can see no other mentions of this issue using google.

If this was somethign then I would have expected it to have been picked up in some of the other specialty travel press and blogs with other sources as well.

As to why perhaps this is SRB changing his mind or AF-KLM changing theirs - as Raffles wrote both AF-KLM have more pressing financial needs and maybe this is no longer has the same priority as a couple of years ago.
#953312 by LREDI
01 Dec 2019, 14:26
Clearly Virgin feel they may have sold it too cheap and or are more confident in the future returns from VS and the Connect venture. Shai Weiss has recently said VS is performing ahead of target and TCX and BE this year were unexpected. Lots has changed since the original JV and equity stakes were announced.

Given Brexit uncertainly I can’t see AF KLM saying no if Virgin want to keep it, or for them to take a smaller stake holding.
Last edited by LREDI on 01 Dec 2019, 14:30, edited 2 times in total.
#953313 by LREDI
01 Dec 2019, 14:29
gumshoe wrote:Plus VS has a new CEO who seems more interested in expanding operations than his predecessor who essentially wanted to turn it into Delta UK.


Bit unfair. Shai was CFO and CCO under Craig so was aware and linked to all decisions. One person doesn’t run an airline alone. Different strategic plan under Craig that was working until Brexit vote and £ volatility. Success of Velocity is still to be seen.
#953315 by wanderingmariner
01 Dec 2019, 21:11
If and this is a big if, this is true then all I can say is thank the lord. As I posted on the JV approval thread SRB giving up 31% and having no control anymore would have only lead to one thing and that was AF/KLM selling out to DL as they need cash to cover all the other issues they currently have.

We can only hope that this is the case and that VS remains a key player in the UK aviation market.
#953319 by Dobbo
02 Dec 2019, 10:16
Perhaps suggests sellers remorse (obviously!) on the part of the Virgin group and perhaps is indicative of brighter times on the horizon.

It may suggest that VS feel it can develop and grow its business without AF/KL (of course the JV would still help) and that can only be a positive sign...
#953321 by VS075
02 Dec 2019, 10:21
jakedonson wrote:
Interesting. Not something I saw coming I must admit.


True, but then again, I never saw the sale to Air France/KLM coming originally.


Same, though nor did I see it coming with Flybe until VS were first linked with buying them.

If true, I wonder how this will impact on the codeshare agreements VS have now entered to with Air France and KLM on each other's flights? I can't see that changing as airlines enter codeshare agreements all the time with one another and not necessarily get into bed with them with ownership stakes - VS have been doing that with other airlines for years - plus the codesharing has mutual benefits for all three airlines along with DL, particularly AF/KLM frequent fliers who are in FlyingBlue and can now fly direct to certain destinations from the UK instead of backtracking via CDG or AMS.

La Tribune is a French financial newspaper, so you would think this has some credibility compared to certain tabloid newspapers if they published something like this first. I personally think this story has some legs as their new CEO Ben Smith has overseen changes at AF/KLM since taking up the role last year, including shutting down the subsidiary airline Joon, expediting withdrawal plans of A380's from Air France's fleet and announcing plans to swap KLM's A350 order with Air France's 787 order as part of a fleet rationalisation strategy. Swinging the axe or making sensible decisions to cut losses? You decide!

All this of course depends if the deal has got beyond the point of no return. If it's cleared regulatory approval, it seems as though it's now a formality unless somebody pulls out at the last minute and all parties are in agreement. They would need to move quickly though.

As for SRB, there's always the risk that once he's sold something he may never get it back. He didn't want to sell Virgin Records in the first place for instance, so I wonder if that's playing on his mind a bit and has business rationale behind it this time besides emotion?
#953325 by tontybear
02 Dec 2019, 13:17
VS075 wrote:
All this of course depends if the deal has got beyond the point of no return. If it's cleared regulatory approval, it seems as though it's now a formality unless somebody pulls out at the last minute and all parties are in agreement. They would need to move quickly though.


It's important to remember that there are two deals

1. The Joint Venture which has now been approved by both the US anf EU.

2. The share sale to AF-KL Group. This was conditional on the JV getting approval but as it's not related to the JV it can go ahead or not go ahead without affecting the JV

If AF-KL do insist on the purchase - which apparently they have the right to do - they won't be able to sell their shares to DL due to the current ownership rules on EU based airlines which is a maximum of 49% foreign and this is also as far as I can tell UK law too.

It's not even money VS will get their hands on as AF-KL are buying the shares from the Virgin Group.

And if the share sale does go ahead the money will go the the Virgin Group C
#953328 by Hurricane86
02 Dec 2019, 21:02
Interesting. I think SRB definitely has a sentimental attachment to VS and wants to retain his controlling stake for that reason, however I absolutely think he would have given it up if he believed he had to in order to keep the airline afloat. That he now believes a sale is no longer necessary is hopefully an indicator of improved performance and good financial results to come. I am a big fan of the VS brand, and my hunch is that the airline's unique ethos and culture is more likely to endure as long as the Virgin Group retain 51%. So I think this is good news.
#953332 by slinky09
03 Dec 2019, 11:17
Even if this was a legally binding agreement at the time, I am pretty sure that it would have some review clauses to future proof it. Perhaps one such one was that the price would be reassessed at the actual time of the deal and now that doesn't suit one partner or the other ... in any case AF / KL (particularly AF) have a ton of their own problems to solve.

It does make me kinda happy though, if SRB still has the regard for the airline he once had he may have some positive impact.
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