Air France-KLM won’t be purchasing a 31% stake Virgin
Atlantic after all. Instead, Richard Branson's Virgin Group will continue to
hold a majority 51% share of the British carrier.
"I have always viewed Virgin Atlantic as one of my children,"
Branson wrote in a blog post in which he explained that the planned share sale
will be nixed.
Air France-KLM and Virgin Group initially agreed to the sale
in May 2017, when the airline companies plus Delta announced plans to form a
three-way joint venture. The U.S. Department of Transportation issued its final
approval of the joint venture on Nov. 21.
In the blog, Branson said Virgin Atlantic needs the
partnership with Air France-KLM in order to combat British Airways' clout in
Europe and to feed its transatlantic network.
"To get the deal done, we initially thought our family would
need to reduce its shareholding in Virgin Atlantic. I was willing to do so,
reluctantly, to guarantee the long-term success of Virgin Atlantic," he wrote.
But subsequent to the DOT's Nov. 21 approval, Virgin Atlantic
and Air France-KLM agreed to forego the investment stipulation. In a statement
Wednesday, Air France-KLM said that the two companies no longer consider the
stake to be a necessary component of the partnership.
The companies are now negotiating a new agreement that won't
have an impact on Air France-KLM’s position in the joint venture, the statement