Virgin Atlantic targets second half of 2019 for expanded joint venture

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LONDON -- A transatlantic joint venture between Virgin Atlantic, Delta and Air France-KLM is expected to launch in the second half of 2019, and a step toward that goal will be done soon.

Negotiations for the equity sale between Air France-KLM and Virgin Atlantic will be completed "shortly", said Virgin Atlantic chief commercial officer Shai Weiss. Air France-KLM will purchase 31% of Virgin Atlantic for 220 million British pounds (currently equivalent to $305 million), a deal announced last summer.

Subsequently, the three airlines will apply to unify the existing Delta-Virgin Atlantic joint venture with the joint venture between Delta, Air France-KLM and Alitalia. The status of Alitalia in the consolidated joint venture effort is uncertain because it is going through insolvency proceedings.

"This is a regulatory process. It's not always that we control everything, but [the second half of 2019] is a fair expectancy," Weiss said during an interview last week.

Shai Weiss
Shai Weiss

Under joint ventures, carriers receive immunity from antitrust regulations, allowing them to jointly schedule, market and operate flights.

Delta and Virgin Atlantic currently operate 39 flights per day on 26 routes, Weiss said. With the addition of Air France, the joint venture would feature approximately 60 flights per day between the U.S. and Europe.

The deal would leave Richard Branson's Virgin Group with a minority share of Virgin Atlantic, which is already 49% owned by Delta. As such, the share acquisition is complicated by rules requiring an airline to be majority-owned by nationals of its base country.

That regulation is one reason why Air France and KLM maintain different identities, for example, and it's also why British Airways and Iberia formed the holding company IAG when they merged in 2011.

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