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Air France-KLM purchase of 31% of Virgin Atlantic a No Go, what’s next?

Richard Branson does a 180 and retains a majority stake in Virgin Atlantic

Virgin Group has decided to retain majority control of Virgin Atlantic (51%) and has called off the planned purchase of 31% by Air France.

Why the Sudden Change of Heart?

For Mr. Branson getting the joint venture by the U.S. Department of Transportation was enough for him to made the determination that the sale was no longer required.

This will certainly throw off the plans already drawn up by Delta Airlines as Richard communicated in a letter to Virgin employees,

“I have always viewed Virgin Atlantic as one of my children.”

Virgin Atlantic, air france virgin purchase, Richard Branson
Virgin Atlantic cabin. Photo: Virgin Atlantic.

Branson was willing to reduce his stake in Virgin Atlantic to guarantee its Survival

Branson was ready to give up his majority stake if it meant the survival of his airline. However, the U.S. Department of Transportation saw the antitrust immunity trans-Atlantic tie-up with good eyes.

He said,

“Importantly following this news, we have agreed (subject to contract) with our new joint venture partners that our family will continue to hold the 51 percent of Virgin Atlantic shares we own.”

Branson already agreed to cede control, however as circumstances do change situations do also change. Now the aviation disruptor is seeking a contract with its new partners to continue to be at the helm of Virgin Atlantic.

Now the ball is in Delta’s court

It is up to Delta whether to agree to the new conditions or to reject it. Air France-KLM won’t move without Delta’s consent, and just recently, Delta acquired the antitrust immunity joint venture status for trans-Atlantic flights, so don’t think that Delta will become this foolhardy and tried to cede control from the maverick Mr. Branson.

I think Delta has become the financier just like Singapore Airlines did once upon a time, and not only that, at some point even they became a silent partner.

Richard Branson already has a longer-term strategy in place

The background of Virgin Atlantic and an interview with the brilliant Richard Branson, Video: YouTube.

With Mr. Branson at the helm of Virgin Atlantic, I believe that the leadership wants to grow its airline brand out of Manchester and to continue the dominance they have helped create by being British Airways underdog. With the partial acquisition of Flybe, which will turn into Virgin Connect, it will continue its dominance through the two flag carriers’ combined campaign.

I’m still waiting on an email response from the Flybe communications team on an investigative report I wrote, which they asked me to retract. My offer is still open to them.

By having the Virgin group at the helm of Virgin Atlantic and free from any influence, think you should be able to guide itself to the destiny they want to pursue. Delta will simply have to stick in for the ride, which I believe it won’t be so bad after all.

Closing Remarks

Mr. Branson could not have placed this any better at the end “This will benefit you all, the wonderful people of Virgin Atlantic and Virgin Holidays, and contribute to a winning partnership. The expanded joint venture with Delta and Air France-KLM remains an essential part of our future and long-term success.”

I am so proud of you all, both the Virgin Atlantic and Virgin Holidays teams, and find it incredible that after 35 years, you all keep delighting and surprising our guests. Thank you all.

Onwards and upwards.

Here’s to an amazing red future.

Having Richard Branson at the helm will guarantee airline disruption in Continental Europe for years to come. I also believe that if you put your mind to it, there are no obstacles in his way to get his objectives done. I am personally glad that Mr. Branson will still retain most of his airline operations because, as he says, Britain deserves better.

Do you have any comments on the Air France-KLM planned purchase of 31% of Virgin Atlantic being called off? Please send your comments to journalist Alex Martinez Rivera here.

Featured Image: Virgin.

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