Virgin Group is to retain a 51 per cent controlling stake in Virgin Atlantic, under new plans announced by founder Sir Richard Branson.
The group had been set to sell a 31 per cent stake in the carrier to Air France KLM, under an agreement reached back in 2017.
This move has now been scrapped (subject to contract), with Delta retaining its 49 per cent share in Virgin Atlantic, and the Virgin Group keeping its controlling 51 per cent holding.
An extended joint venture partnership between Virgin, Delta and Air France KLM will however still go ahead.
In a letter sent to Virgin Atlantic and Virgin Holidays employees, Branson said:
“I have always viewed Virgin Atlantic as one of my children, born 35 years ago around the same time as Holly and Sam, with one second-hand 747 taking on established airlines such as British Airways, American Airlines, Pan AM, and TWA to name a few.
“Back in 2008, when BA tried effectively to merge with American Airlines, we fought the merger on behalf of our airline and our customers’ interests, with the ‘No Way BA/AA’ campaign on the side of our planes. Surviving against BA on its own was a struggle. But against the combined might of BA/AA, it would have been an impossibility.
“When competition authorities did somehow wave through the BA/AA partnership, we looked for a strong alliance of our own, to protect our wonderful ‘child’ for years to come. We needed to rely on sibling power!
“Remarkably, the most impressive of the large airlines, Delta, was there to form an alliance with us. And they have been the best partners we could have wished for.
That still left our family in our control and owning the airline.
“But with BA’s clout in Europe we needed further partners to provide feed for the Virgin Atlantic network, and discussions started with Air France-KLM. Agreement in principle was reached in May 2017.
“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.
“I’m delighted to say the tie-up was approved by various competition authorities, the last of these being the US Department of Transport, who gave antitrust immunity to the new joint venture on November 21st, 2019.
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 per cent of Virgin Atlantic shares we own. We’ll also continue to work extremely closely with our partners investing together in a thriving airline and holiday company.”