Air France-KLM, Delta, & Virgin Atlantic’s Joint-Venture Plans

Air France-KLM, Delta and Virgin Atlantic have set out their plans to combine their respective transatlantic joint-ventures.

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KLM, Air France, Delta, Virgin Atlantic Tailfins (Image Credit: Delta Air Lines)
KLM, Air France, Delta, Virgin Atlantic Tailfins (Image Credit: Delta Air Lines)

Air France-KLM, Delta and Virgin Atlantic have this week sought regulatory approval from the Department of Transportation in the United States to combine their respective transatlantic joint-ventures.

The documents they have submitted as part of this process give a flavour of what we can expect when the combined joint-venture takes effect.

Delta and Virgin Atlantic have operated a joint-venture between the UK and USA since 2013 and wish to combine this with Delta’s joint-venture with Air France-KLM. Delta owns 49% of Virgin Atlantic. When the joint-venture completes, Air France KLM will acquire a stake in Virgin Atlantic from Virgin Group, making Delta the single largest shareholder.

Headline Changes

– The airlines have expressed a desire to co-locate at London Heathrow. Given Virgin Atlantic’s significant investment at Terminal 3, this would most likely mean Air France and KLM moving from Terminal 4 to 3.

– Virgin Atlantic will codeshare on Air France and KLM flights from UK airports to their respective hubs in Paris Charles de Gaulle and Amsterdam.

– Virgin Atlantic will also codeshare on Air France and KLM flights around the world, thus offering significantly more booking options to Virgin Atlantic passengers.

– Virgin Atlantic will retain its own frequent flyer programme, but with earning and redemption opportunities on Air France and KLM flights.

In practice, this is likely to be rolled out progressively and codeshares may only be available for certain routings, eg when connecting to/from certain destinations covered by the joint-venture.

Competing Against American Airlines and British Airways

A clear theme is a desire/need for Virgin Atlantic and Delta to be a stronger competitor against BA and Oneworld at London Heathrow and in the UK market, particularly for corporate customers and frequent flyers.

The combined joint-venture sees it itself as a much stronger competitor in UK regional airports such as Manchester and Glasgow where it can offer both direct flights to the US and connections via Amsterdam and Paris Charles de Gaulle.

Air France and KLM can also compensate for Virgin’s relatively weak non-US network where it can offer codeshares to a very large number of worldwide destinations. Indeed, Air France and KLM serve very many destinations in Africa and Asia that are not served by BA.

As Virgin Atlantic reported a loss in 2017, achieving higher margin corporate revenue and cost savings from merging back office functions will be critical to its future.

There is a degree of irony in this submission in that BA and KLM did once explore a merger. This was arguably one of the greatest missed opportunities in aviation. The plan for co-operation between Virgin and Air France-KLM was very much that could have been explored between BA and KLM. It will be interesting to see how American Airlines and BA respond, both at Heathrow and at UK regional airports.
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Virgin Atlantic adds Atlanta & Delta adds Los Angeles in Heathrow shuffle

Virgin Atlantic and Delta Air Lines have announced changes to their schedules between London Heathrow and Atlanta and Los Angeles as part of their transatlantic joint-venture.

London Air Travel » Virgin Atlantic » Virgin Atlantic & Delta Joint-Venture

Virgin Atlantic & Delta Air Lines Aircraft (Image Credit: Delta Air Lines)

We have to admit to being a little surprised by this news.

Virgin Atlantic and Delta, partners together in a relatively new transatlantic joint-venture, have announced that they will swap flights between London Heathrow and Los Angeles and Atlanta from 26 October 2014.

Delta will take over one of Virgin Atlantic’s twice daily London Heathrow – Los Angeles flights. Virgin Atlantic will take over one of Delta’s thrice daily London Heathrow – Atlanta flights.

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Virgin Atlantic & Delta to operate New York “shuttle”

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Virgin Atlantic & Delta Air Lines Aircraft (Image Credit: Delta Air Lines)

Following the grant of anti-trust immunity by the US Department of Transportation, Virgin Atlantic and Delta have today confirmed they will co-ordinate their schedules to operate a nine times daily shuttle service on the London Heathrow – New York (Newark & JFK) route from 30 March 2014.

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Delta & Virgin Atlantic to start codesharing on transatlantic flights

London Air Travel » Virgin Atlantic » Virgin Atlantic & Delta Joint-Venture

Virgin Atlantic & Delta Air Lines Aircraft (Image Credit: Delta Air Lines)

Delta and Virgin Atlantic have announced the start of codeshares on each other’s transatlantic flights between the UK and North America for bookings made from 29 June 2013 for travel from 3 July 2013.

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US Department of Justice approves Delta’s investment in Virgin Atlantic

London Air Travel » Virgin Atlantic » Virgin Atlantic & Delta Joint-Venture

Virgin Atlantic & Delta Air Lines Aircraft (Image Credit: Delta Air Lines)

The US Department of Justice has today, 20 July 2013, issued a statement confirming that it intends to take no further action in respect of the proposed acquisition by Delta Air Lines of Singapore Airlines’ 49% stake in Virgin Atlantic and the proposed joint-venture between Delta Air Lines and Virgin Atlantic for routes between London Heathrow and North America.

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