Air France-KLM, Delta and Virgin Atlantic have received tentative approval from the US Department of Transportation to combine the two transatlantic joint-ventures between Delta and Air France-KLM and Delta and Virgin Atlantic into one.
There had been strong objections from JetBlue which is seeking access to London Heathrow and a number of other European airports.
The Department of Transportation largely dismissed these concerns, but acknowledged concerns about the joint-venture’s presence at Amsterdam Schipol airport.
The Department of Transportation proposes that the airlines report annually on the progress of their co-operation and provide a detailed self-assessment after five years.
The next stage is for interested parties to make submissions to the US Department of Transportation before it issues a final decision.
Regulatory approval has been a long time coming. At present, Air France-KLM and Virgin Atlantic only have a limited codesharing agreement. Once regulatory approval is granted, the two airlines will pursue much greater co-operation.
This is likely to involve co-ordination of schedules and routes, co-location at airports (including possibly London Heathrow) and full reciprocal frequent flyer recognition.
Air France-KLM and Virgin Atlantic may also pursue greater co-operation on flights outside North America where clearly Air France-KLM has a significantly greater presence:
When the combined joint-venture is implemented Sir Richard Branson’s Virgin Group will also cede control of Virgin Atlantic by selling a 31% stake to Air France-KLM – a largely symbolic, but still historically significant move. This has already been approved by the European Commission and it will leave Delta as the single largest shareholder in Virgin Atlantic with a 49% stake.