Air-France KLM, Delta & Virgin Atlantic Transatlantic Joint-Venture Approval

Air France-KLM, Delta & Virgin Atlantic’s combined transatlantic joint-venture has received tentative approval from the US Department of Transportation.

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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 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:

Air France Long-Haul Network
Air France Long-Haul Network (Image Credit: Air France-KLM)
KLM Long-Haul Network
KLM Long-Haul Network (Image Credit: Air France-KLM)

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.

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