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Branson gives up control of Virgin Atlantic

August 1, 2017 Headline News No Comments Email Email

Britain’s flamboyant entrepreneur Richard Branson has given up control of his first great foray into aviation – Virgin Atlantic – selling almost a third of the carrier’s shares to Air France-KLM in a deal which has been portrayed as the start of a great transatlantic joint venture involving Virgin Atlantic, Air France-KLM and Delta Air Lines.

Branson launched into the Virgin Atlantic venture in the 1980s with money from his original record label and has described the airline as “truly a labour of love.”

In filings reported by Britain’s Financial Times, Air France-KLM will buy 31% of Virgin Atlantic from Branson. Branson sold 49% of the airline to US carrier Delta in 2012, a deal which gave the US carrier extra access to London Heathrow Airport, where landing slots are notoriously hard to obtain.http://www.granmonte.com/

Branson now holds just 20% of the carrier he put so much work into. Delta and China Eastern are each buying 10% of Air France KLM for EUR 751 million, creating even more links in the labyrinthine world of international airline ownership.

Branson, 67, said in an open letter that the Air France-KLM deal would let Virgin Atlantic “prosper and grow” in coming decades “as I get a little older.” Branson pointed out he would still be the largest individual shareholder in the airline.

He said he joint venture with Delta provided “a competitive alternative to BA and American Airlines’ alliance and it has created a strong platform for us to promote and support our brand in this highly competitive market”.

Virgin Atlantic has been for decades locked in a fierce struggle with its great rival, British Airways, which Branson considers has a “stranglehold” on slots at Heathrow.

Air Transport World says Air France-KLM see their Virgin Atlantic acquisition taking place in 2018, after regulatory approval. It will make Air France-KLM Virgin’s second largest shareholder after Delta. Delta also has a 3.2% stake in China Eastern.

Virgin Atlantic will remain UK-based with a British licence.

Written by Peter Needham

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