Virgin Atlantic founder Sir Richard Branson has performed a U-turn and decided not to sell his majority stake in the airline to Air France-KLM.
He and his family will continue to own 51% of the carrier rather than dispose of a 31% stake to the European airline in a £220 million deal negotiated two years ago.
At the time, Virgin Atlantic and US 49% shareholder Delta Air Lines envisaged a three-way joint venture with Air France-KLM to provide stronger clout against the British Airways-American Airlines transatlantic joint venture.
Sir Richard launched and failed with a high profile ‘No Way BA/AA’ campaign against the deal in 2008, admitting that surviving alone against the combined might of British Airways and American Airlines “would have been an impossibility”.
He was forced to forge an alliance with Delta to combat the rivals and needed further partners in Air France-KLM to provide feed for the Virgin Atlantic network, with an agreement in principle reached in May 2017.
Sir Richard told staff in a blog post yesterday: “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.”
However, he said that he had agreed with Delta and Air France-KLM that he and his family would continue to hold the 51% of Virgin Atlantic, subject to contract, after the trio’s joint venture partnership gained approval last month from the US Department of Transportation.
“Just like in 2008, we’re at a point in time where we need to stand up for fair competition for the benefit of British customers and businesses,” Sir Richard added.
“So we’ll continue to be vocal throughout 2020 with our ‘Two Flag Carriers’ campaign, urging ministers to grasp the once in a generation opportunity to shake up the status quo at Heathrow. Because Britain deserves better.”
He said: “As we enter 2020, the 50th birthday year for the Virgin Group, there is more excitement ahead, with the launch of our first South American route to Sao Paulo.
“And as well as expanding our partnership with Delta, Air France and KLM, we’ll see more red planes flying around Britain, as Virgin Connect [Flybe] starts flying under the Virgin brand.”
Sir Richard described 2019 as a “fantastic year’ for his airline with new Airbus A350s joining the fleet, a refresh of the on board service, signing a deal for new A330neos to enter service in 2021, a new route to Tel Aviv, the return of Mumbai to the network and more capacity added from Manchester airport.