Air France-KLM will acquire a 31% stake in Virgin Atlantic in a deal with Sir Richard Branson’s Virgin Group.

Delta Air Lines and fellow SkyTeam alliance partner China Eastern Airlines will each take a 10% stake in Air France-KLM in a parallel deal.

Air France-KLM will pay £220 million for the stake in Virgin Atlantic, relegating the carrier’s founder and former owner Branson to a 20% stake.

Delta Air Lines retains 49% of Virgin Atlantic, a stake it acquired from Singapore Airlines in 2012, making it now the largest shareholder in the UK carrier.

However, Virgin Atlantic remains majority-owned by EU stakeholders in compliance with Brussels’ rules on ownership and control of airlines.

Announcing the deal yesterday, Sir Richard said: “Virgin Atlantic has made a big difference to people’s flying experience over the past 33 years and transformed the airline industry for the better.

“This is a fantastic opportunity to extend our network and create a stronger customer champion.”

In a letter to staff, he wrote: “Today is an exciting day for Virgin Atlantic and all of our team.”

Sir Richard, who established the airline in 1984, said it had been forced to endure a “consistently uneven playing field with British Airways keeping a stranglehold on Heathrow slots”.

He added: “Now we have Brexit which before it’s even happened has had a negative effect on the financial performance of both our holiday company and the airline, principally due to the collapse in the value of the pound.”

Virgin Atlantic chief executive Craig Kreeger added: “We built the Virgin Atlantic brand by providing customers with the choice they deserve and a travel experience they love.

“We couldn’t be more excited that the next stage of our growth will be at the heart of the strongest partnership for customers traveling between Europe and North America.”

Delta and China Eastern will acquire new shares in Air France-KLM conferring 10% stakes for each through capital increases totalling €751 million.

The deals are subject to regulatory approval, and to the approval of Air France-KLM shareholders.

Air France-KLM, Delta and Virgin Atlantic announced the signing of a memorandum of understanding to combine the existing transatlantic joint-ventures between Air France-KLM, Delta and Alitalia, and between Delta and Virgin Atlantic.

The French-Dutch carrier already has a joint-venture agreement with China Eastern and partner Delta holds a 3.2% stake the Chinese carrier.

Air France-KLM also has a joint-venture with China Southern.

The airline said it would have the same on the Virgin Atlantic board as Delta.

Jean-Marc Janaillac, Air France-KLM chairman and chief executive, described the deal as “unprecedented” and said: “This partnership gives Air France-KLM a leadership position in the worldwide airline industry.

“With Delta and Virgin Atlantic we are reinforcing our transatlantic alliance, making us the number-one alliance between Europe and the US.

“With China Eastern, we are consolidating our position in a high-growth market.”

The expanded joint venture, including Alitalia, will offer nearly 300 daily nonstop transatlantic flights

Delta chief executive Ed Bastian said: “A dynamic global landscape means it’s more important than ever for Delta to deepen ties with our global partners to provide opportunities for mutual growth.

“Bringing together the strengths of Delta, Air France-KLM and Virgin Atlantic into a combined joint venture will create the transatlantic partnership of choice for customers.”

The US carrier’s global sales executive vice president Steve Sear added: “During the past decade, Delta’s global partnerships have fueled significant international growth.

“As we further develop these partnerships, our ability to align network, sales and other commercial and operational initiatives will provide even greater benefits for our customers and employees.”

Delta holds a 49% stake in Aeromexico, a 9.5% interest in Brazil-based airline GOL and announced a joint venture with Korean Air Lines earlier this year.

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