Air France-KLM has confirmed it will no longer go ahead with a plan to acquire a stake in Virgin Atlantic.
The European carrier issued a statement yesterday after Virgin Atlantic founder Sir Richard Branson revealed that he had decided to retain a majority 51% shareholding in the UK airline.
The disposal of 31% to Air France-KLM for £220 million had been put forward in a previous proposal.
However, the two carriers and US partner Delta Air Lines received clearance last month from the US Department of Transportation to go ahead with an extension of their transatlantic joint venture.
“This was the final regulatory step for the airlines to move forward with their alliance,” Air France-KLM said.
“In parallel, the partners finalised the expanded joint venture’s governance agreeing on simplified decision making processes that will enable the joint-venture to deliver its full synergy potential.
“Air France-KLM and Virgin have considered that Air France-KLM’s acquisition of a stake in Virgin Atlantic is no longer necessary and are negotiating an agreement whereby Air France-KLM will not acquire a stake in Virgin Atlantic, without any impact on Air France-KLM’s position in the commercial Delta-Virgin Atlantic-Air France-KLM joint venture.”
The carrier added: “Air France-KLM will pursue its ambitious investment plan to regain its leadership position and will continue final preparations towards the launch of the expanded trans-Atlantic joint venture in the coming weeks.
“This partnership is key to strengthen the group’s leadership position between Europe and North America and will offer its customers the best streamlined travel experience across the Atlantic.”