Air France-KLM given green light to invest in Virgin Atlantic

Air France-KLM given green light to invest in Virgin Atlantic

BRUSSELS — The European Commission has given Air France-KLM, Delta Air Lines and Virgin Group the go-ahead to acquire joint control over Virgin Atlantic.

The Commission previously approved the acquisition of joint control of Virgin Atlantic by just Delta and Virgin Group in June 2013. Yesterday’s ruling approves the acquisition of joint control by Air France-KLM, Delta Air Lines Inc., and Virgin Group over Virgin Atlantic Limited by way of purchase of shares.

The deal, which has been approved under the EU Merger Regulation, was found by EU antitrust regulators as raising no competition concerns in the European Economic Area. It’s valued at approximately £220 million and includes a 31% stake to Air France-KLM (first announced in 2017), a 49% stake to Delta (first bought in 2012), and the remaining 20% of shares going to Richard Branson’s Virgin Group. Branson himself would become chairman of the airline.

The Commission’s investigation found that none of the overlapping routes raises competition concerns despite a small number of routes with high combined market shares because: 1) the overlapping routes are direct/indirect overlaps; b) Virgin Atlantic, Delta and Air France-KLM are not close competitors and continue to face competition from other carriers on the routes where the activities of both airlines overlap.