In the words of Bob Dylan- times, they are changing. The airline world, like a game of poker, is an ever shifting landscape, with brands acquiring stakes in each other to fend off competition and streamline plans for the future. Air France just acquired a major stake in Virgin Atlantic- which leaves us with one question: is this good for Virgin Atlantic customers? In a word, yes.
Here’s What Happened…
Richard Branson’s the Virgin Group just sold 31% of it’s 51% ownership stake in Virgin Atlantic. Air France bought the 31% stake for £220 million, or roughly $280 million. That leaves the Virgin Group, controlled by Richard Branson with a 20% stake in it’s namesake airline, and Delta, the first outside investor in Virgin Atlantic with a 49% stake. So yes, to recap 49% Delta, 31% Air France and 20% Virgin Group makes up the ownership of Virgin Atlantic. With Air France comes new possibilities…
There Will Be More Value For Virgin Atlantic Miles…
Air France has an extensive worldwide network, and an excellent loyalty program. The acquisition will mean that Virgin Atlantic customers will be able to use their Flying Club miles on Air France, and vice versa. Though full details aren’t immediately clear, it’s without doubt that this will open up more potential availability, new routes and perhaps some new sweet spots for maximizing your points.
Virgin Atlantic Frequent Flyers Will See Greater Loyalty Benefits…
Frequent flyers expect perks for their loyalty, the more the merrier. Much like the Virgin Atlantic- Delta partnership, Air France’ investment will signify further benefits on an increasing number of routes, especially throughout Europe. High level discussions are in process to decide whether Virgin Atlantic would join the SkyTeam alliance. If so, Virgin frequent flyers would have an impressive suite of benefits on more than 10 airlines, not just one, every time they fly, in any cabin.
A Joint Venture Across The Atlantic Is Likely…
British Airways, Iberia, Finnair And American Airlines already have a joint venture (revenue share) for their transatlantic traffic. This move is a huge step in securing a joint venture for Alitalia, Air France, Delta, KLM and Virgin Atlantic. Once again, this would create countless new routes and connectivity options for current Virgin Atlantic customers. One could say that this banding together decreases competition and is hurtful to low fares, since airlines have less outside traffic to fend off. Only time will tell.
And Branson Will Keep Being Branson…
Richard Branson knows how to create a brand, and if you happen to enjoy his brand of airline- you’ll be happy to learn that he’s staying on as Chairman of Virgin Atlantic. Without a majority ownership share, it’s hard to speculate as to how much control he will forgo, but he will remain in place as the man in charge.
Delta’s 49% interest in Virgin was acquired from Singapore Airlines. Delta was not Virgin’s first outside investor. Singapore sold its shared to Delta to a notable loss.
As a Virgin Atlantic Flying Club member thanks for sharing your views on this news. Regards, Alastair Majury