“Virgin Group wants to retain control of Virgin Atlantic and not sell 31% to Air France KLM”

Our lead story last Monday was about the successful conclusion of the transatlantic joint-venture between Virgin Atlantic, Delta Air Lines and Air France KLM.  The US had finally given its approval to the venture (EU approval had already been obtained) and everything is now primed to go ahead.

As part of this arrangement, although not a legal condition for the JV to happen, Virgin Group was to give up control of Virgin Atlantic.  The current shareholding structure is 51% Virgin Group and 49% Delta Air Lines.

The reshuffle would see Air France – KLM taking a 31% stake.  Delta would retain its 49% stake, the maximum it is allowed under the EU foreign ownership rules.  Virgin Group would have dropped to 20%.

And yet ….

On Friday, a surprising story appeared in La Tribune.  You can read it here.

It is a bit complex and of course I am reliant on a translation.  However, this is what I believe it is saying:

Virgin Group no longer wants to sell shares to Air France – KLM and wants to retain control of the airline

Air France – KLM has the legal right to force Virgin Group to sell the agreed 31%

However, Air France – KLM is not flush with cash.  It would not get anything tangible for its €258m investment in Virgin Atlantic, given that the airline is not paying dividends to shareholders.

Air France – KLM is not in the habit of investing in other companies and has not done anything similar for over a decade

Air France – KLM shareholders believe that there are better things to do with the money, such as investing in new aircraft

The Air France – KLM CEO, Ben Smith, joined in August 2018 and was not involved in the original investment decision (he joined from Air Canada)

Air France – KLM believes that all of the economic benefits of the tie-up with Virgin Atlantic come from the transatlantic joint venture, which is going ahead regardless of the equity investment

Delta Air Lines is happy for Virgin Group to retain its 51% stake, despite spending many years persuading Air France – KLM to invest in the airline

I can see the sense in this for all parties.

I always thought that Virgin Group was selling its shares too cheaply. 

€258m for 31% of Virgin Atlantic wasn’t a lot, despite the debt in the business.  Virgin Atlantic is due to return to profitability next year, is in the middle of receiving a new fleet of A350 aircraft and has just ordered new A330 planes.

The collapse of Thomas Cook should mean that the Manchester operation sees a sharp increase in profitability, and the new facilities and Clubhouse opening in 2020 should improve premium traffic further.

Longer term, Virgin’s campaign to ensure that British Airways does not automatically receive the majority of the new Heathrow slots created by the 3rd runway (which BA would simply use to move routes from Gatwick) is picking up traction.  If Virgin Atlantic was to get 20%+ of the new slots it would be transformational.

This is, of course, just one newspaper report – although La Tribune is a respected source.  Let’s see what happens.

PS. La Tribune also states that the transatlantic joint venture will launch in January.  This would logically mean that we see Air France KLM ‘earn and burn’ via Flying Club from the same date.

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How to earn Virgin Points from UK credit cards (April 2025)

As a reminder, there are various ways of earning Virgin Points from UK credit cards.  Many cards also have generous sign-up bonuses.

You can choose from two official Virgin Atlantic credit cards (apply here, the Reward+ card has a bonus of 18,000 Virgin Points and the free card has a bonus of 3,000 Virgin Points):

Virgin Atlantic Reward+ Mastercard

18,000 bonus points and 1.5 points for every £1 you spend Read our full review

Virgin Atlantic Reward Mastercard

3,000 bonus points, no fee and 1 point for every £1 you spend Read our full review

You can also earn Virgin Points from various American Express cards – and these have sign-up bonuses too.

American Express Preferred Rewards Gold is FREE for a year and comes with 20,000 Membership Rewards points, which convert into 20,000 Virgin Points.

SPECIAL OFFER: Until 27th May 2025, the sign-up bonus on the ‘free for a year’ American Express Preferred Rewards Gold card is increased from 20,000 Membership Rewards points to 30,000 points. Points convert 1:1 into Avios (30,000 Avios!) and many other programmes. Some people may see even higher personalised offers. Click here to apply.

American Express Preferred Rewards Gold

Your best beginner’s card – 30,000 points, FREE for a year & four airport lounge passes Read our full review

The Platinum Card from American Express comes with 50,000 Membership Rewards points, which convert into 50,000 Virgin Points.

SPECIAL OFFER: Until 27th May 2025, the sign-up bonus on American Express Platinum is increased from 50,000 Membership Rewards points to a huge 80,000 points. Points convert 1:1 into Avios (80,000 Avios!) and many other programmes. Some people may see even higher personalised offers. Click here to apply.

The Platinum Card from American Express

80,000 bonus points and great travel benefits – for a large fee Read our full review

Small business owners should consider the two American Express Business cards. Points convert at 1:1 into Virgin Points.

American Express Business Platinum

50,000 points when you sign-up and an annual £200 Amex Travel credit Read our full review

American Express Business Gold

20,000 points sign-up bonus and FREE for a year Read our full review

Click here to read our detailed summary of all UK credit cards which earn Virgin Points.