The joint venture of Air France KLM, Delta Air Lines and Virgin Atlantic pose no threat to competition within the European Economic Area, authorities find.

The European Commission authorized on February 12, 2019, the project of a joint venture between Air France-KLM, Delta Air Lines and Virgin to control operations of Virgin Atlantic.

The Commission examined the potential impact on air transport of passengers; cargo air transport services and maintenance, repair and overhaul services (MRO). It ruled that combined time slots of companies at airports with overlapping portfolios would not prevent the entry of new competitors or the development of competitors' existing activities.

The investigation further concluded that the joint venture should not pose any competition concerns on the cargo market as Air France-KLM, Delta and Virgin Atlantic are not close competitors, and are facing a strong competition from other companies such as Cargolux and Lufthansa.

In the case of MRO services, the transaction would have a limited impact on this market.

The Commission concluded that the operation “would raise no competition concerns in any of the relevant markets and cleared the case unconditionally.”

Under this agreement, Air France KLM will hold a 31% stake in Virgin Atlantic by Air France-KLM from the Virgin Group. While Delta Air Lines will keep its 48% share, Virgin will only control 20% of Virgin Atlantic. The joint venture should represent 25% of the transatlantic market.

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Four mega airlines – Delta Air Lines, Air France-KLM, Virgin Atlantic and China Eastern are launching a joint venture.  For this purpose, Delta and China Eastern will acquire 10% equity of Air France-KLM, while the latter is set for a 31% investment in Virgin Atlantic.
 

Air France-KLM acquired the share for €250 million, according to the press release published at the time, on May 15, 2018.

To sign the final agreement on the joint venture between Air France-KLM, Delta Air Lines and
Virgin Atlantic
was the last official action of former Air France-KLM CEO Jean-Marc Janaillac before resigning.

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The board of directors of Air France-KLM has set up a temporary governance. Anne-Marie Couderc has been appointed as non-executive chairman of both Air France-KLM group and Air France boards. She will be supported by a management committee within the group: former Finance Director Frederic Gagey will act as CEO of the group, Franck Terner as CEO of Air France and Pieter Elbers as Chairman of the Board at KLM.