We’ve seen a lot of strategic airline investments lately, some of which make sense, and some of which are confusing. Here’s the latest such investment, which is even more complicated than usual.
Continue reading: Whoa: Delta Is Buying 10% Air France Stake, Air France Is Buying 31% Virgin Atlantic Stake
Share your questions, experiences, and thoughts below.
I don't disagree that this joint venture will reduce competition in some locations, but I doubt that it can be any more anti-competitive than the BA/AA joint venture has been at London. In fact while this JV may reduce competition in some locations, it may well enhance competition in London.
@ Another Steve -- There's no denying that the AA/BA JV has limited competition a lot in London, but this would have the same effect in Europe on a much larger scale. I'm also not sure how it would enhance competition in London. I doubt we'll see more service to London, but rather since there's fixed pricing, AF, KL, and AZ may very well raise their pricing out of London to match VS' pricing. Typically airlines have better pricing from their non-hubs, so while right now you can typically snag a deal on AF out of London, I'm not sure that would be the case as much after this.
Lucky do you think that Delta is planning to slowly integrate Virgin Atlantic into Sky Team? I have Virgin elite status and might consider renewing it if you see it as part of the alliance.
@ Lucky. I think you are quite correct. One of my hidden secrets for years was using AF via CDG when traveling LHR-IAD. The business class pricing, even one way, was often a bargain. I have a sense that this will go away and AF will no longer be interested in poaching LHR traffic to the U.S. and will be fine to see flyers paying a premium on VS or Delta and taking their cut.
Jeez. A oneworld JV, and now a SkyTeam JV.. how long until Lufthansa Group and UA integrate to make a JV of their own? What would it take for anyone from both sides of the Atlantic to slap these airlines with antitrust? With reduced competitions and higher fares, I think Norwegian Air should look into buying larger planes..
I'm a big Delta but Delta et al ain't doing this for any kind of customer enhancement. This benefits stockholders and stockholders only.
I assume their plea to the regulators will involve some sort of laughable and embarrassing "seamless global experience" with "enhanced scheduling ability..." blah blah blah.
Make no mistake, this is a bad deal for Skyteam flyers.
Great, VS redemption on AF should soon be possible.
Hopefully VS status will allow you to redeem 1st class on AF (using FB points).
Note that China Eastern is also buying 10% of AF/KLM Group. After the 220m investment in Virgin Atlantic, AF/KLM will have a lot of cash left over to deploy in new planes... or an investment in another European airline, like Alitalia....
Delta's market cap is $36B. Air France/KLM is $3.6B. I guess it says who wears the pants on this partnership.
Lucky, Ive got a kit of respect and admiratie for your Posts, but please stay true to news and facts; Not Air France is buying or being bought; It's Air France-KLM ( or the shorter AF-KLM). The mother merger company with entities like Air France, KLM, Transavia, Hop!, Joon, Martinair etc. You do refer to ISG when talking of Level for example, instead of 'Iberia founds Level'. You refer to AF-KLM as Air France in Flying Blue post as well.. it's just factual incorrect.
@Raul. Lufthansa, United, and Air Canada have actually had a JV for their transatlantic flights for a number of years now.
my maths say that Virgin is worth only 710 million pounds, how much did Delta pay for their 49%, or is it ? a percentage of Delta,s share? something is amiss,? let me know,
The condition of Alitalia apparently played a role in AF/KLM looking to tie up with Virgin Atlantic....
https://www.nytimes.com/reuters/2017/07/27/business/27reuters-air-france-klm-alliance-alitalia.html
I,m a diamond member, with Delta, I have tried to use my WW (Global)upgrades with virgin, and they are never available? now with AF, or KLM, you can use them, ! great? but in higher fare, in coach usually, which is more, than cheap business class, good if you want a flex fare, but otherwise , no good, try to use these on Delta , HNL, to ATL, always full up. Great they give you something thats hard to use, any info anyone?
VS is practically a shell entity for DL in the UK. The ownership of VS is simple... 49% owned by DL, 31% owned by AF/KLM and 19% by investors in the UK. You go back one step further and then realize that 10% of AF/KLM is owned by DL. By proxy, DL owns an additional 3.1% of VS through AF/KLM. It brings DL's ownership to 52.1% and thus the writing on the wall for DL's NRT de-hubbing will come true as focus shifts to LHR.
yes min of delta owning 52.1 % plus no doubt, holdings in others that have share of Virgin,, plus of course now delta have a chunk of klm/af, it hopefully will make upgrades easier, as Virgin, do tend to give out upgrades easy to their FF, or look after them better,.KLM/AF Platinum members get Economy Comfort, just extra leg room on Virgin?
Keep an eye... Econ Comfort/Comfort+ will be eventually eliminated in favor of a true PremiumEcon. Ed Bastion, DL CEO, just reaffirmed no reason to give upgrades away for free; hence, reaffirming the monikor of devaluating SkyPesos. The global upgrades for top tier FF is abysmal for TransPacific because of minimal competition. They are trying to reshape the herd to pay more for less services when their new planes have only main economy, premium economy and private suites. This way, DL captures and maximizes potential revenues.