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LAXintl
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Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 5:44 pm

U.K. billionaire Richard Branson is working to scrap the planned sale of a stake in Virgin Atlantic Airways Ltd. and will instead retain control of the airline he founded as it resumes a path for expansion, people with knowledge of the matter said.

Branson is closing in on an agreement to abandon a two-year-old plan to sell part of the airline to Air France-KLM Group, according to the people, who asked not to be named discussing private negotiations. He’ll now hang on to the 31% stake, keeping a 51% holding overall as Virgin Atlantic adds new routes and aircraft to end a period of relative stagnation.

Virgin Group declined to comment on the aborted stake sale. Air France-KLM, which agreed to purchase the stake for about 220 million pounds ($284 million) in 2017. A final agreement with Air France-KLM should be reached in the next few weeks, people familiar with the negotiations told Bloomberg.


Branson Nears Air France Deal to Keep Control of Virgin Atlantic
https://www.bloomberg.com/news/articles ... n-atlantic

=

Seem his nostalgia for VS won him over.
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Waterbomber2
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 5:53 pm

AF/KLM was probably acting as a middleman to give DL management control over VS.
With VS moving to control Flybe and seeing how it's getting established as a true BA competitor by DL, Branson probably wants to see more money.

That's going to be a head scratcher for DL.
I wonder if they're going to cancel their 10% stake purchase in AF-KLM, which timing wise was kind of a quid pro quo deal.

https://onemileatatime.com/delta-air-fr ... t-venture/
Last edited by Waterbomber2 on Mon Dec 02, 2019 5:56 pm, edited 1 time in total.
 
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enilria
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 5:56 pm

STEP1: Sell stake for more money to QR
STEP2: Buy popcorn
 
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enilria
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 6:04 pm

Waterbomber2 wrote:
AF/KLM was probably acting as a middleman to give DL management control over VS.
With VS moving to control Flybe and seeing how it's getting established as a true BA competitor by DL, Branson probably wants to see more money.

That's going to be a head scratcher for DL.
I wonder if they're going to cancel their 10% stake purchase in AF-KLM, which timing wise was kind of a quid pro quo deal.

https://onemileatatime.com/delta-air-fr ... t-venture/

In all seriousness, it’s quite a back-stabbing of Delta, but business is business. The potential new LHR slots change the value of VS significantly. He may just up the price, but either way Delta basically loses what was total control. Even though the deal hasn’t taken plane Branson had clearly been letting DL control the company.

If he really wants control he will change the management again to marginalize the Delta people that were brought in.
 
Waterbomber2
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 6:09 pm

enilria wrote:
STEP1: Sell stake for more money to QR
STEP2: Buy popcorn


Or IAG?
That would be DL's worst nightmare.

What are DL's options?
-Play nice, renegotiate and get it done.
-All-out-war, cancel all VS partnerships, kick them out of the TATL joint-venture, cut off feed in the U.S., purchase slots from AF/KLM or other airlines or take a bigger stake in AF/KLM and start a new UK airline, or take a stake in AZ and start a new UK airline with that via Open Skies. Buy B6 just to piss everyone off.


Yes, quite the move from Branson, DL management must be pissed about now.
 
flyby519
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 6:14 pm

Waterbomber2 wrote:
enilria wrote:
STEP1: Sell stake for more money to QR
STEP2: Buy popcorn


Or IAG?
That would be DL's worst nightmare.

What are DL's options?
-Play nice, renegotiate and get it done.
-All-out-war, cancel all VS partnerships, kick them out of the TATL joint-venture, cut off feed in the U.S., purchase slots from AF/KLM or other airlines or take a bigger stake in AF/KLM and start a new UK airline, or take a stake in AZ and start a new UK airline with that via Open Skies. Buy B6 just to piss everyone off.


Yes, quite the move from Branson, DL management must be pissed about now.


IAG?!? Regulators would have a field day with that one.
 
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usdcaguy
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 6:21 pm

I honestly don't see why it matters one way or another. With the JV, DL will retain a lot of influence over VS, even if they don't have total control. There's nothing stopping DL/AF/KL/VS from becoming one virtual carrier across the Atlantic now, regardless of ownership. VS would arguably not be in the shape it is today if it weren't for the DL JV, so it's likely there will be no material difference if Branson decides to retain control.
 
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GCT64
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 6:24 pm

My guess, trying to read between the lines, is that this really means: Now that DL has fixed VS, it's now worth more than it was and I don't want to sell my stake at the price agreed two years ago when VS was in a worse state.
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readytotaxi
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 6:32 pm

Curious, does the great bearded one really want all this bother in his later years? He has been low key lately and is probably in Necker Island for the winter. Perhaps he has found a new fondness for VA.
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Polot
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 6:46 pm

Waterbomber2 wrote:
enilria wrote:
STEP1: Sell stake for more money to QR
STEP2: Buy popcorn


Or IAG?
That would be DL's worst nightmare.

What are DL's options?
-Play nice, renegotiate and get it done.
-All-out-war, cancel all VS partnerships, kick them out of the TATL joint-venture, cut off feed in the U.S., purchase slots from AF/KLM or other airlines or take a bigger stake in AF/KLM and start a new UK airline, or take a stake in AZ and start a new UK airline with that via Open Skies. Buy B6 just to piss everyone off.


Yes, quite the move from Branson, DL management must be pissed about now.

Delta still owns 49% of VS. Going “all-out-war” over this is literally cutting off the nose to spite the face (and all your suggestions would just hurt DL more than VS, who would probably run to UA/Star in such a scenario).
Last edited by Polot on Mon Dec 02, 2019 6:53 pm, edited 1 time in total.
 
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cathay747
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 6:46 pm

usdcaguy wrote:
I honestly don't see why it matters one way or another. With the JV, DL will retain a lot of influence over VS, even if they don't have total control. There's nothing stopping DL/AF/KL/VS from becoming one virtual carrier across the Atlantic now, regardless of ownership. VS would arguably not be in the shape it is today if it weren't for the DL JV, so it's likely there will be no material difference if Branson decides to retain control.


I agree 100%. I think the whole thing about buying stakes in other airlines is blown out of proportion. So what if AF/KL don't wind up owning 31% or however much of VS...big deal. VS is still in the JV with them and DL which is what really counts in my mind.
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 7:06 pm

GCT64 wrote:
My guess, trying to read between the lines, is that this really means: Now that DL has fixed VS, it's now worth more than it was and I don't want to sell my stake at the price agreed two years ago when VS was in a worse state.

Agreed. Time for lawyers.

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Dieuwer
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 7:10 pm

More likely the shares will be worth less as there are less suitable candidates to sell the shares to:

1) AF/KL? Not after BREXIT no more. After BREXIT, AF/KL must be treated as a foreign entity which cannot hold more than 49% of the shares.
2) DL? They already own 49%. Not allowed to add more (even if they wished).
3) QR? Hahahahaha!!
 
jbs2886
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 7:13 pm

lightsaber wrote:
GCT64 wrote:
My guess, trying to read between the lines, is that this really means: Now that DL has fixed VS, it's now worth more than it was and I don't want to sell my stake at the price agreed two years ago when VS was in a worse state.

Agreed. Time for lawyers.

Lightsaber


Agree. Who knows how that contract was drafted though. Very possible DL/AF/KLM have protections, but so could Branson.
 
jfk777
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 7:15 pm

Why SRB would ever sell 31% of Virgin Atlantic for Two Hundred million pounds seems low ball to me ti Air France. He cashed out of Virgin when he sold the 49% to Singapore Airlines 20 years ago and when he sold his record company. He has been paid close to $2 billions dollars for his businesses. SRB should keep 51% of VA unless Delta, Air France/KLM or someone else writes a check for close to a billion dollars.
 
MesabaXJ
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 7:46 pm

I was reading an article that popped on Google that KL/AF can force a deal for them to purchase the 31% stake if they wish. The problem is KL/AF don't have a history of doing this. I say KL/AF buy 2% with DL owning 49% they have full control of the airline. :-)
 
MIflyer12
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 8:04 pm

jfk777 wrote:
Why SRB would ever sell 31% of Virgin Atlantic for Two Hundred million pounds seems low ball to me ti Air France. He cashed out of Virgin when he sold the 49% to Singapore Airlines 20 years ago and when he sold his record company. He has been paid close to $2 billions dollars for his businesses. SRB should keep 51% of VA unless Delta, Air France/KLM or someone else writes a check for close to a billion dollars.


You have a problem with valuation math. Delta bought 49% for $360 million. If GBP 220 million was the agreed price for the AFKL stake pending regulator approval, that's the price.

https://www.businesstraveller.com/busin ... -approved/
 
jbs2886
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 8:06 pm

jfk777 wrote:
Why SRB would ever sell 31% of Virgin Atlantic for Two Hundred million pounds seems low ball to me ti Air France. He cashed out of Virgin when he sold the 49% to Singapore Airlines 20 years ago and when he sold his record company. He has been paid close to $2 billions dollars for his businesses. SRB should keep 51% of VA unless Delta, Air France/KLM or someone else writes a check for close to a billion dollars.


Ahh yes, I'm sure you know much more about airline valuations than them.
 
JAMBOJET
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 8:15 pm

makes you wonder if UA/LH have been talking to SRB...
The UA/LH/AC JV would be such a more logical and stronger partner for VS than DL/AF/KL JV in LHR just in terms of total slots they’d be able to pool together there between all the carriers and having the AC routes to Canada out of LHR for London customers.
It could actually be a real competitor to AA/IAG In LHR vs now where it’s basically become a Delta pawn.
That said, I’m well aware this is highly unlikely. It’s hard to believe VS would get JV approval with Delta only to move out of it almost immediately.
 
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 9:17 pm

readytotaxi wrote:
Curious, does the great bearded one really want all this bother in his later years? He has been low key lately and is probably in Necker Island for the winter. Perhaps he has found a new fondness for VA.


Well he's just about to give up his Virgin Trains West Coast line franchise in the UK to First/Trenitalia, ending a years long association. So maybe he's not quite ready to give up the airline so readily ? :P
 
kavok
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 9:21 pm

Dieuwer wrote:
More likely the shares will be worth less as there are less suitable candidates to sell the shares to:

1) AF/KL? Not after BREXIT no more. After BREXIT, AF/KL must be treated as a foreign entity which cannot hold more than 49% of the shares.
2) DL? They already own 49%. Not allowed to add more (even if they wished).
3) QR? Hahahahaha!!


I kind of wondered about the Brexit aspect myself. Someone correct me if they know better, but is it that unreasonable to believe that post-Brexit that 51% of the airline must be owned by UK entities (for VS to remain a UK airline)?

And if so, cancelling the AF/KL sale accomplishes that. Otherwise AF/KL or DL (or some combination thereof) would have to sell off some/all of their shares once Brexit happens. If anything, this may ensure DL gets to keep all of their 49% share as opposed to DL having to share some of that 49% with AF/KL.
 
BNAMealer
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 10:23 pm

JAMBOJET wrote:
makes you wonder if UA/LH have been talking to SRB...
The UA/LH/AC JV would be such a more logical and stronger partner for VS than DL/AF/KL JV in LHR just in terms of total slots they’d be able to pool together there between all the carriers and having the AC routes to Canada out of LHR for London customers.
It could actually be a real competitor to AA/IAG In LHR vs now where it’s basically become a Delta pawn.
That said, I’m well aware this is highly unlikely. It’s hard to believe VS would get JV approval with Delta only to move out of it almost immediately.


As much as I’d love to see VS hook up with LH/UA/AC, no way DL lets that happen.

But VS hooking up with LH/UA/AC would give them access to major gateways like ORD, YYZ, YVR, IAH, DEN, etc. Much more lucrative than what DL can offer IMO.
 
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 10:59 pm

Polot wrote:
Waterbomber2 wrote:
enilria wrote:
STEP1: Sell stake for more money to QR
STEP2: Buy popcorn


Or IAG?
That would be DL's worst nightmare.

What are DL's options?
-Play nice, renegotiate and get it done.
-All-out-war, cancel all VS partnerships, kick them out of the TATL joint-venture, cut off feed in the U.S., purchase slots from AF/KLM or other airlines or take a bigger stake in AF/KLM and start a new UK airline, or take a stake in AZ and start a new UK airline with that via Open Skies. Buy B6 just to piss everyone off.


Yes, quite the move from Branson, DL management must be pissed about now.

Delta still owns 49% of VS. Going “all-out-war” over this is literally cutting off the nose to spite the face (and all your suggestions would just hurt DL more than VS, who would probably run to UA/Star in such a scenario).

and do what exactly? It's a damn wonder that the ALPA pilots Delta haven't pitched a fit already. That might not even go down at United or even the Star Alliance.
 
clrd4t8koff
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 11:20 pm

BNAMealer wrote:
As much as I’d love to see VS hook up with LH/UA/AC, no way DL lets that happen.

But VS hooking up with LH/UA/AC would give them access to major gateways like ORD, YYZ, YVR, IAH, DEN, etc. Much more lucrative than what DL can offer IMO.


You’ve got to be joking. With DL and VS right now they have access to the hottest thriving economic hubs in the US - JFK, BOS, SEA, LAX and ATL. The only one from your list that would be of interest is ORD and VS has tried and failed there a couple times, same as YYZ. What the hell would VS want with DEN or IAH that it doesn’t already have with DL @ ATL or could have with DL @ SLC or MSP??

As for Canada - AC owns CA-UK. Neither BA or VS are strong there and the population isn’t big enough for VS to grow with WS also doing int’l flying now.
 
winginit
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 11:52 pm

So much nonsense in this thread.

Between the FlyBe acquisition and the approval of the trilateral joint venture between DL/AFKL/VS, the stake is simply now worth more than it was previously. VS probably wanted more money, and AFKL, dealing with their own financial matters at present, wasn't willing to pony up. Not a slight to Delta, not the beginning of the end for the relationship.
 
JAMBOJET
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 11:54 pm

BNAMealer wrote:
JAMBOJET wrote:
makes you wonder if UA/LH have been talking to SRB...
The UA/LH/AC JV would be such a more logical and stronger partner for VS than DL/AF/KL JV in LHR just in terms of total slots they’d be able to pool together there between all the carriers and having the AC routes to Canada out of LHR for London customers.
It could actually be a real competitor to AA/IAG In LHR vs now where it’s basically become a Delta pawn.
That said, I’m well aware this is highly unlikely. It’s hard to believe VS would get JV approval with Delta only to move out of it almost immediately.


As much as I’d love to see VS hook up with LH/UA/AC, no way DL lets that happen.

But VS hooking up with LH/UA/AC would give them access to major gateways like ORD, YYZ, YVR, IAH, DEN, etc. Much more lucrative than what DL can offer IMO.

I agree that it’s highly unlikely. But I will say SRB just preserved his right to do that which also seems a bit strange. He still has 51% which preserves his right to take VS wherever he wants unless there’s some hidden language in the Delta 49% stake preventing a move to UA/LH/AC.
I’m simply mentioning that, if I were United, I’d definitely be asking Virgin to reconsider their asking price for true controlling interest. One thing seems clear, AF/KL isn’t offering enough money right now.
 
BNAMealer
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Re: Branson Changes Mind on Selling VS stake to AFKL

Mon Dec 02, 2019 11:55 pm

clrd4t8koff wrote:
BNAMealer wrote:
As much as I’d love to see VS hook up with LH/UA/AC, no way DL lets that happen.

But VS hooking up with LH/UA/AC would give them access to major gateways like ORD, YYZ, YVR, IAH, DEN, etc. Much more lucrative than what DL can offer IMO.


You’ve got to be joking. With DL and VS right now they have access to the hottest thriving economic hubs in the US - JFK, BOS, SEA, LAX and ATL. The only one from your list that would be of interest is ORD and VS has tried and failed there a couple times, same as YYZ. What the hell would VS want with DEN or IAH that it doesn’t already have with DL @ ATL or could have with DL @ SLC or MSP??

As for Canada - AC owns CA-UK. Neither BA or VS are strong there and the population isn’t big enough for VS to grow with WS also doing int’l flying now.


Huh?

VS partnering with LH/UA/AC would mean they'd have access to the connecting feeds of the massive UA/AC hubs in ORD and YYZ, thus, setting up the flights for success. VS failed in ORD because they were in third place behind AA/BA and UA, aligning with UA would put them #1.

UA has hubs in both EWR and LAX, so it is not like they'd be losing access there. And they'd strengthen their access to SFO, a more lucrative market than SEA. DEN would give VS a foothold in a growing business and massive tourist market that is far superior to SLC (they already stated they want to expand to DEN in their Heathrow expansion). Plus, VS finally gain access to the Texas via IAH, a massive lucrative market DL/SkyTeam has virtually ignored (which again, VS stated AUS was a target in their Heathrow expansion plans, so they'd simply be moving over to IAH).

All in all, much more benefits with UA/LH/AC than DL/KL/AF.
 
JAMBOJET
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Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 12:14 am

clrd4t8koff wrote:
BNAMealer wrote:
As much as I’d love to see VS hook up with LH/UA/AC, no way DL lets that happen.

But VS hooking up with LH/UA/AC would give them access to major gateways like ORD, YYZ, YVR, IAH, DEN, etc. Much more lucrative than what DL can offer IMO.


You’ve got to be joking. With DL and VS right now they have access to the hottest thriving economic hubs in the US - JFK, BOS, SEA, LAX and ATL. The only one from your list that would be of interest is ORD and VS has tried and failed there a couple times, same as YYZ. What the hell would VS want with DEN or IAH that it doesn’t already have with DL @ ATL or could have with DL @ SLC or MSP??

As for Canada - AC owns CA-UK. Neither BA or VS are strong there and the population isn’t big enough for VS to grow with WS also doing int’l flying now.


North American markets unique to Delta/WS: ATL, DTW, MSP, SEA, YYC, and SLC. Delta calls BOS a hub but isn’t actually significantly bigger than United but agree to disagree here. If Delta lost VS; you’d have to think they’d be forced to consolidate Heathrow slots they do own somewhere (I’d guess JfK would take priority over Boston but who knows) But this is only a fun theory anyway, Include BOS for all I care.

Unique to United/ac JV: DEN, ORD, IAD, IAH, SFO, YYZ, YUL, YVR
I guess anyone can differ on this, but UA hubs do seem more appealing to anyone looking at O&D markets to Heathrow much less connecting at high O&D markets that also have connecting feed like ORD.

Saying VS wouldn’t grow to Canada because AC is too big in the market is like saying VS would never fly to Atlanta because Delta is too big.

Before all the delta guys freak out. Calm down. It’s a forum. But you have to acknowledge that SRB just preserved his ability to make decisions completely independent of Delta. You’d have to imagine SOMEONE at UA/LH has said “we’d happily give you more cash to switch sides”. Why would they not? Scott Kirby has been out publicly saying he wants back into JFK. A Company that already flies jfk-LHR certainly would fit that mold.
And, after two years of negotiating a controlling interest at VS, the owner of VS just said “no thanks, I’ll keep controlling interest”.
 
TTailedTiger
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Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 12:19 am

Good. Giving Delta control of yet another airline is bad for competition.
 
Cointrin330
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Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 12:26 am

This is a strategic problem for Delta, which, without VS, is an also ran at LHR. It will be interesting to see this play out.
 
chrisp390
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Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 1:22 am

The key is the very high value flyers use AC and UA, the people using WS and DL are much less valuable. So in the interest of increasing the value of Virgin Atlantic, it would be in Branson’s interest to explore a relationship between AC and UA. Maybe it wouldn’t mean the DL relationship ends, but it could mean a balancing act between both.
 
sonicruiser
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Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 1:27 am

Looks like DL is getting a taste of its own medicine after the LATAM deal. Backstabbers can get backstabbed too.
 
Armodeen
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Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 1:29 am

A saner analysis than the notion that VS is suddenly stiffing DL with this move can be found here:
https://www.headforpoints.com/2019/12/0 ... lm-report/
 
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aemoreira1981
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Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 1:38 am

Even without Richard Branson's abrupt change of mind, it would have been next to impossible to consummate this deal, because DL also has a stake in AF/KL, and this would have made VS a foreign-owned airline (more than 50% controlled by DL). Remember, the UK is still in the EU and EU carriers must be majority-held by EU companies. This will be a problem for IAG post-Brexit, and was a partial factor in the collapse of Thomas Cook's UK operations and the complete collapse of flybmi; flybmi was relying on contracts on the mainland.

It would be a better idea to have considered offering that stake, or a much smaller part of it to Stobart Group instead, which is a partner in the future Virgin Connect (once Flybe is rebranded); that has a greater chance of being approved, and Branson can maintain more seats on the board.
 
BNAMealer
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Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 1:48 am

sonicruiser wrote:
Looks like DL is getting a taste of its own medicine after the LATAM deal. Backstabbers can get backstabbed too.


How so? Nothing has indicated that VS is planning to exit the jv.
 
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EA CO AS
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Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 1:48 am

Maybe SRB got an offer to buy that 31% of VS from AS.... :duck:
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
clrd4t8koff
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Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 1:50 am

JAMBOJET wrote:
Saying VS wouldn’t grow to Canada because AC is too big in the market is like saying VS would never fly to Atlanta because Delta is too big.


The reason VS DOES fly to ATL is because of the JV with DL, not because it’s looking to compete.
 
clrd4t8koff
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Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 1:54 am

chrisp390 wrote:
The key is the very high value flyers use AC and UA, the people using WS and DL are much less valuable. So in the interest of increasing the value of Virgin Atlantic, it would be in Branson’s interest to explore a relationship between AC and UA. Maybe it wouldn’t mean the DL relationship ends, but it could mean a balancing act between both.


Huh? Where on earth did you come up with this nonsense. DL is one of the most profitable airlines in the world, way more so than AC or UA, but yet it’s flyers are less valuable?? Please post a source corroborating this ridiculousness.
 
DDR
Posts: 1648
Joined: Sat Sep 28, 2013 11:09 pm

Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 2:02 am

DL owns 49% of VS. that means unless DL sold their shares (which they won’t) there is no way that UA or AC can control VS. DL and VS are married at the hip, no matter what Mr. Branson thinks.
 
BNAMealer
Posts: 428
Joined: Sat Jul 27, 2019 8:03 pm

Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 2:03 am

TTailedTiger wrote:
Good. Giving Delta control of yet another airline is bad for competition.


I always though that VS building up LHR to become a second flag carrier, thereby giving DL/VS/AF/KL hubs at the top 3 airports in Europe wouldn’t pass the antitrust smell test.
 
JAMBOJET
Posts: 151
Joined: Tue Dec 11, 2018 6:23 pm

Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 2:06 am

clrd4t8koff wrote:
JAMBOJET wrote:
Saying VS wouldn’t grow to Canada because AC is too big in the market is like saying VS would never fly to Atlanta because Delta is too big.


The reason VS DOES fly to ATL is because of the JV with DL, not because it’s looking to compete.

Yes. And the entire point replied to was "is VS better in the DL/AF/KL JV or the AC/LH/UA JV?". They wouldn't be competing with AC if they joined the AC/LH/UA JV. Hence the commentary about YYZ, YUL, and YVR as JV markets in that JV that would be VERY helpful for VS' LHR-based customers, to say nothing of UA hubs in SFO, ORD, IAH, and DC that have a LOT more O&D to London than ATL, MSP, DTW, and SLC.

Just to reiterate. This is just a fanciful idea. I'm aware there's no citation for this. Just interesting that, after two years of planning and a strong Delta desire, the controlling interest of VS is no longer for sale.
 
Oliver2020
Posts: 153
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Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 2:16 am

sonicruiser wrote:
Looks like DL is getting a taste of its own medicine after the LATAM deal. Backstabbers can get backstabbed too.


How exactly did Delta backstab AA or LATAM? To clarify there are no friends in the business world, companies make decisions based on future profits.

Hypothetically:
If an AA could get control over AF/KLM, and at that point AF/KLM dumps Delta, would that be wrong? No because that's business, and I say that as a Delta fanboy. I would consider it a wise move by AA.
 
JAMBOJET
Posts: 151
Joined: Tue Dec 11, 2018 6:23 pm

Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 2:48 am

DDR wrote:
DL owns 49% of VS. that means unless DL sold their shares (which they won’t) there is no way that UA or AC can control VS. DL and VS are married at the hip, no matter what Mr. Branson thinks.

So...
49%: Delta
51%: Mr Branson

I think it matters a lot what Mr Branson thinks unless basic math has recently changed. Pretty sure DL and VS are married at the hip, entirely based on what Mr Branson currently thinks, and nothing else.
49% bought Delta a lot more at AM because one entity didn't own the other 51%. That's not the case at VS.
 
GalebG4
Posts: 239
Joined: Fri Oct 19, 2012 11:49 pm

Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 3:00 am

Remember Delta is also a owner of 49% of Aeroméxico and that isn’t problem for Delta. I can see this SRB move, as a way to make money selling it or staying onboard taking 51% of profits. With possible expansion of Heathrow, looks like SRB wants his baby in his hands. But if we look at their VS Heathrow expansion plans they will probably become what SRB always wanted VS to be, BA competitor that is growing rapidly short haul and long haul. Bear in mind that future short haul operations will probably be part of Connect Airways Limited which means that even if it doesn’t exceed (which is not first time for SRB) VS is not in a big existential danger. Anyway VS is today well oiled machine which is for sure going to be profitable with important Delta JV and modernized fleet VS is today healthy prospective airline. Getting 49% of VS for £224 mil. isn’t so bad deal for Delta, when you consider that Singapore Airlines paid £869 mil. 2012 inflation adjusted. I mean getting something for £645 mil. price discount :old: is for me good deal. In June 2015, Richard Branson admitted that Virgin Atlantic would be in "real trouble" without strategic support from Delta Air Lines. Or in other words: Richard Branson gets his airline restructured and healthy back without penny of investment! “I just don't see that the guy [Branson] has anything that stands out in terms of what he has achieved in the industry." Willie you are wrong, guy is a genius! AF/KLM lawyers will work hard these weeks!
Last edited by GalebG4 on Tue Dec 03, 2019 3:19 am, edited 3 times in total.
 
User avatar
WassbiKhalifa
Posts: 28
Joined: Tue Aug 23, 2016 12:53 pm

Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 3:04 am

VS uses DL reservation systems. They aren't going anywhere. Their IT department does everything through DL.
 
rbavfan
Posts: 3378
Joined: Fri Apr 17, 2015 5:53 am

Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 4:15 am

MesabaXJ wrote:
I was reading an article that popped on Google that KL/AF can force a deal for them to purchase the 31% stake if they wish. The problem is KL/AF don't have a history of doing this. I say KL/AF buy 2% with DL owning 49% they have full control of the airline. :-)


There was a good point in % listed in earlier post. UK does not allow more than 49% foreign ownership. Delta already owns 49%, meaning thanks to Brexit, no non UK company can buy any more of it.
 
Sightseer
Posts: 966
Joined: Mon Jan 12, 2015 6:04 am

Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 4:51 am

rbavfan wrote:
MesabaXJ wrote:
I was reading an article that popped on Google that KL/AF can force a deal for them to purchase the 31% stake if they wish. The problem is KL/AF don't have a history of doing this. I say KL/AF buy 2% with DL owning 49% they have full control of the airline. :-)


There was a good point in % listed in earlier post. UK does not allow more than 49% foreign ownership. Delta already owns 49%, meaning thanks to Brexit, no non UK company can buy any more of it.

Assuming this is true, it absolutely bears repeating.

airzona11 wrote:

chrisp390 wrote:
/quote]

You talk a lot about “business execs”... you do realize DL is more profitable than all the other airlines you reference? By percent doesn’t DL tout a very high percent of premium cabin sold vs filled with upgrades?

Or are you saying, their planes do not have has many premium seats relative to UA so UA has the money makers?

I don't get it either.
 
questions
Posts: 2106
Joined: Thu Sep 15, 2011 4:51 am

Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 5:52 am

LAXintl wrote:
...Virgin Atlantic Airways Ltd... as it resumes a path for expansion... adds new routes and aircraft to end a period of relative stagnation.


What expansion? What new routes? The article makes it sound like VS has a major growth plan.
 
User avatar
usdcaguy
Posts: 1387
Joined: Mon Jan 26, 2004 12:41 pm

Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 7:05 am

chrisp390 wrote:
The key is the very high value flyers use AC and UA, the people using WS and DL are much less valuable. So in the interest of increasing the value of Virgin Atlantic, it would be in Branson’s interest to explore a relationship between AC and UA. Maybe it wouldn’t mean the DL relationship ends, but it could mean a balancing act between both.


You can't really argue anymore that any one US carrier has overwhelmingly better access to premium business. Every carrier has their own geographical advantages and disadvantages, and even then they have to leverage the heck out of them with schedule and price. DL used to have a disadvantage off the West Coast, but not anymore with their hubs in LAX and SEA. They also beefed up service to Latin America in the 2000's. If any carrier does have a disadvantage it's AA, but much of that has to do with their near-abandonment of NYC in favor of PHL, which really hasn't set them back much. They also have great hubs at CLT, MIA and LAX. Basically, VS's best bet in terms of US carriers is with DL given their presence on JFK-LHR, and they complement them greatly with their presence on the West Coast.
 
JAMBOJET
Posts: 151
Joined: Tue Dec 11, 2018 6:23 pm

Re: Branson Changes Mind on Selling VS stake to AFKL

Tue Dec 03, 2019 7:13 am

Sightseer wrote:
rbavfan wrote:
MesabaXJ wrote:
I was reading an article that popped on Google that KL/AF can force a deal for them to purchase the 31% stake if they wish. The problem is KL/AF don't have a history of doing this. I say KL/AF buy 2% with DL owning 49% they have full control of the airline. :-)


There was a good point in % listed in earlier post. UK does not allow more than 49% foreign ownership. Delta already owns 49%, meaning thanks to Brexit, no non UK company can buy any more of it.

Assuming this is true, it absolutely bears repeating.


Fair point but
1. If it actually were the real reason, it's a pretty easy one to mention publicly and it would be strange to decide this before Brexit is done and anyone knows how that will play out. Not to mention that the initial equity purchase and controlling interest sale announcement was post brexit vote. Not much as changed in terms of the uncertainty of the Brexit outcome since 2017.

2. If this were true, IAG would have the same issue. It's technically a Spanish-owned Company with headquarters in London. We know what EU rules will be post brexit as it relates to Foreign ownership, but we don't know what EU-UK rules will be as it relates to companies like IAG or the exact same issue that AF/KL would've had with VS.

AKA: This has nothing to do with Brexit.

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