Is it all up in the air for Virgin Atlantic?

Is it all up in the air for Virgin Atlantic?

Virgin Atlantic disrupted the trans-atlantic flight market when it appeared on the scene in 1984. By offering a premium service it took on the flag carriers at their own game with an injection of just a little bit more cool at a time when British Airways was behaving more like a state owned business than a dynamic longhaul airline.

So the news last week that a further 31% of the airline has been sold was particularly interesting. Since 2013 49% has been owned by Delta, but this additional 31% is going to a consortia of Air France-KLM. However, as part of the deal Delta is acquiring 10% of Air France-KLM, so really this represents a tighter binding of smaller players. Also involved (peripherally) in the deal through its links to Air France is Alitalia.

On one level this is merely symptomatic of the consolidation in the airline industry which has been ongoing since the turn of the century. However, none of the airlines involved in the deal are known for their cool, their luxury, or even their reliability. Virgin keep 20% of the shares and the chairmanship but it remains to be seen how the new ownership structure will affect them in the longer term. On the face of it Delta and AF-KLM have bought into a highly lucrative series of routes and landing slots, but it raises the question of what they’re going to do with them. Will Virgin be allowed to continue to plough its own furrow, or will the pressure be on to take the brand in a different direction?

Matthew Wheeldon Matthew Wheeldon