An expanded joint-venture involving transatlantic flights between Delta Air Lines, Virgin Atlantic and Air France-KLM has received the go-ahead from the U.S. Department of Transportation which the partnership claims will provide “the most comprehensive route network, convenient flight schedules, competitive fares and reciprocal frequent flyer benefits.”
Covering all services between the USA and Europe, this new and expanded partnership will replace other existing agreements between the carriers, but will now exclude Alitalia, which had previously been involved. A statement issued by the U.S. Department of Transportation said: “The new joint venture will offer consumers the same benefits from the prior joint ventures, such as increased capacity and frequent flyer cooperation, as well as new benefits such as more options on European flights.” However, the approval given by the DOT also includes conditions aimed at protecting competition, promoting public benefits and increase seat availability. The joint venture was first announced in July 2017, at the same time as Delta took a 10 percent stake in Air France-KLM and Air France KLM agreed to acquire a 31 percent stake in Virgin Atlantic, a deal which was completed earlier this year. Delta Air Lines had previously completed its acquisition of a 49% stake in Virgin Atlantic in June 2013.
The only major objection to the JV came from U.S. low-cost carrier JetBlue Airways Corporation, which has plans to commence transatlantic flights in 2021. It argued that the JV would create an oligopoly and lead to a restriction of available slots at London Heathrow Airport, a criticism the JV felt was “unjustified”, making it clear in a statement that it would not have any: “material impact on slot concentration at any U.K. or European airport”. The statement added that: “The record clearly establishes that there is no material competitive overlap – and zero nonstop overlaps – between Virgin Atlantic and Air France-KLM in the transatlantic market.”
