[160219.EN.AIR] Air-France-KLM, Delta and Virgin Group Can Acquire Virgin Atlantic

THE European Commission in Brussels has approved the proposed acquisition of joint control over Virgin Atlantic by Air France-KLM, Delta and the Virgin Group.

The Commission launched an investigation of the deal under European Union Merger Regulation and concluded that the transaction "would raise no competition concerns" in the European Economic Area.

Under the proposed deal, Air France-KLM will take a 31 per cent joint-controlling interest in Virgin Atlantic Ltd, which leads to joint control over Virgin Atlantic by Air France-KLM, Delta Air Lines and Virgin Group.

The Commission had previously approved the acquisition of joint control of Virgin Atlantic by Delta and Virgin Group in June 2013.

The Commission investigated the impact of the transaction on the market for air transport of passengers, cargo air transport services and maintenance, repair and overhaul services, reports London's Air Cargo News.

For the air cargo market, the Commission stated that the transaction is "unlikely to raise competition concerns notably because Air France-KLM, Delta and Virgin Atlantic are not close competitors and continue to face strong competition on the affected cargo routes (e.g. from Lufthansa or Cargolux)".

The Commission said: "At the same time, Air France-KLM, Delta and Virgin Group intend to enhance the scope of their existing cooperation in the provision of air transport services for passengers and cargo by combining and expanding two pre-existing 'metal neutral' joint venture arrangements between Delta and Air France-KLM, and between Delta and Virgin Atlantic.

"These are cooperative arrangements in which they jointly plan and manage capacity, pricing, and inter-airline financial settlements, with all participating airlines sharing profits equally."

Source : HKSG.