Air France-KLM is to acquire a 31% stake in Virgin Atlantic as part of wide-ranging agreement which would bring Delta Air Lines' existing transatlantic joint ventures with European partners into a new enhanced partnership.
At the same time, Delta and its Chinese partner China Eastern Airlines are both to acquire 10% stakes in Air France-KLM for €375 million ($437 million) each.
Delta already has a transatlantic joint venture with Air France-KLM and Alitalia, as well on US-UK routes with Virgin Atlantic - in which it holds a 49% stake. The US carrier also holds a small stake in SkyTeam partner China Eastern.
Under the agreement announced today, Air France-KLM will acquire 31% of Virgin Atlantic from Virgin Group for £220 million ($287 million). That acquisition is expected to take place in 2018.
Delta will retain its 49% share in Virgin, while Virgin Group will hold the remaining 20% and retain chairmanship of the airline.
"All transactions are subject to execution of definitive agreements and receipt of final shareholder, board, and regulatory approvals," the companies say, adding that Virgin Atlantic "would retain its independence as a UK airline with a UK operating certificate, and will continue to fly under the Virgin brand".
The partners says the enhanced joint venture will establish a combined partnership with a duration of at least 15 years.
Air France-KLM chief executive Jean-Marc Janaillac says: "With our partners Delta and Virgin Atlantic, we are pleased to reinforce our transatlantic partnership, offering our customers even more choice between Europe, UK and the United States via twelve hubs on both sides of the Atlantic."
Delta chief executive Ed Bastian adds: “By working even more closely with our great partners at Air France-KLM and Virgin Atlantic, together we will develop a path to increase competition across the Atlantic that will spur additional benefits for customers, employees and shareholders."