Delta Air Lines, Air France-KLM, and Virgin Atlantic’s application for a joint venture for all services – including cargo – between the US and Europe has been granted ‘tentative’ antitrust immunity by the US Department of Transportation (DoT).
The expanded joint venture effectively combines two previously approved arrangements in the US-UK and US-continental Europe markets into a single joint transatlantic venture.
The tentative decision, issued 2 August, is subject to conditions, with the DoT proposing that the carriers report annually on the progress of their commercial cooperation and provide a detailed assessment after five years. This would undergo what the DoT described as, “a comprehensive, data-driven review by the Department and focus on key competition issues identified in the Show Cause Order.”
Interested parties now have 14 business days in which objections can be submitted, following which, final approval is expected to be given.
Once granted, the new joint venture will enable the three carrier groups to coordinate schedules, capacity and pricing on both the passenger, as well as cargo side of the business.
The new joint venture is well beyond the typical joint venture in the industry as this one involves equity stakes.
The deal involves Air France-KLM buying 31 per cent of Virgin Atlantic from the Virgin Group, giving it joint control of the airline together with Delta and the Virgin Group. Delta already owns 49 per cent of Virgin Atlantic and 9.0 per cent of Air France-KLM.
EU antitrust regulators in February cleared Air France-KLM, Delta and Virgin Group to acquire joint control over Virgin Atlantic, saying they did not see any competition concerns.
Speaking to AsiaCargoBuzz.com in June, Dominic Kennedy, managing director, cargo, Virgin Atlantic Cargo highlighted a key aspect of the new joint venture from Virgin’s cargo perspective.
“We want our customers to benefit from as much choice as we can possibly give them, so one of the principles that guided the conversation with Delta is this principle of choice,” Kennedy said. “We want our customers to be able to choose freely with whom they interact, but when they do, we want them to be able to access our partners inventory seamlessly,” he added.