U.K. billionaire Richard Branson is working to scrap the planned sale of a stake in Virgin Atlantic Airways Ltd. and will instead retain control of the airline he founded as it resumes a path for expansion, people with knowledge of the matter said.
Branson is closing in on an agreement to abandon a two-year-old plan to sell part of the airline to Air France-KLM Group, according to the people, who asked not to be named discussing private negotiations. He’ll now hang on to the 31% stake, keeping a 51% holding overall as Virgin Atlantic adds new routes and aircraft to end a period of relative stagnation.
A revenue and cost-sharing venture with Air France-KLM and Virgin’s 49% owner, Delta Air Lines Inc., is unaffected by the entrepreneur’s decision and should be implemented early next year, the people said.
“Air France KLM, Delta Air Lines and Virgin Atlantic are making final preparations towards the launch of their expanded trans-Atlantic joint venture which is expected in the near future,” Virgin Atlantic said in an emailed statement.
The company and Virgin Group declined to comment on the aborted stake sale. Air France-KLM, which agreed to purchase the stake for about 220 million pounds ($284 million) in 2017, declined to comment.
Branson last month spoke in glowing terms of Virgin Atlantic’s recent progress, saying he was sad to be surrendering control of the 35-year-old company. He said at the time the step was necessary to safeguard the carrier’s future in an industry increasingly dominated by a handful of airline groups.
Under Chief Executive Officer Shai Weiss, who took over in January, Virgin has resumed growth with the opening of routes to destinations including Tel Aviv and Mumbai. It has also ordered new Airbus SE A330neo aircraft and begun taking delivery of larger A350s, while purchasing regional specialist Flybe Group Plc to add vital feeder traffic.
A final agreement with Air France-KLM should be reached in the next few weeks, the people said.
La Tribune reported on Friday that Virgin no longer wanted to sell the stake to Air France-KLM.