DELTA Air Lines, Air France-KLM, and Virgin Atlantic are moving to deepen their alliance with a set of cross-ownership transactions that will move the industry another step towards international consolidation.

The airlines are hoping competition regulators will allow them to better co-ordinate frequent flyer programs, airport facilities, scheduling and fares in a move that will also see billionaire Richard Branson’s stake in the airline he founded cut to 20 percent.

The plan sees Delta buy a 10 per cent stake in Air France-KLM worth €375m euros ($US438m) as the European giant takes a 31 per cent stake in Virgin Atlantic for £220 million ($US287m). Delta already owns 49 per cent of Virgin Atlantic, a stake it bought in 2013.

The trans-Atlantic deal comes as China Eastern is also moving to buy a 10 per cent stake in Air France-KLM to strengthen the commercial ties between the two carriers. China Eastern and Delta are each subscribing equal amounts to two reserved capital increases totalling €751 million to obtain their shareholdings.

The partners are seeking a 15-year partnership and Delta said the expanded joint venture, which would include troubled Italian airline Alitalia, would offer customers “the most comprehensive“  trans-Atlantic network with almost 300 daily non-stop flights.

“A dynamic global landscape means it’s more important than ever for Delta to deepen ties with our global partners to provide opportunities for mutual growth,” Delta chief executive Ed Bastian said in a statement. “Bringing together the strengths of Delta, Air France-KLM and Virgin Atlantic into a combined joint venture will create the trans-Atlantic partnership of choice for customers.”.

Branson founded Virgin Atlantic in 1984 and said the deal would help the airline better compete with British Airways and its US alliance, partner American Airlines.

He told staff in an open letter that the alliance with Delta had already helped Virgin Atlantic with a traffic feed from America and the relationship with Air-France KLM would help overcome a lack of slots in London to provide network and connections in Europe.

He predicted the alliance would “extremely beneficial’’ to Virgin Atlantic.

 “We’ve also agreed with our partners how important it is the Virgin Atlantic brand lives on as part of our arrangement, and I will remain the largest individual shareholder,’’ he said.

“As I get a little older, I want to be certain that all the necessary building blocks are in place for Virgin Atlantic to continue to prosper and grow for the next 50 years.

“The airline industry has consolidated over Virgin Atlantic’s lifetime and it’s now our turn to put ourselves at the heart of an important alliance, to create a stronger customer champion and build an airline which provides great opportunities for our team around the world.’’

Delta has made a number of investments and alliances in past decade, mostly with fellow members of the SkyTeam global alliance, aimed at extending its global reach  

The Atlanta-based airline’s existing joint venture with Air France-KLM dates to 2009, with the addition of Alitalia in 2010.

It launched a joint-venture with Virgin Australia in 2012 and entered into an enhanced marketing arrangement with China eastern in 2015 that included buying a 3.5 per cent stake.

In 2017,  Delta launched its joint cooperation agreement with Aeromexico, increasing its equity stake in the carrier to 49 percent, and announced a joint venture with Korean Air Lines.  The US carrier also holds a 9.5 percent equity interest in Brazil-based airline GOL.

 Air France-KLM said the China Eastern deal would secure its presence in the Chinese market and give it a leadership position in China Eastern’s Shanghai hub.

It is also looking for increased cooperation in terms of network, pricing and operations and said the move would take place  “in accordance” with the partnership strategy of Delta, which holds a 3.2 per cent stake in China Eastern.

 “This partnership which is unprecedented in scale gives Air France-KLM a leadership position in the worldwide airline industry,’’ Air France-KLM chief executive Jean-Marc Janaillac said in the announcement.

“With Delta and Virgin Atlantic we are reinforcing our trans-Atlantic alliance, making us the number one alliance between Europe and the United States in terms of traffic. With China Eastern, we are consolidating our position on a high-growth market. ‘’