Air France-KLM is paying Sir Richard Branson £220 million for a 31% stake in Virgin Atlantic, the airline he founded more than 30 years ago.
The deal is part of a four-way joint-venture with Delta which will be the biggest shareholder with 49%. Virgin Group’s holding falls from 51% to 20%.
Sir Richard will stay on as chairman and said he would remain “very much involved”, but he will relinquish control.
Virgin Atlantic, which he launched in 1984, is expected to retain its independence as a UK airline and will continue to fly under the Virgin brand, so passengers will not notice any visible change.
The deal is part of a tie-up on transatlantic routes announced by Virgin, Delta and Air France-KLM together with ailing Italian carrier Alitalia.
They will join together in a single joint venture on flights between Europe and the US, co-operating on schedules and frequent flyer schemes.
The alliance is expected to increase competition with the partnership between American Airlines and British Airways.
Jean-Marc Janaillac, chief executive of Air France-KLM, said the deal would give customers “even more choice between Europe, UK and the United States via twelve hubs on both sides of the Atlantic”.
Virgin and Delta have operated a joint-venture for almost five years but competition has intensified, with newcomers including Norwegian offering no-frills long-haul flights.
Virgin has enjoyed mixed fortunes. Last year it reported its best profits for five years, but the company expects to fall into the red again in 2017 as the weaker pound pushes up costs and deters those planning holidays from making long-haul journeys.