Delta Joins Bidders For Virgin Atlantic Stake

Singapore Airlines is in talks to sell its 49 per cent stake in British carrier Virgin Atlantic, with sources saying
Delta Air Lines is among those jostling to access Virgin’s lucrative slots at
London’s Heathrow airport.

Richard Branson’s Virgin Group wants to
keep its 51 per cent stake in Virgin Atlantic and work with Delta if the US
carrier pulls off a deal, a source familiar with Branson’s thinking added on
Monday.

Singapore Airlines said in a brief
statement it was in talks with interested parties but did not name them. It
also cautioned the discussions might not result in a deal.

Airlines like Delta have long hoped to
break into London’s capacity-constrained Heathrow airport, a lucrative hub for
corporate passengers where landing slots are generally hard to acquire. Virgin
Atlantic is the second-largest carrier at Heathrow after IAG’s British Airways.

Delta has been considering ways to
partner with Air France-KLM, which could also take a stake in Virgin Atlantic,
one person familiar with the matter said.

The European Union (EU) requires that
its carriers be under European control, meaning Delta would need an EU airline
as a partner if it wanted majority control of Virgin Atlantic.

If Air France-KLM were to buy a small
percentage of Branson’s stake, then Virgin Atlantic could continue to be
European controlled. However, the source close to Branson signalled the British
entrepreneur was not looking to sell.

“As far as he (Branson) is concerned, it
is just Singapore Airlines’ 49 per cent stake that is up for sale, he is keen
to maintain control of Virgin Atlantic and form a stronger airline,” the source
said, adding Branson supported a deal with Delta because it would make Virgin
Atlantic stronger on routes between Britain and the United States.