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Branson: Virgin Atlantic may need a merger

VIRGIN ATLANTIC may have to find a merger partner to keep up with its rivals, according to the airline’s owner Sir Richard Branson.

He said yesterday that the long haul carrier, which is already 49 per cent owned by Singapore Airlines, may need to come to a “situation where it would have to consolidate in order to survive”.

Virgin Atlantic said it is keeping a close eye on whether a trans-Atlantic tie-in between BA and American Airlines (AA) gets the green light from US competition regulators.

It said: “[A merger] would be one possibility if the British Airways and American Airlines [merger] was given the go ahead.”

The US Department of Transport has already given BA and AA tentative approval of the proposed merger, which will see the two airlines share a number of airport slots and combined routes.

Branson’s comments come as a number of airlines have merged this year, including rivals British Airways (BA), which finalised its $8bn (£5.5bn) merger agreements with Spanish carrier Iberia early last month. Similarly, United Airlines and Continental Airlines announced intentions to merge earlier this month.