Delta sizing up a stake in rival Virgin Atlantic

Marion Dakers
US airline Delta Air Lines is eyeing up a 49 per cent stake in Virgin Atlantic, according to reports.

Delta is said to have offered to buy Singapore Airlines’ holding in the London-based carrier.

Singapore has been open to bids for its stake in Virgin Atlantic for the last two years, having bought into the firm for £600m in 2000.

“We are always talking to many airlines on a number of different matters but we never comment on the details of these discussions,” a Virgin Atlantic spokeswoman said yesterday.

Neither Delta nor Singapore responded to requests for comment yesterday.

Under European rules, non-EU firms can own a maximum of 49 per cent of an airline based in the region.

But if Delta did buy out Singapore, the acquisition would pave the way for its European partner Air France-KLM to also invest in Virgin Atlantic, according to the Sunday Times.

This could leave Sir Richard Branson, who founded the airline in 1984, without majority control for the first time in the company’s history.

Virgin Atlantic hired Deutsche Bank in 2010 to examine its options, including a possible stake sale.

Delta, America’s biggest airline, has been previously linked to Singapore’s stake. Last year it was said to have hired Goldman Sachs to look at ways to entice Virgin into its SkyTeam alliance – a group of airlines that club together to offer customers more connections and cut down on costs.

Singapore Airlines is a member of the rival Star Alliance.

Virgin is in talks to join an alliance within the next three months, though the firm has not revealed which alliance it has targeted.

The firm hopes to secure such a deal before chief executive Steve Ridgway steps down. His departure is pencilled in for early 2013, and a search is underway to find his successor.