Virgin On A Deal? Airline In Tie-Up Talks
Wednesday, 15 December 2010 08:09
Sky News has learned that Virgin Atlantic has received a string of approaches from rivals, that could eventually lead to a merger or tie-up agreement.
Sir Richard Branson's company says there is no formal process underway with any potential partner, but the US airline Delta is among a number of companies assessing a tie-up.
That would almost certainly result in Sir Richard giving up overall control of Virgin.
Sky News City editor Mark Kleinman has learned that Delta's interest, while at an early stage, may have gone as far as recruiting investment bank Goldman Sachs to advise it.
Sir Richard owns 51% of Virgin - with Singapore Airlines maintaining the other 49%.
While he has asked Deutsche Bank to help evaluate his options, it is understood Singapore remains keen to offload its interest in Virgin but may struggle to recoup the £600m it paid.
A deal with Delta would give Virgin access to the SkyTeam alliance, which includes Delta and Air France-KLM, while Delta would benefit through access to Virgin's key landing slots at Heathrow.
But potential obstacles to agreement include restrictions governing airline ownership.
Airlines worldwide are looking to cut costs - identified as the key reason behind's British Airways' merger with Iberia and BA's tie-up with American Airlines - fiercely opposed by Virgin.
The "big is best" mentality was boosted by a report this week by the International Air Transport Association, which warned of tougher profitability for airlines worldwide in 2011, mainly as a result of higher oil prices.
Virgin Atlantic has told Sky News it "couldn't comment on the specifics" of the approaches it had received.
http://www.capitalfm.com/news-travel/national/virgin-on-a-deal-airline-in-tie-up-talks/
Wednesday, 15 December 2010 08:09
Sky News has learned that Virgin Atlantic has received a string of approaches from rivals, that could eventually lead to a merger or tie-up agreement.
Sir Richard Branson's company says there is no formal process underway with any potential partner, but the US airline Delta is among a number of companies assessing a tie-up.
That would almost certainly result in Sir Richard giving up overall control of Virgin.
Sky News City editor Mark Kleinman has learned that Delta's interest, while at an early stage, may have gone as far as recruiting investment bank Goldman Sachs to advise it.
Sir Richard owns 51% of Virgin - with Singapore Airlines maintaining the other 49%.
While he has asked Deutsche Bank to help evaluate his options, it is understood Singapore remains keen to offload its interest in Virgin but may struggle to recoup the £600m it paid.
A deal with Delta would give Virgin access to the SkyTeam alliance, which includes Delta and Air France-KLM, while Delta would benefit through access to Virgin's key landing slots at Heathrow.
But potential obstacles to agreement include restrictions governing airline ownership.
Airlines worldwide are looking to cut costs - identified as the key reason behind's British Airways' merger with Iberia and BA's tie-up with American Airlines - fiercely opposed by Virgin.
The "big is best" mentality was boosted by a report this week by the International Air Transport Association, which warned of tougher profitability for airlines worldwide in 2011, mainly as a result of higher oil prices.
Virgin Atlantic has told Sky News it "couldn't comment on the specifics" of the approaches it had received.
http://www.capitalfm.com/news-travel/national/virgin-on-a-deal-airline-in-tie-up-talks/
