Delta among suitors for Virgin Atlantic stake: sources
By Rhys Jones and Charmian Kok
LONDON/SINGAPORE (Reuters) - Singapore Airlines (SIAL.SI: Quote) is in talks to sell its 49 percent stake in British carrier Virgin Atlantic, with sources saying Delta Air Lines (DAL.N: Quote) is among the suitors keen to access Virgin's lucrative slots at London's Heathrow airport.
Richard Branson's Virgin Group wants to keep its 51 percent stake in Virgin Atlantic and work with Delta if the U.S. 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 (ICAG.L: Quote) British Airways.
Delta has been considering ways to partner with Air France-KLM (AIRF.PA: Quote), which could also take a stake in Virgin Atlantic, one person familiar with the matter said.
The European Union requires that EU 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 signaled the British entrepreneur was not looking to sell.
"As far as he (Branson) is concerned, it is just Singapore Airlines' 49 percent 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. Continued...