Published: 03 Dec 2012
Last Updated: 03 Dec 2012
It’s all go over at Virgin Atlantic. Only last month Beardy was getting his paws on more impossible-to-come-by slots at Heathrow by snatching up BMI’s old capacity and launching services to Edinburgh and Aberdeen. Now Singapore Airlines has apparently decided to flog the stake it bought in the airline back in 2000, worth about £600m. The two aren’t connected – the Singapore Airlines execs don’t simply have an irrational fear of kilts, haggis and stereotypes. The airline is in fact keen to escape those crowded European skies and instead spread its wings in the rapidly expanding budget market in South-east Asia and Australia. It already bought a 10% stake in Virgin Australia in October, with that end in mind.
So what does that mean for the Virgin cockpit? It seems America’s Delta Air Lines is primed to strap itself into the co-pilot’s chair. Delta has been looking at a stake in Virgin for a couple of years, and it’d certainly be a good move: a partnership with Virgin would allow it access to the lucrative transatlantic business traveller market, all those bleary-eyed suits reclining under G&Ts between the US and London. Last time it balked at the asking price, but the addition of those tasty new slots at Heathrow might just be enough to swing it now.
This has naturally fuelled speculation that El Beardo may finally wind up ceding control of the firm he launched back in 1984, with a maiden flight from Gatwick to Newark. The airline industry is starting to sound increasingly like West Side Story these days, and Branson has made no secret that Virgin will have to join one of the three major alliances – SkyTeam, OneWorld or Star – to remain competitive. A couple of years back he appointed Deutsche Bank to examine offers. He holds 51% currently, but a move by Delta to buy out Singapore Airlnes may prompt its SkyTeam alliance partner Air France-KLM to acquire a chunk of Branson’s stake too. Are you keeping up? It’s almost as complicated as working out what you’re allowed to take through security this week.
It’s all because EU rules say that any airline operator within its boundaries must be controlled by a European-based business. Branson is thought to support the deal, in which case he may have to sell enough to cede control. And for once there shouldn’t be much of a regulatory barrier: British Airways and American Airlines have already been given clearance by US authorities to jointly run their transatlantic businesses. Looks like the arch entrepreneur may have some chin-stroking to do...
So what does that mean for the Virgin cockpit? It seems America’s Delta Air Lines is primed to strap itself into the co-pilot’s chair. Delta has been looking at a stake in Virgin for a couple of years, and it’d certainly be a good move: a partnership with Virgin would allow it access to the lucrative transatlantic business traveller market, all those bleary-eyed suits reclining under G&Ts between the US and London. Last time it balked at the asking price, but the addition of those tasty new slots at Heathrow might just be enough to swing it now.
This has naturally fuelled speculation that El Beardo may finally wind up ceding control of the firm he launched back in 1984, with a maiden flight from Gatwick to Newark. The airline industry is starting to sound increasingly like West Side Story these days, and Branson has made no secret that Virgin will have to join one of the three major alliances – SkyTeam, OneWorld or Star – to remain competitive. A couple of years back he appointed Deutsche Bank to examine offers. He holds 51% currently, but a move by Delta to buy out Singapore Airlnes may prompt its SkyTeam alliance partner Air France-KLM to acquire a chunk of Branson’s stake too. Are you keeping up? It’s almost as complicated as working out what you’re allowed to take through security this week.
It’s all because EU rules say that any airline operator within its boundaries must be controlled by a European-based business. Branson is thought to support the deal, in which case he may have to sell enough to cede control. And for once there shouldn’t be much of a regulatory barrier: British Airways and American Airlines have already been given clearance by US authorities to jointly run their transatlantic businesses. Looks like the arch entrepreneur may have some chin-stroking to do...
