Branson to sell half of airline in £600m deal

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The Independent Online

Richard Branson is to sell off half his airline, Virgin Atlantic, to Singapore Airlines in a £600 million deal.

Richard Branson is to sell off half his airline, Virgin Atlantic, to Singapore Airlines in a £600 million deal.

The two carriers will form a global partnership which is likely to come into being within two months.

On completion of the deal, which values Virgin Atlantic at a minimum of £1.225 billion, Mr Branson will separately invest in Singapore Airlines.

"This is a great day for all of us at Virgin Atlantic and for the travelling public," said Mr Branson today.

"As our route networks do not overlap, we can come together in offering a much wider choice of destinations with the best service on the ground, in the air, and at very competitive prices."

The two carriers will retain their distinctive identities and continue to develop their own products. But they will also enter into agreements to co-operate on such aspects as frequent flyer programmes, airport lounges and facilities and in the joint marketing of certain routes, known as codesharing.

"We are delighted to be entering this unique arrangement with Virgin Atlantic," said Singapore Airlines' deputy chairman Cheong Choong Kong.

"Singapore Airlines has always prided itself on being the best and we have watched Virgin Atlantic grow into a formidable airline with similar values of customer service, quality, and vision of the future."

Virgin Atlantic, which started in 1984 with one plane and one route - from London to New York - serves 22 destinations if its Delhi and Las Vegas services, which start next year, are taken into account.

Virgin has 32 wide-bodied jets. Singapore Airlines, which began in 1972, is one of the world's major carriers with 93 aircraft.

While Virgin has concentrated mainly on lucrative transatlantic routes, Singapore Airlines serves a vast worldwide network of 97 destinations.

Under the terms of the deal, it will acquire a minority stake of 49% of Virgin Atlantic, which is the holding company for Virgin Atlantic Airways, travel companies Virgin Holidays and Virgin Sun, and cargo operation Virgin Aviation Services.

The two companies will retain their independent management teams but Singapore will have some representation on the Virgin board.

Virgin has a staff of 6,500, while Singapore has nearly 28,000 employees. The Virgin move is further confirmation of the fact that "big is beautiful" in the world of aviation.

Most of the major carriers are involved in alliances, link-ups and codesharing arrangements as competition increases and people travel further afield.