Rivals spark Virgin Atlantic deal talk
Wednesday 15 December 2010
Virgin Atlantic today fuelled speculation it could pursue a merger or tie-up after it said it had received "a number of lines of enquiry".
The airline, which made a loss last year, said it has been contacted by other companies since it appointed Deutsche Bank at the beginning of November to assess the aviation industry and seek growth opportunities.
Virgin Atlantic said today in a statement: "Following Deutsche Bank's recent appointment, we have received a number of lines of enquiry but it is far too early to comment on individual details.
"We expect Deutsche Bank's work to run on for a number of months but have nothing further to add at this stage."
The company refused to comment on media reports that American airline Delta is interested in a merger and may have hired investment bank Goldman Sachs to advise it.
It is understood that if the two airlines formed an alliance, Virgin Atlantic would benefit from access to the SkyTeam alliance of 13 airlines from around the world.
Delta would benefit from gaining access to Virgin's landing slots at Heathrow.
Virgin Atlantic is not thought to have hired Deutsche Bank in direct response to its rival British Airways signing an agreement with American Airlines and Spanish airline Iberia.
The airline, which is 51% owned by Sir Richard Branson's Virgin Group and 49% owned by Singapore Airlines, vigorously opposed the move claiming it would make the trans-Atlantic market less competitive.
BA last month completed a merger with Iberia as it looks to save costs in the increasingly competitive industry.
Virgin Atlantic made an operating loss of £132 million in the year to March 2010 on sales of £2.4 billion, which it described as one of the toughest years in its history.
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