Sir Richard Branson retains control of airline Virgin Atlantic in £224m deal
Delta Air Lines buys the holding of Singapore Airlines but Virgin retains the brand name and operating certificate
Tuesday 11 December 2012
Sir Richard Branson retained control of his airline Virgin Atlantic today after a deal that will see America's largest carrier take a 49% stake.
In the $360 million (£224 million) deal, Delta Air Lines has bought the holding of Singapore Airlines, but with Virgin retaining the brand name and operating certificate.
There has been speculation in recent weeks that Delta's European partner Air France-KLM may buy part of Sir Richard's 51% stake, leaving the entrepreneur without majority control of the airline.
Sir Richard said the airline would retain its "independent spirit".
He said: "It signals the start of an era of expansion, financial growth and many opportunities for our customers and our business."
Speculation about the deal has sparked a war of words between Sir Richard and the chief executive of BA owner IAG, Willie Walsh, this week.
Mr Walsh predicted that the Virgin brand would vanish if US airline Delta succeeded in buying the 49% stake owned by Singapore Airlines.
But Sir Richard said on his blog he was prepared to bet the boss of British Airways £1 million that Virgin Atlantic will not disappear within five years.
The airlines said the deal would allow them to offer a greatly expanded network from London's Heathrow Airport, where landing slots are scarce.
It will see a combined nine daily round trip flights from the airport to New York, and a total of 23 round trip flights between the UK and North America.
Virgin Atlantic chief executive Steve Ridgway said: "This unique joint venture will deliver much more effective competition at Heathrow."
Virgin, which has its headquarters at Gatwick Airport, has a fleet of 40 aircraft and flies around six million passengers a year to long-haul destinations. It posted a pre-tax loss of £80 million in the 12 months to the end of February.
Delta chief executive Richard Anderson said: "Our new partnership with Virgin Atlantic will strengthen both airlines and provide a more effective competitor between North America and the UK, particularly on the New York-London route, which is the largest airline route between the US and Europe."
Singapore paid £600 million for its stake in Virgin Atlantic in 1999.
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