Virgin Atlantic on brink of alliance, says Branson

Virgin Atlantic is set to agree an alliance within the next few months, Sir Richard Branson, the airline's owner, confirmed yesterday.

"We've said we would like to bring in an alliance partner to combat the fact that British Airways is tied up with American Airlines," Sir Richard said. "Those discussions are going on and I think we will be able to announce within a few months an alliance partner."

Sir Richard, who owns 51 per cent of Virgin Atlantic, appointed Deutsche Bank to review the airline's strategic opportunities in November last year, with the joint task of responding to rival BA's consolidation plans, and maximising value for Sir Richard.

The launch of the review raised questions about the possibility of the billionaire entrepreneur selling down his stake in the group, which is also part-owned by Singapore Airlines.

But Sir Richard said yesterday that he will continue as a major shareholder of the airline. "It makes sense for Virgin Atlantic to have a partner as well," he said. "I will certainly still be extremely involved in the airline, whatever we decide to do, and I will still be a major shareholder. We are in discussions with various people and will see what comes out of it."

The British airline's future plans have been under the spotlight since regulators waved through the "anti-trust immunity" allowing joint working on transatlantic routes between rival BA and American Airlines (AA) last July.

Sir Richard vociferously opposed the tie-up, claiming the move would create a "monster monopoly" that would be "disastrous" for passengers, because of the combined group's stranglehold on sought-after take-off slots at Heathrow.

But BA agreed to give up some slots to pacify watchdog concerns. And with the deal done, Virgin Atlantic has little option but to look for alliances of its own in the rapidly consolidating long-haul airline market.

By December, the company was already hinting at "a number of lines of enquiry" from potential partners, reportedly covering everything from minor marketing deals to major alliances. It has had little choice but to pursue a partnership, or face an increasingly difficult market on its core transatlantic routes in competition with the vast "virtual" companies created by the three major groupings: BA's OneWorld; the Star Alliance, which includes Lufthansa and United Airlines; and Air France, KLM and Delta's SkyTeam.

"Regulators have decided consolidation will be allowed because it will increase the availability of routes and fares will come down – but that also means more traffic and higher yielding traffic to the big alliances," James Halstead, an independent aviation analyst, said.

"So if Virgin Atlantic remains independent it will be more and more squeezed, particularly on the Atlantic routes, because the three major airlines with joint ventures are already taking up around 75 per cent of the capacity," he said.

The big question is whether Virgin Atlantic would favour links the Star Alliance or SkyTeam. Both groupings would see a major boost from the addition. And while Virgin Atlantic-owner Singapore Airlines belongs to Star Alliance, SkyTeam may push harder for a deal given that the grouping has only Delta on the transatlantic routes, Mr Halstead said.

Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
The teaser trailer has provoked more questions than answers
filmBut what is Bond's 'secret' that Moneypenny is talking about?
News
Johnny Depp is perhaps best known for his role as Jack Sparrow in Pirates of the Caribbean
peopleBut how did he break it?
Arts and Entertainment
Paul Walker and Vin Diesel in Fast and Furious 5
film
Sport
Lewis Hamilton secured his second straight pole of the season
f1Vettel beats Rosberg into third after thunderstorm delays qualifying
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss