Sir Richard Branson last night decided to fold up his business making flat beds for aircraft after losing a lengthy patent scrap with his former partner on the project.
Virgin Atlantic has been making Upper Class flat beds since 1998 in its battle against British Airways for premium class passengers. It is now selling the business to the French-owned company which it had been suing in a copyright dispute.
The pair had been working together to create the most luxurious flat beds on the market, known as the J2000 berth. They then improved on it with the flat bed Upper Class Suite.
They fell out when the Virgin partner started trying to sell similar designed flat beds to Virgin's rivals, including Delta Air Lines.
Virgin, headed by Sir Richard, sued its partner for £49m in a six-year legal spat but the UK Supreme Court ruled against it.
The partner company, Contour Premium Airline Seating, was later taken over by France's Zodiac Aerospace. Yesterday, Zodiac bought Virgin's part of the venture for an undisclosed sum.
In a statement, Virgin said: "It is not a core part of our business to also manufacture those products, and therefore we have taken the decision to transfer the undertakings."
Virgin was forced into investing heavily in luxury cabins when British Airways created a seat that allowed passengers to lie flat in 1996, initially for first class passengers but then to business. They proved so popular that other airlines, Virgin included, had to follow suit.
The Supreme Court declared earlier this week that Zodiac was not liable for damages despite an earlier hearing ruling in Virgin's favour.
Virgin's statement yesterday talked of the need for chief executive Craig Kreeger to focus all his efforts on turning the company around.
Mr Kreeger took over in February and the need to improve the business "means making strong decisions", it said.
The company claimed the decision was not directly linked to the ruling although its timing so soon after the Supreme Court ruling was clearly an influence.