SIA-Virgin Atlantic marriage on the rocks

SIA-Virgin Atlantic marriage on the rocks
Above photo is Mr Branson: Consistently refused to offer SIA any management control.

SINGAPORE - A 13-year marriage that started happily enough but soon deteriorated into an unhappy co- existence could soon end in divorce: Singapore Airlines (SIA) is said to be ready to offload its 49 per cent stake in Richard Branson-controlled Virgin Atlantic.

Delta, the second-biggest airline in the United States by revenue, is said to be in talks to buy SIA's stake.

British newspapers say that the deal could also be a precursor to Delta's European partner Air France- KLM buying out Mr Branson's entire 51 per cent majority stake in Virgin Atlantic.

European Union rules require majority European ownership of a European carrier.

SIA did not provide a definitive confirmation of any imminent deal.

"Singapore Airlines wishes to announce that it is in discussions with interested parties concerning the possible divestment of its 49 per cent shareholding in Virgin Atlantic Ltd," it said in a short statement.

"These discussions may or may not result in a transaction. Singapore Airlines will make further public announcements as necessary."

Prompted by a desire to connect its passengers from Singapore seamlessly via London to US eastern seaboard cities, SIA coughed up nearly £600 million in 1999 (S$1.65 billion then) for its 49 per cent stake in Virgin Atlantic.

But analysts now reckon Delta is unlikely to pay more than the book value of the stake, which they estimate to be under £100 million (S$195 million).

This would be much less than even a fifth of SIA's original investment.

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