Branson to Stay ‘Major’ Virgin Atlantic Holder as Partner SoughtRyan Flinn and Mary Jane Credeur
Richard Branson said he intends to remain a “major shareholder” in his Virgin Atlantic Airways Ltd. as his bankers review the airline’s future and he seeks a partner to compete with British Airways.
“It makes sense for Virgin Atlantic to have a partner as well,” the U.K. billionaire said yesterday in an interview in San Francisco. “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.”
Branson, 60, is studying the sale of his 51 percent stake after hiring Deutsche Bank AG to assess options, a person familiar with the matter has said. Virgin Atlantic isn’t in an airline alliance, while British Airways, a rival at London’s Heathrow airport, belongs to the Oneworld group.
Asked whether Crawley, England-based Virgin Atlantic has received any offers, Branson said: “We have received offers, but it’s too soon to say more.” He wouldn’t say what the offers were for or provide any other details.
Singapore Airlines Ltd. owns 49 percent of Virgin Atlantic. It belongs to the Star Alliance, which includes United Continental Holdings Inc. and Deutsche Lufthansa AG. Singapore Airlines said last month that it hadn’t made a decision about any “immediate divestment” of its stake.
Virgin Atlantic confirmed Deutsche Bank’s review in December and said then it had gotten a “number of lines of enquiry.” That study includes a sale of Branson’s stake, the person familiar with the issue said last month, speaking on condition of anonymity because the talks are private.
Asked yesterday whether he will retain his 51 percent share or consider selling some of it, Branson said: “It’s too soon to say, but I will certainly still play a major role, whatever happens.”
Joining an alliance such as Oneworld, Star or the SkyTeam group led by Delta Air Lines Inc. and Air France-KLM would bolster Virgin Atlantic by letting fliers book seats on its planes as well as on those of its partners on routes it doesn’t serve. Oneworld’s members include AMR Corp.’s American Airlines.
“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,” Branson said in a Bloomberg Television interview. “Those discussions are going on. I think we will be able to announce within a few months an alliance partner.”
Heathrow, Europe’s busiest airport, is the biggest hub for Virgin Atlantic and British Airways, a unit of International Consolidated Airlines Group SA. At 15 miles (24 kilometers) from London, it is only about half as far as Gatwick airport, making it a magnet for the business fliers prized by airlines.
Branson was in San Francisco to mark the opening of a new terminal for Virgin America Inc., the low-fare U.S. airline in which he holds a minority stake.
Virgin America is paring its planned growth in 2012 because of rising oil prices, Chief Executive Officer David Cush said in a separate interview. Instead of taking deliveries of 12 additional Airbus SAS A320 jets next year, “we’ll probably end up taking 4 or 5 aircraft,” he said.
“Oil prices make things difficult,” he said.
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