Transport Airlines

It’s official: Delta buys 49 percent stake in Virgin Atlantic for $360 million

Dec 11, 2012 5:33 am

George Frey  / Reuters

A passenger talks on her phone at a Delta Air Lines gate a day before the annual Thanksgiving Day holiday at the Salt Lake City international airport, in Salt Lake City, Utah. George Frey / Reuters

Delta Air Lines Inc said it was buying Singapore Airlines Ltd’s 49 percent stake in Virgin Atlantic for $360 million, ending the Asian airline’s disappointing 12-year investment in the British carrier.

The sale by Singapore Airlines, 56 percent owned by state investor Temasek, underscores its reduced reliance on battered long-haul routes to Europe and the United States and its deeper focus on Asia.

The sale by Singapore Airlines came after sources familiar with the matter said Delta, the second-largest U.S. airline by operating revenue after United Continental Holdings, wants to gain access to Virgin’s landing rights at London’s Heathrow airport.

Heathrow is a lucrative hub for corporate passengers where landing slots are hard to acquire.

The deal, which Delta said would lead to a trans-Atlantic joint venture with Virgin Atlantic, is subject to regulatory clearance in the United States and Europe.

Singapore Airlines bought 49 percent of Virgin Atlantic for 600 million pounds in 1999, but wrote off goodwill amounting to 96 percent of its purchase price of Virgin.

Reporting by Ansuman Daga. Copyright (2012) Thomson Reuters. Click for restrictions.

Tags: ,

Next Up

More on Skift

Daily Travel Startup Watch: CityScout, Stayzapp and More
The Next Great Untapped Airline Fee Is Getting off the Plane First
5 New Travel Startups Bringing the On-Demand Economy to Private Jets
How Hotels and Airports Cater to the 21st Century Business Traveler