Singapore Air discusses Virgin sale; Delta said to be buyer

Singapore Airlines Ltd. said it’s in talks about selling its 49 per cent stake in Virgin Atlantic after reports that Delta Air Lines Inc. is in interested in buying the shares.

The carrier “is in discussions with interested parties” that may or may not result in a transaction, the city-state’s flag-carrier said in a regulatory statement. Delta, the second-biggest US carrier, is in talks to buy part or all of the minority stake, according to people familiar with the situation.

Delta’s European partner in the SkyTeam alliance, Air-France KLM, might also take a stake in Virgin, said the people, who asked not to be identified discussing a private matter. The talks are at an early stage and it’s possible no agreement will be reached, one of the people said. Billionaire Richard Branson controls 51 per cent of Virgin.

The airline, the biggest rival to British Airways at Heathrow, has been seeking partners and in 2010 hired Deutsche Bank AG to assess options. A tie-up between Delta and Virgin could improve the US carrier’s access to Europe’s busiest hub and its ability to capture lucrative trans-Atlantic business traffic.

Representatives for Delta, Virgin and Air France-KLM declined to comment. The Delta talks were reported yesterday by the Sunday Times.

Singapore Air paid 600.3 million pounds, or about US$961 million today, for its Virgin stake in 1999.