Singapore Airlines in talks to sell stake in Virgin Atlantic

Singapore Airlines says it is in talks to sell its 49 per cent stake in Virgin Atlantic after people familiar with the matter said Delta Air Lines was discussing buying shares.

The talks with "interested parties" might not result in a transaction, SIA said yesterday. Delta was discussing buying part or all of the stake, said the people who asked not to be named as the matter is private. Delta's partner Air-France KLM might also take a stake.

Richard Branson controls 51 per cent of Virgin.

SIA may exit the British carrier after 13 years as Virgin struggles with rising fuel prices and increased competition from British Airways at Heathrow Airport.

For Delta, the second-biggest airline in the United States, a deal would increase access to Europe's busiest airport and boost its ability to capture lucrative transatlantic business traffic.

"Virgin Atlantic has some interesting slots at Heathrow and slots are a very scarce commodity in the UK," said Arnaud Bouchet, a Singapore-based analyst at BNP Paribas. This might be "an interesting opportunity" for SIA to sell its stake.