Virgin Atlantic aircraft stand at Heathrow airport in London, U.K., on Thursday, July 29, 2010. Richard Branson said he intends to remain a “major shareholder” in Virgin Atlantic Airways as his bankers review the airline’s future and he seeks a partner to compete with British Airways. Photographer: Simon Dawson/Bloomberg
April 6 (Bloomberg) -- Richard Branson, founder of Virgin Group Ltd., talks about the possibility of finding a partner for Virgin Atlantic Airways Ltd. to compete with British Airways.
Branson also discusses the Virgin Galactic commercial space-travel venture. He speaks with Cory Johnson on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)
Richard Branson, founder and chairman of Virgin Group Ltd. Photographer: David Paul Morris/Bloomberg
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. (SIA) owns 49 percent of Virgin Atlantic.
It belongs to the Star Alliance, which includes United
Continental Holdings Inc. (UAL) and Deutsche Lufthansa AG. (LHA) Singapore
Airlines said last month that it hadn’t made a decision about
any “immediate divestment” of its stake.
Bankers’ Review
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. (DAL) and Air France-KLM (AF) 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. (AMR)’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 Hub
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.
To contact the reporters on this story:
Ryan Flinn in San Francisco at
rflinn@bloomberg.net;
Mary Jane Credeur in Atlanta at
mcredeur@bloomberg.net
To contact the editor responsible for this story:
Ed Dufner at
edufner@bloomberg.net