Singapore Airlines is not ruling out a sale of the carrier’s 49 percent stake in Virgin Atlantic Airways after returns from its investment in the British airline fell short of expectations, its chief executive said in remarks published Wednesday. “Nothing is ruled out and nothing is ruled in,” chief executive Chew Choon Seng told the Straits Times newspaper.
“It has not produced the sort of returns we had anticipated when going in,” he said at the sidelines of SIA’s annual general meeting Tuesday.
SIA paid 600 million pounds (1.2 billion US) in 1999 for a 49 percent stake in the carrier that was started by flamboyant British entrepreneur Sir Richard Branson in 1984.
Soon after the investment, the global aviation industry was hit by the September 2001 terror attacks which seriously affected the trans-Atlantic travel sector.
“Unfortunately, the timing was such that soon after our investment, 9/11 happened and that severely impacted business across the Atlantic,” said Chew.
Chew’s remarks came after Branson told London’s City A.M. financial daily last month he would consider buying back the stake from the Singapore carrier.
“It is something we would consider,” the London paper quoted Branson as saying.
“We would look at the price and see if it is a fair one, and then see whether to buy the shares back in or not,” he said.
Branson, chairman of Virgin Atlantic Airways, currently owns 51 percent of the carrier.
A sale would value the stake at between 900 million pounds and 1.0 billion pounds (1.3 and 1.4 billion euros, 1.8 and 2.0 billion dollars), according to analysts.