Singapore Airlines has agreed to sell its 49 per cent stake in Virgin Atlantic to Delta Air Lines.
Under the agreement, Delta will pay US$360 million in cash for Singapore Airlines’ entire shareholding in the UK-based airline group.
The agreement is subject to regulatory approvals being obtained in Europe and the United States.
Subject to these approvals being secured, the transaction is expected to close in the fourth quarter of the 2013 calendar year.
Singapore Airlines acquired 49 per cent of Virgin Atlantic in March 2000.
The Airline had been evaluating strategic options for the stake for some time, as the investment has not performed to expectations and the synergies the parties originally hoped for have not materialised.
The successful completion of the sale will result in a profit being booked in Singapore Airlines’ accounts.
Commercial arrangements between Singapore Airlines and Virgin Atlantic, encompassing code sharing, frequent-flyer programme ties and reciprocal lounge access, are expected to remain in place after the divestment.
“Our new partnership with Virgin Atlantic will strengthen both airlines and provide a more effective competitor between North America and the UK, particularly on the New York-London route, which is the largest airline route between the US and Europe,” said Delta chief executive Richard Anderson.
“By combining the strengths of our two companies in a joint venture, we can provide customers with a seamless network between North America and the U.K., and continue building a better airline for our customers, employees and shareholders.”
As part of a $3 billion investment in enhanced global products, services and airport facilities, all of Delta’s flights between the US and London-Heathrow feature full flat-bed seats offering direct aisle access in the BusinessElite cabin.
These flights also offer Delta’s popular Economy Comfort seating in the forward section of the economy cabin.
Economy Comfort offers four additional inches of legroom and 50 percent more recline compared to standard economy seats.
Virgin Atlantic has recently completed a £150m upgrade program. A new Upper Class cabin has been introduced across its Airbus A330 aircraft, which features the longest fully flat bed in the sky.
This is complemented by a redesigned onboard bar and new Clubhouses at both JFK and Newark airports.
The airline’s Boeing 747 leisure fleet has been completely refitted and features onboard connectivity and VERA Touch – Virgin Atlantic’s award-winning touch screen in-flight entertainment system – offering passengers hours of entertainment at their fingertips.
Virgin Atlantic president, Sir Richard Branson, commented: “This is an exciting day in Virgin Atlantic history.
“It signals the start of a new era of expansion, financial growth and many opportunities for our customers and our business.
“I truly look forward to the possibilities our partnership with Delta will offer. We have always been known for our innovation and service and have punched above our weight for 28 years.
“That is why our customers love us so much.
“We will retain that independent spirit but move forward in a strengthened partnership with Delta.”