SINGAPORE - Singapore Airlines (SIA) has completed the sale of its 49 per cent stake in British airline Virgin Atlantic to US-based Delta Air Lines for US$360 million.
The sale, announced last December, has been completed as agreed, SIA and Delta said last night. Virgin founder Richard Branson will keep his 51 per cent share in the airline.
SIA will book a gain of S$322 million from the sale, as the carrying value of the investment has been entirely written off to retained earnings and reserves.
In 2000, SIA bought its stake in Virgin for £600 million (S$1.6 billion then), in the hope that this would give it a foothold on the trans-Atlantic route via Heathrow Airport, which is route-restricted.
But the alliance did not stretch far beyond a code- share arrangement, frequent-flyer programme cross-participation and reciprocal lounge access. All these commercial arrangements between SIA and Virgin will remain in place, SIA said.
Last week, Atlanta- based Delta received regulatory approval from the European Commission and the US Justice Department, paving the way for the deal's completion.
Delta and Virgin said last night that they are still waiting for the US Transportation Department to grant them antitrust immunity for a joint venture on non-stop routes between the US and UK. They expect the review to be completed by the third quarter of 2013 and for the transatlantic joint venture to begin in the first quarter of 2014.
The two carriers have announced a code-share agreement across more than 100 routes, and plan to start cross-selling seats next month.
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