SIA dumps Virgin Atlantic stake

Global - Singapore Airlines (SIA) has agreed to sell its 49% stake in UK-based Virgin Atlantic to Delta Air Lines for US$360million.Under the agreement, Delta will pay US$360 million in cash for SIA's entire shareholding in the UK-based airline group.According to SIA, Virgin had not "performed to expectations and the synergies the parties originally hoped for have not materialised". The sale would result in a profit being booked in Singapore Airlines' accounts, added SIA.Subject to approvals by regulators in Europe and US, the transaction is expected to close in the fourth quarter of 2013.Commercial arrangements between Singapore Airlines and Virgin Atlantic including codesharing, frequent-flyer programme ties and reciprocal lounge access will remain in place after the divestment, added SIA.SIA first acquired 49% of Virgin Atlantic in March 2000. Meanwhile, the partnership is expected to give Georgia-based Delta Airlines a greater presence at the London Heathrow airport and offer competitive advantage on flight routes between North America and the UK.Sir Richard Branson told the BBC that it was an "exciting day" in Virgin's history. "It signals the start of a new era of expansion, financial growth and many opportunities for our customers and our business," he said.SIA has been in the process of re-evaluating its business, launching long-haul budget airline Scoot and making aggressive moves for the Australian market. It earlier acquired 10% in Virgin Australia, one of the market's biggest players, looking to capitalise on the high volume of domestic flights in the country.Both the Virgin Atlantic sale and the buying of Virgin Australia's stake are separate deals for SIA, with both businesses being run separately.