Virgin Atlantic picks Deutsche Bank to plot future: report

5th November 2010, Comments 0 comments

Virgin Atlantic chief Richard Branson has hired Deutsche Bank to explore the airline's strategic options, a move analysts believe could lead to him surrendering control, it was reported on Friday.

"Deutsche Bank is working with Virgin Atlantic to assess the current aviation market place and seek growth opportunities for the airline," the carrier confirmed.

"This study is at a very early stage so there is no further comment to make at this time."

Branson, who owns 51 percent of the airline, called in the German bank to examine its market options following the hotly disputed trans-atlantic deal between British Airways (BA) and American Airlines.

Despite its healthy presence at London's flagship Heathrow Airport, Virgin is not part of any of the three major airline groupings -- the Star Alliance, SkyTeam and Oneworld.

"Virgin is becoming increasingly detached as BA, Iberia and American (Airlines) get up and running," Nomura analyst, Mark McVicar, told The Daily Telegraph newspaper.

"An independent airline strategy looks tougher now."

Deutsche Bank will be asked to look into possible ways of penetrating the major groupings, which could trigger a change in ownership at the British carrier.

A possible route could involve the creation of a new airline incorporating Virgin and medium-haul carrier Bmi, which is owned by Star Alliance member Lufthansa.

Lufthansa would take control of the new carrier, taking advantage of Virgin's brand and the German airline's Star Alliance membership.

The deal would be complicated by Singapore Airlines' 49 percent stake in Virgin and by conflicting valuations of Bmi.

© 2010 AFP

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