FT.com
14 May 2008
Singapore Airlines has had it with transatlantic travel.
The chief executive of the far east carrier on Wednesday was quoted by wires as saying that it was open to offers for its 49 per cent stake in the Virgin Atlantic group, which it viewed as an underperforming investment.
Hard not to really. SIA paid £600m for a 49 per cent stake in Virgin in 1999 - even as the airline faltered after its earnings peak in the preceding years, with a failed deal with Continental and a pulled flotation.
But what hope is there for Singapore? The airline has been touting its stake around since (at least) last summer, aiming to cash out while the going was relatively good. Last year, analysts estimated that Virgin Atlantic could be worth about £760m - with estimated operating profits for 2007 at about £120m taxed and valued at nine times, a slight premium to rival BA. That would have put SIA’s stake at about £370m.
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