Merger speculation grows as Virgin Atlantic reveals interest

Virgin Atlantic has fuelled speculation that it could pursue a merger or tie-up after it said it had received "a number of lines of enquiry".

The airline, which made a loss last year, said it has been contacted by other companies since it appointed Deutsche Bank at the beginning of November to assess the aviation industry and seek growth opportunities.

Virgin Atlantic said: "Following Deutsche Bank's recent appointment, we have received a number of lines of enquiry but it is far too early to comment on individual details. We expect Deutsche Bank's work to run on for a number of months but have nothing further to add at this stage."

The company refused to comment on media reports that American airline Delta is interested in a merger and may have hired investment bank Goldman Sachs to advise it.

It is understood that if the two airlines formed an alliance, Virgin Atlantic would benefit from access to the SkyTeam alliance of 13 airlines from around the world.

Delta would benefit from gaining access to Virgin's landing slots at Heathrow.

Virgin Atlantic is not thought to have hired Deutsche Bank in direct response to its rival British Airways signing an agreement with American Airlines and Spanish airline Iberia.

The airline, which is 51 per cent owned by Sir Richard Branson's Virgin Group and 49 per cent owned by Singapore Airlines, vigorously opposed the move claiming it would make the trans-Atlantic market less competitive. BA last month completed a merger with Iberia to save costs in the increasingly competitive industry.