Singapore Air's new CEO may sell Virgin stake

Singapore Airlines’s Goh Choon Phong, who takes over as chief executive officer on Monday, may shed the last major remains of the carrier’s global expansion strategy as he confronts rising competition in Asia.

Goh, 47, may get offers for the airline’s 49% stake in Virgin Atlantic after the UK carrier said this month it had received tie-up inquiries. Outgoing CEO Chew Choon Seng called the investment “underperforming” two years ago and has said the airline would consider a sale. In Asia, Goh faces low-fare competition on long-haul routes from Jetstar and AirAsia X Sdn, as well as renewed efforts by Cathay Pacific Airways and Korean Air Lines to lure lucrative businessclass travellers.

Middle East carriers Emirates Airline, Qatar Airways and Etihad Airways have also ordered close to 300 planes since 2007 as they build hubs linking Europe and Asia-Pacific . “Goh has a tough job ahead of him,” said K Ajith, a UOB-Kay Hian Research analyst in Singapore. “The environment is drastically different from 5-10 years ago, when SIA managed to fend off competition.

Virgin, 51% owned by billionaire Richard Branson, hired Deutsche Bank to explore options as British Airways boosts cooperation with American Airlines across the Atlantic and completes a merger with Madrid-based Iberia Lineas Aereas de Espana . Singapore Air bought its stake in a £600-million ($930 million) investment in 2000.

Singapore Air would consider “interesting opportunities” for the stake, Nicholas Ionides, a spokesman, said.