Interest in Virgin America air unit

Virgin America, the airline backed by UK billionaire Richard Branson, is reaching out to potential buyers about a sale of part or all of the company, people with knowledge of the matter said.

The carrier, which flies to destinations throughout the US and Mexico, is working with a financial adviser after receiving takeover interest, the people said, asking not to be identified as the matter is private.

No decision has been made, and Virgin America may choose not to pursue a sale, they said.

Shares in Virgin America rose up to 12% at one stage before they were temporarily halted in New York, valuing the company at about $1.5bn (€1.33bn).

Representatives for Virgin America didn’t immediately respond to requests for comment.

The California-based airline sold stock in a $353m initial public offering less than 18 months ago, pricing its shares at $23 apiece.

Mr Branson is the founder of the Virgin Group, which also owns stakes in gyms, hotels and telecommunications companies around the world.

Separately, Virgin Atlantic yesterday indicated it sees growth as costly fuels hedges unwind.

Virgin Atlantic said annual profit almost doubled in 2015, and was set to grow significantly in 2016 as its fuel hedges unwind, enabling it to fully benefit from the lower oil price.

That airline, which is 51%-owned by its Mr Branson and 49%-owned by US carrier Delta Air Lines, posted an annual pre-tax profit of £22.5m (€28.6m) in 2015, compared to the £12.4m it made in 2014.

For this year, Virgin Atlantic said profits would grow significantly as fuel hedges unwind, producing noticeable savings.

While the airline was helped by a 34% fall in the crude price last year, that benefit was limited by hedging losses which amounted to £198m, it said.