AIR France-KLM, Europe's largest airline by revenue, and Atlanta-based Delta Air Lines are working together to examine a bid for Virgin Atlantic, the British newspaper the Sunday Times reported.

The consortium is trying to tempt Virgin into joining the Skyteam alliance and has hired Goldman Sachs as an adviser, the paper said.

Virgin Atlantic responded with a statement that said: "Virgin Atlantic is a strong, independent business with a good growth position at both London Heathrow and Gatwick so we are not surprised that there is interest in us."

Virgin founder Richard Branson retained a 51 -percent stake in the airline, while Singapore Airlines holds the remainder.

"As a matter of policy, we do not comment on industry rumors or speculation about potential airline partnership," said Olivia Cullis, a spokeswoman for Delta.