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Virgin America, the, uhmmm, sort of foreign carrier operating domestic US routes:
Virgin America makes first flights
By Laura Mandaro
Aug 8, 2007 23:45:00 (ET)
SAN FRANCISCO (MarketWatch) -- Richard Branson's start-up U.S. airline Virgin America opened the gates to passengers Wednesday, nosing its way into a huge but competitive U.S. market with promises of better service, fewer delays and plenty of Virgin's trademark panache.
The first flight touched down at San Francisco International Airport just before 1:30 p.m. Pacific time, carrying the British billionaire, a magician, and about 150 other passengers affiliated with Virgin from New York City. The carrier's commercial flights, including a return flight to New York and shorter flights between Los Angeles and San Francisco, were scheduled to start later in the afternoon.
With economy fares priced to lure discount flyers and first-class service for the business traveler, Virgin America is going after flyers in some of the busiest and sought-after U.S. markets.
Airlines sell $515.9 million in tickets every year for the New York-to-San Francisco route, making it the second largest direct-flight path in the U.S. behind the $714.7 million Los Angeles-to-New York route. Virgin America is starting two daily flights between New York and Los Angeles at the end of this month. Fares between the California cities and New York start at less than $300 roundtrip for economy, and $800 for first class.
The founder and face of his sprawling British conglomerate, Branson didn't shy from snubbing the U.S. carriers that Virgin America says lobbied to bar its entry into U.S. domestic travel.
"American airlines have never really cared about quality in the sky," said Branson after deplaning and flashing the peace sign to a crowd composed largely of cheering employees from Virgin America, based just outside the airport in Burlingame, Calif. "We have created a quality airline."
The debut flights cap years of wrangling with the U.S. government over the company's ability to win certification as a U.S. air carrier, a process that pushed Virgin Group to put its voting shares in the carrier into a blind trust and give a gentle boot to its CEO.
And the long-anticipated inaugural flights didn't go without snag.
The first plane waited on the runway in New York Wednesday morning, delayed on takeoff because of the city's heavy rains and a pointed illustration of the difficulties facing the U.S airline industry. The sector has seen delays skyrocket to record levels as the nation's antiquated air traffic control system struggles with heavy flight demand and frequent disruptions from bad weather.
But the Airbus A320, named Air Colbert after the U.S. comedian Stephen Colbert, made up time cross-country. It landed less than 30 minutes after its scheduled arrival. The "California Dreaming," another Airbus A320 that took off in Los Angeles, landed seconds after the New York flight.
Branson, whose Virgin Group invested $150 million in the company and is still the single largest owner, said Virgin America's fleet of new Airbus planes should allow it to bypass some of the weather related delays marring travel on other carriers. Virgin America is expecting to receive classification in the next few months as a Category III carrier, which allows a plane to operate in foul weather.
"Virgin is not going to sort out the delay problem, but we can have less delays than other people," he said in an interview.
And it plans to expand without purchasing other carriers, leveraging the Virgin brand known to music buyers, cell-phone users and transatlantic flyers.
"In 10 years, most major cities will be covered," by Virgin America, he said.
The addition of Virgin America to the transcontinental and major West Coast routes is already caused turbulence in the airline sector -- at least in company stock prices.
Analysts say the new flights are likely to cut into the share of cross-country flights run by JetBlue Airways Corp. and of bigger carriers American Airlines, owned by AMR Corp. and UAL Corp.'s United Airlines.
Morgan Stanley analyst William Greene estimates Virgin America's new flights will compete directly or indirectly with about 50% of JetBlue's available seats, the major reason he knocked down his recommendation on JetBlue to underweight Tuesday.
"Typically, airlines enter new markets with 'promotional pricing' and we expect Virgin will follow this pattern," said Greene in a note to investors. "We see JetBlue as particularly exposed to this competitive challenge."
Shares in the Forest Hills, New York carrier fell 3.5% Tuesday, but rebounded about 7% Wednesday.
AMR's chief executive Gerald Arpey has predicted that "intense competition from several new airlines" including Virgin America "will likely make the second half of the year much more challenging."
Like JetBlue when it started seven years ago, Virgin America is packing its 10 new Airbus planes with all the gizmos, including seat-back televisions and massage chairs in first class.
"Virgin America is kind of like a JetBlue imitation," said Calyon Securities analyst Raymond Neidl.
Meanwhile, Virgin America's regional ambitions are likely to pressure sales of Alaska Airlines Group.
Virgin has said fares between San Francisco and Los Angeles and Las Vegas will run as low as $44 each way.
It's also selling seats in first class, offering business travelers the wider seating and service that discount leader Southwest Airlines Co. lacks but says it may add.
Virgin America is expanding in new routes even while other carriers scale back U.S. growth plans, as they try to improve profitability.
"The last thing we really need is another airline," said Neidl. "Right now there's too much capacity domestic, too much discounting going on, [and] as a result it's a drain on all the airlines," he said.
Indeed, carriers have had trouble raising fares in the busy summer travel season.
FareCompare.com estimates average U.S. and Canadian air fares are ranging 6% to 12% less than they did last summer, though prices on the cheapest seats have likely risen.
For consumers, the new entrant likely spells lower fares on the biggest cross-country and regional routes at least for a while.
"Whatever is Virgin America's best low fare, it wouldn't surprise me to see them match or better yet, beat it," said Randy Babbitt, managing partner at Reston, Va.-based aviation adviser Eclat Consulting.
An analysis by his firm of Transportation Department data showed Virgin America is trying to elbow its way into a $1.6 billion transcontinental market that carries 5.9 million passengers a year. That's just including flights between New York or Washington, D.C. to either Los Angeles or San Francisco.
Besides Branson, the New York flight carried CEO Fred Reid. Both Branson and Reid have had to distance themselves from the carrier to meet federal aviation rules restricting foreign ownership of domestic airlines. As one concession, Reid has agreed to resign as chief executive six months after Virgin America's certification. Reid, a former Delta Airlines Co. executive and a San Francisco native deemed too close to Branson's British conglomerate to ease U.S. concerns on foreign ownership, has said he could stay with the company until late November.
Virgin America makes first flights
By Laura Mandaro
Aug 8, 2007 23:45:00 (ET)
SAN FRANCISCO (MarketWatch) -- Richard Branson's start-up U.S. airline Virgin America opened the gates to passengers Wednesday, nosing its way into a huge but competitive U.S. market with promises of better service, fewer delays and plenty of Virgin's trademark panache.
The first flight touched down at San Francisco International Airport just before 1:30 p.m. Pacific time, carrying the British billionaire, a magician, and about 150 other passengers affiliated with Virgin from New York City. The carrier's commercial flights, including a return flight to New York and shorter flights between Los Angeles and San Francisco, were scheduled to start later in the afternoon.
With economy fares priced to lure discount flyers and first-class service for the business traveler, Virgin America is going after flyers in some of the busiest and sought-after U.S. markets.
Airlines sell $515.9 million in tickets every year for the New York-to-San Francisco route, making it the second largest direct-flight path in the U.S. behind the $714.7 million Los Angeles-to-New York route. Virgin America is starting two daily flights between New York and Los Angeles at the end of this month. Fares between the California cities and New York start at less than $300 roundtrip for economy, and $800 for first class.
The founder and face of his sprawling British conglomerate, Branson didn't shy from snubbing the U.S. carriers that Virgin America says lobbied to bar its entry into U.S. domestic travel.
"American airlines have never really cared about quality in the sky," said Branson after deplaning and flashing the peace sign to a crowd composed largely of cheering employees from Virgin America, based just outside the airport in Burlingame, Calif. "We have created a quality airline."
The debut flights cap years of wrangling with the U.S. government over the company's ability to win certification as a U.S. air carrier, a process that pushed Virgin Group to put its voting shares in the carrier into a blind trust and give a gentle boot to its CEO.
And the long-anticipated inaugural flights didn't go without snag.
The first plane waited on the runway in New York Wednesday morning, delayed on takeoff because of the city's heavy rains and a pointed illustration of the difficulties facing the U.S airline industry. The sector has seen delays skyrocket to record levels as the nation's antiquated air traffic control system struggles with heavy flight demand and frequent disruptions from bad weather.
But the Airbus A320, named Air Colbert after the U.S. comedian Stephen Colbert, made up time cross-country. It landed less than 30 minutes after its scheduled arrival. The "California Dreaming," another Airbus A320 that took off in Los Angeles, landed seconds after the New York flight.
Branson, whose Virgin Group invested $150 million in the company and is still the single largest owner, said Virgin America's fleet of new Airbus planes should allow it to bypass some of the weather related delays marring travel on other carriers. Virgin America is expecting to receive classification in the next few months as a Category III carrier, which allows a plane to operate in foul weather.
"Virgin is not going to sort out the delay problem, but we can have less delays than other people," he said in an interview.
And it plans to expand without purchasing other carriers, leveraging the Virgin brand known to music buyers, cell-phone users and transatlantic flyers.
"In 10 years, most major cities will be covered," by Virgin America, he said.
The addition of Virgin America to the transcontinental and major West Coast routes is already caused turbulence in the airline sector -- at least in company stock prices.
Analysts say the new flights are likely to cut into the share of cross-country flights run by JetBlue Airways Corp. and of bigger carriers American Airlines, owned by AMR Corp. and UAL Corp.'s United Airlines.
Morgan Stanley analyst William Greene estimates Virgin America's new flights will compete directly or indirectly with about 50% of JetBlue's available seats, the major reason he knocked down his recommendation on JetBlue to underweight Tuesday.
"Typically, airlines enter new markets with 'promotional pricing' and we expect Virgin will follow this pattern," said Greene in a note to investors. "We see JetBlue as particularly exposed to this competitive challenge."
Shares in the Forest Hills, New York carrier fell 3.5% Tuesday, but rebounded about 7% Wednesday.
AMR's chief executive Gerald Arpey has predicted that "intense competition from several new airlines" including Virgin America "will likely make the second half of the year much more challenging."
Like JetBlue when it started seven years ago, Virgin America is packing its 10 new Airbus planes with all the gizmos, including seat-back televisions and massage chairs in first class.
"Virgin America is kind of like a JetBlue imitation," said Calyon Securities analyst Raymond Neidl.
Meanwhile, Virgin America's regional ambitions are likely to pressure sales of Alaska Airlines Group.
Virgin has said fares between San Francisco and Los Angeles and Las Vegas will run as low as $44 each way.
It's also selling seats in first class, offering business travelers the wider seating and service that discount leader Southwest Airlines Co. lacks but says it may add.
Virgin America is expanding in new routes even while other carriers scale back U.S. growth plans, as they try to improve profitability.
"The last thing we really need is another airline," said Neidl. "Right now there's too much capacity domestic, too much discounting going on, [and] as a result it's a drain on all the airlines," he said.
Indeed, carriers have had trouble raising fares in the busy summer travel season.
FareCompare.com estimates average U.S. and Canadian air fares are ranging 6% to 12% less than they did last summer, though prices on the cheapest seats have likely risen.
For consumers, the new entrant likely spells lower fares on the biggest cross-country and regional routes at least for a while.
"Whatever is Virgin America's best low fare, it wouldn't surprise me to see them match or better yet, beat it," said Randy Babbitt, managing partner at Reston, Va.-based aviation adviser Eclat Consulting.
An analysis by his firm of Transportation Department data showed Virgin America is trying to elbow its way into a $1.6 billion transcontinental market that carries 5.9 million passengers a year. That's just including flights between New York or Washington, D.C. to either Los Angeles or San Francisco.
Besides Branson, the New York flight carried CEO Fred Reid. Both Branson and Reid have had to distance themselves from the carrier to meet federal aviation rules restricting foreign ownership of domestic airlines. As one concession, Reid has agreed to resign as chief executive six months after Virgin America's certification. Reid, a former Delta Airlines Co. executive and a San Francisco native deemed too close to Branson's British conglomerate to ease U.S. concerns on foreign ownership, has said he could stay with the company until late November.
Last edited:
Virgin America Lands at SFO Today (8/8)
Virgin America lands at SFO today
David Armstrong, Chronicle Staff Writer
Wednesday, August 8, 2007
sfgate_get_fprefs(); Startup airline Virgin America is scheduled to land its first planes today amid much hoopla, as passengers arrive at San Francisco International Airport from New York and Los Angeles.
The low-fare carrier, based in Burlingame, is beginning service with two flights per day out of SFO to New York and five to Los Angeles. It plans to begin service between SFO and Las Vegas, Boston and Washington in the coming months.
Among the glitterati expected to attend today's kickoff are Richard Branson, chairman of the Virgin Group; Virgin America Chief Executive Officer Fred Reid; San Francisco Mayor Gavin Newsom and possibly Gov. Arnold Schwarzenegger.
Virgin America set up skeletal office operations in 2004, promising to create excitement, jobs and an economic ripple effect in the Bay Area. It took three years, but funding finally fell into place, and the Transportation Department overcame questions about foreign ownership, signing off on Virgin America's flight plans.
Virgin America has already shown it can generate buzz. The fledgling carrier has held high-profile promotional events, enlisted members of the public to name its aircraft and imported celebrities associated with San Francisco, such as retired rock singer Grace Slick, to make appearances on its behalf.
The celebrity quotient will soar higher today, as Branson, founder of the Virgin Group, the London company that owns 25 percent of Virgin America and licenses the Virgin brand to Virgin America, jets into town. Newsom and Schwarzenegger lobbied Virgin America to set up its headquarters in the Bay Area. The governor talked up California to Branson and the state anted up nearly $13 million in job-training funds as inducements for the startup carrier to open its corporate headquarters here.
Virgin America has begun to fulfill its economic promise. But as a still-small startup, much of its commercial clout remains potential rather than actual.
Virgin America has hired about 500 of the estimated 3,000 to 5,000 employees it expects to eventually have on board, according to airline spokeswoman Abby Lunardini. About 100 of those employees are pilots and another 100 are flight attendants, she said. Most staffers are expected to be based in the Bay Area.
In July 2006, Virgin America - then attempting to secure government approval to begin service - commissioned a study that concluded it could save U.S. passengers $786 million a year with its lower airfares. The study, conducted by Campbell-Hill Aviation Group Inc., said Bay Area residents would gain the most, with $402 million in savings.
A separate study by the Bay Area Economic Forum released in November 2004 concluded that a domestic airline based at SFO and operating 70 flights per week could be expected to generate up to 3,891 jobs, 1,692 of which would be at the airport and 2,199 associated with the visitor industry.
An airline that size would generate about $241 million a year in business revenue, the study said. With 140 flights weekly, annual revenue would jump to $482 million.
Both SFO and the Mayor's Office of Economic and Workforce Development are using the forum numbers to gain a sense of the new airline's economic impact, according to Deputy Airport Director Kandace Bender.
Not all of Virgin America's employees are in the Bay Area. The carrier uses reservations agents who work from their homes around the United States. Virgin America also augments its 20-person information technology team by outsourcing many of its IT needs to CSS Corp., a San Jose company that assigns work for Virgin America to employees in Chennai (formerly Madras), India.
"Virgin America is offering a very high-quality service at a cut-throat price," said CSS chief marketing officer Ajmal Noorani. "They need to keep their IT lean and mean."
CSS, a 10-year-old company, employs 45 people in San Jose, Noorani said. The firm has 5,000 workers worldwide and has offices in New York, Washington and Singapore, in addition to India. It is also setting up operations in Poland and Ireland, he said.
In 2004, Virgin America received nearly $13 million in job development funding from the Employment Training Panel, associated with the California Employment Development Department, to create Bay Area jobs, said Rayna Lehman, director of community services for the San Mateo County Central Labor Council.
Officials expected the company would use some of the money to retrain some of the thousands of Bay Area aviation industry workers laid off in the post-Sept. 11 U.S. airline meltdown, Lehman said.
"That was in 2004," she said. "It's 2007. From the labor point of view, a concerted effort is going to have to be made to track those people down."
E-mail David Armstrong at [email protected].
This article appeared on page C - 1 of the San Francisco Chronicle
Virgin America lands at SFO today
David Armstrong, Chronicle Staff Writer
Wednesday, August 8, 2007
sfgate_get_fprefs(); Startup airline Virgin America is scheduled to land its first planes today amid much hoopla, as passengers arrive at San Francisco International Airport from New York and Los Angeles.
The low-fare carrier, based in Burlingame, is beginning service with two flights per day out of SFO to New York and five to Los Angeles. It plans to begin service between SFO and Las Vegas, Boston and Washington in the coming months.
Among the glitterati expected to attend today's kickoff are Richard Branson, chairman of the Virgin Group; Virgin America Chief Executive Officer Fred Reid; San Francisco Mayor Gavin Newsom and possibly Gov. Arnold Schwarzenegger.
Virgin America set up skeletal office operations in 2004, promising to create excitement, jobs and an economic ripple effect in the Bay Area. It took three years, but funding finally fell into place, and the Transportation Department overcame questions about foreign ownership, signing off on Virgin America's flight plans.
Virgin America has already shown it can generate buzz. The fledgling carrier has held high-profile promotional events, enlisted members of the public to name its aircraft and imported celebrities associated with San Francisco, such as retired rock singer Grace Slick, to make appearances on its behalf.
The celebrity quotient will soar higher today, as Branson, founder of the Virgin Group, the London company that owns 25 percent of Virgin America and licenses the Virgin brand to Virgin America, jets into town. Newsom and Schwarzenegger lobbied Virgin America to set up its headquarters in the Bay Area. The governor talked up California to Branson and the state anted up nearly $13 million in job-training funds as inducements for the startup carrier to open its corporate headquarters here.
Virgin America has begun to fulfill its economic promise. But as a still-small startup, much of its commercial clout remains potential rather than actual.
Virgin America has hired about 500 of the estimated 3,000 to 5,000 employees it expects to eventually have on board, according to airline spokeswoman Abby Lunardini. About 100 of those employees are pilots and another 100 are flight attendants, she said. Most staffers are expected to be based in the Bay Area.
In July 2006, Virgin America - then attempting to secure government approval to begin service - commissioned a study that concluded it could save U.S. passengers $786 million a year with its lower airfares. The study, conducted by Campbell-Hill Aviation Group Inc., said Bay Area residents would gain the most, with $402 million in savings.
A separate study by the Bay Area Economic Forum released in November 2004 concluded that a domestic airline based at SFO and operating 70 flights per week could be expected to generate up to 3,891 jobs, 1,692 of which would be at the airport and 2,199 associated with the visitor industry.
An airline that size would generate about $241 million a year in business revenue, the study said. With 140 flights weekly, annual revenue would jump to $482 million.
Both SFO and the Mayor's Office of Economic and Workforce Development are using the forum numbers to gain a sense of the new airline's economic impact, according to Deputy Airport Director Kandace Bender.
Not all of Virgin America's employees are in the Bay Area. The carrier uses reservations agents who work from their homes around the United States. Virgin America also augments its 20-person information technology team by outsourcing many of its IT needs to CSS Corp., a San Jose company that assigns work for Virgin America to employees in Chennai (formerly Madras), India.
"Virgin America is offering a very high-quality service at a cut-throat price," said CSS chief marketing officer Ajmal Noorani. "They need to keep their IT lean and mean."
CSS, a 10-year-old company, employs 45 people in San Jose, Noorani said. The firm has 5,000 workers worldwide and has offices in New York, Washington and Singapore, in addition to India. It is also setting up operations in Poland and Ireland, he said.
In 2004, Virgin America received nearly $13 million in job development funding from the Employment Training Panel, associated with the California Employment Development Department, to create Bay Area jobs, said Rayna Lehman, director of community services for the San Mateo County Central Labor Council.
Officials expected the company would use some of the money to retrain some of the thousands of Bay Area aviation industry workers laid off in the post-Sept. 11 U.S. airline meltdown, Lehman said.
"That was in 2004," she said. "It's 2007. From the labor point of view, a concerted effort is going to have to be made to track those people down."
E-mail David Armstrong at [email protected].
This article appeared on page C - 1 of the San Francisco Chronicle
Blue Dude
Well-known member
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- 848
Funny you should mention that. I was number two for takeoff yesterday morning in JFK after the standard 45 minute taxi, running an hour late (recovering after the T-storm wrecked NYC air traffic). And ATC expedites VA's JFK-SFO flight to the head of the line after maybe a 3 minute taxi and he leaves. All 30 of us in line were WTFO and one guy actually spoke up. Controller said he was just following orders.
Turns out later it was their inaugural, a VIP flight: Sir Richard, press, etc. I suppose if you could make ATC look bad by further delaying a heavily publicized flight, you get the breaks.
freightdogfred
Malcontent
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- 990
I don't care if the friggin Pope was on board, that ain't right. This is the kinda shat that needs to be publicized.
Virgin America Finally Arrives
VIRGIN AMERICA FINALLY ARRIVES
Carrier has first flights to SFO, its home base
David Armstrong, Chronicle Staff Writer
Thursday, August 9, 2007
Richard Branson, chairman of the Virgin Group, played his rock star role to perfection Wednesday as the first flight of the nation's newest airline landed at San Francisco International Airport.
The British billionaire walked off Virgin America Flight 1 from New York - which arrived at 1:25 p.m., 15 minutes behind schedule because of bad weather back East - onto a long, scarlet carpet. He grinned broadly, gave a two-handed wave to hundreds of onlookers and bear-hugged San Francisco Mayor Gavin Newsom, who had shed his jacket and tie and rolled up his sleeves to welcome the airline to SFO, its home airport.
It didn't have the air of a typical business event. But then Branson - casually dressed and affable - is not your typical executive.
After three exhausting years of revving up, Virgin America - 25 percent owned by Branson - won the approval of US. regulators to begin flying as a low-cost carrier. The airline is starting small, with two flights a day to New York and five to Los Angeles from SFO. In the coming weeks, it will add service to Las Vegas and Washington.
Foreign citizens are barred from owning more than 25 percent of a U.S. airline or exercising operational control. Branson criticized those restrictions in an interview after the squad of teenage cheerleaders and the senior tap-dancing troupe brought in to celebrate the first flights had left SFO's glossy International Terminal.
"Protectionism is very dangerous, and it's very anti-consumer," Branson said.
"There are aspects of America that have become even more protectionist. We (the United Kingdom and the United States) can fight a war together, but British people are not able to come to America and set up a business. I find it archaic and bizarre. Any company should be able to go anywhere in the world, whatever business you're in."
Virgin America is an independent U.S. company, not a subsidiary of Virgin Group, stressed Fred Reid, the American CEO of Virgin America, based in Burlingame. Reid agreed to leave the airline - which licenses the Virgin name from Branson - as part of the deal to win approval from the Department of Transportation to begin flying. Regulators demanded his departure, insisting he was too close to Branson.
Before leaving, Reid will try to win approval to link the frequent-flier programs of Virgin America and London's Virgin Atlantic Airways, Branson's international carrier, Branson said.
In the financial and operational sense, "We have to be at arm's length," Branson said. "At the same time, getting a frequent-flier program between Virgin America and Virgin Atlantic makes sense."
Branson said the launch of Virgin America will promote the Virgin brand, which already adorns airlines in far-flung places such as Nigeria, Australia and Branson's native Britain. That in turn could make it more likely that Virgin Atlantic, which operates a daily flight between SFO and London Heathrow airport, will build enough business to begin a second daily flight on the route, he said.
"The advent of Virgin America will help take the Virgin brand in America from a reasonably well-known brand to a really well-known brand," Branson said.
Virgin America has hired about 500 employees and hopes to build a staff of as many as 5,000 in five years, many based in the Bay Area, Reid said.
"We have 33 firm orders for aircraft," Reid said, saying that advance orders for tickets are strong and prospects for long-term growth good. "We have options for 75 more planes."
"Five years ago, low-cost carriers like Southwest and JetBlue had 10 percent of the U.S. aviation market," Reid said. "Today, they have 35 percent. Americans have a clear preference for next-generation airlines."
SFO Airport Director John Martin noted that "2007 has been our year" when it comes to low-fare airlines. Just three months ago, SFO didn't have a big-name low-cost carrier. In May, JetBlue began flying from SFO, Virgin America has finally taken off and on Aug. 26, discount king Southwest Airlines will return to SFO with 18 daily flights.
"One has to believe they came because of Virgin America," Martin said. "It's great for consumers. Everyone is lowering fares, including major airlines that have been here for years."
E-mail David Armstrong at [email protected].
This article appeared on page C - 1 of the San Francisco Chronicle
VIRGIN AMERICA FINALLY ARRIVES
Carrier has first flights to SFO, its home base
David Armstrong, Chronicle Staff Writer
Thursday, August 9, 2007
Richard Branson, chairman of the Virgin Group, played his rock star role to perfection Wednesday as the first flight of the nation's newest airline landed at San Francisco International Airport.
The British billionaire walked off Virgin America Flight 1 from New York - which arrived at 1:25 p.m., 15 minutes behind schedule because of bad weather back East - onto a long, scarlet carpet. He grinned broadly, gave a two-handed wave to hundreds of onlookers and bear-hugged San Francisco Mayor Gavin Newsom, who had shed his jacket and tie and rolled up his sleeves to welcome the airline to SFO, its home airport.
It didn't have the air of a typical business event. But then Branson - casually dressed and affable - is not your typical executive.
After three exhausting years of revving up, Virgin America - 25 percent owned by Branson - won the approval of US. regulators to begin flying as a low-cost carrier. The airline is starting small, with two flights a day to New York and five to Los Angeles from SFO. In the coming weeks, it will add service to Las Vegas and Washington.
Foreign citizens are barred from owning more than 25 percent of a U.S. airline or exercising operational control. Branson criticized those restrictions in an interview after the squad of teenage cheerleaders and the senior tap-dancing troupe brought in to celebrate the first flights had left SFO's glossy International Terminal.
"Protectionism is very dangerous, and it's very anti-consumer," Branson said.
"There are aspects of America that have become even more protectionist. We (the United Kingdom and the United States) can fight a war together, but British people are not able to come to America and set up a business. I find it archaic and bizarre. Any company should be able to go anywhere in the world, whatever business you're in."
Virgin America is an independent U.S. company, not a subsidiary of Virgin Group, stressed Fred Reid, the American CEO of Virgin America, based in Burlingame. Reid agreed to leave the airline - which licenses the Virgin name from Branson - as part of the deal to win approval from the Department of Transportation to begin flying. Regulators demanded his departure, insisting he was too close to Branson.
Before leaving, Reid will try to win approval to link the frequent-flier programs of Virgin America and London's Virgin Atlantic Airways, Branson's international carrier, Branson said.
In the financial and operational sense, "We have to be at arm's length," Branson said. "At the same time, getting a frequent-flier program between Virgin America and Virgin Atlantic makes sense."
Branson said the launch of Virgin America will promote the Virgin brand, which already adorns airlines in far-flung places such as Nigeria, Australia and Branson's native Britain. That in turn could make it more likely that Virgin Atlantic, which operates a daily flight between SFO and London Heathrow airport, will build enough business to begin a second daily flight on the route, he said.
"The advent of Virgin America will help take the Virgin brand in America from a reasonably well-known brand to a really well-known brand," Branson said.
Virgin America has hired about 500 employees and hopes to build a staff of as many as 5,000 in five years, many based in the Bay Area, Reid said.
"We have 33 firm orders for aircraft," Reid said, saying that advance orders for tickets are strong and prospects for long-term growth good. "We have options for 75 more planes."
"Five years ago, low-cost carriers like Southwest and JetBlue had 10 percent of the U.S. aviation market," Reid said. "Today, they have 35 percent. Americans have a clear preference for next-generation airlines."
SFO Airport Director John Martin noted that "2007 has been our year" when it comes to low-fare airlines. Just three months ago, SFO didn't have a big-name low-cost carrier. In May, JetBlue began flying from SFO, Virgin America has finally taken off and on Aug. 26, discount king Southwest Airlines will return to SFO with 18 daily flights.
"One has to believe they came because of Virgin America," Martin said. "It's great for consumers. Everyone is lowering fares, including major airlines that have been here for years."
E-mail David Armstrong at [email protected].
This article appeared on page C - 1 of the San Francisco Chronicle
The Victors
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SDF2BUF2MCO
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That reminds of a quote from Bobby Knight when he was still at IU and they played LSU. IU beat LSU but they had to come from behind. The reporter asked when did Knight know he could win the game? Knight replied, when I looked down at the LSU bench and saw Dale Brown.
Anyway, I wonder if Virgin America will be like soccer in the US? Yes it is here but it never really caught on.
AA717driver
A simpler time...
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That was Coach Knight in his prime. Ugly game, though.
IU still hasn't recovered...
(That's why my daughter is going to ASU!) TC
macdu
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TWA carried the Pope for a long time and was given every courtesy as the Papal(sp) aircraft flew around the world with the Pope on board. I am not Catholic, but the Pope deserves to go to the front of the line, and, get expedited handling at every turn, sorry. Publicize that all you want.
The Victors
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BLUE BAYOU
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I don't believe Sir Richard Branson is Papal in any way, other than he thinks he's a God in aviation/space pioneering. I saw a special on H channel about Howard Hughes, now that guy did a lot for aviation and was a "pioneer"-- but look how he ended up... If the American New Yorker in the tower had any cahunas, he should have told him to go to the end of the line like everyone else. Even with their "special" handling, they were still 30 minutes late in SFO...
Whataburger
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Going2Baja
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