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http://www.insidebayarea.com/sanmateocountytimes/localnews/ci_2532205
Article Last Updated: 1/21/2005 03:03 AM
Airline may delay service until 2006
Virgin working to raise the capital it needs
By Tim SimmersBUSINESS WRITER, STAFF WRITER
Inside Bay Area BURLINGAME — Fledgling low-cost airline Virgin America, which picked the Peninsula last year for its operations headquarters, may have to delay its launch until 2006, a spokeswoman for the airline said Thursday.
The startup carrier, backed by British billionaire entrepreneur Richard Branson, had said last year that it planned to begin service by mid-2005 and start hiring 1,500 workers on the Peninsula this spring.
The airline is still working to raise the capital to take off.
"We're still hoping to launch in 2005, but it could be 2006," said Stacy Geagan, a spokeswoman for the airline.
Virgin America has opened a temporary office along Bayshore Boulevard in Burlingame with 12 employees, and is working to file an application with the Department of Transportation to get a domestic operating permit.
Reports in the summer that the airline had leased space in the Forbes Building in Burlingame for an operations headquarters were premature, Geagan said.
The new discount airline's corporate headquarters will be in New York, but the heart of its operations will be on the Peninsula.
Virgin America's Senior Vice President of Flight Operations, Robert Weatherly, stressed that Virgin is delighted about growth prospects in travel and tourism, especially in California and San Mateo County. He also noted that he is well aware of the "painful state of finance and employment in the industry."
"But we are well into the equity process," Weatherly said, speaking to the annual meeting of the San Mateo County Convention and Visitors Bureau. He gave no details of financing.
He added that Virgin is "working tirelessly" to produce what the market wants a new generation airline, with new planes, attractive prices and high-quality services.
"We are moving forward with the development of our airline, and we're increasingly excited about the opportunities," said Weatherly. "We're committed to driving substantial economic benefits to the Bay Area."
The airline plans to start here with a staff of 100 workers once it gets financing and an operations permit, and move up to 1,500 local workers over five years, Geagan said. Earlier reports said that Virgin would hire 1,500 workers by 2007.
The company is seeking financing of between $200 million and $400 million to get off the ground, analysts say. U.S. law says that because Branson is not a U.S. citizen, he cannot own more than 49 percent of the airline or control more than 25 percent of its voting stock.
"It's difficult to get financing in one sense, because the industry news is so bad," said Phil Roberts, principal at Unisys R2A, an Oakland airline consulting group. "Investors not sophisticated about the industry are hesitant."
Roberts believes 2006 will be the soonest Virgin America can launch.
"It takes a year or a year and a half to get an operations permit," said Roberts. "They've got a lot of opposition from U.S. Airlines. (Those airlines) will allege that Virgin will be controlled by a foreign individual."
The flamboyant Branson was behind Virgin Records, Virgin Mobile and Virgin Atlantic Airlines.
Roberts said Virgin America is being responsible by not talking much about a take-off date.
"You don't want to trumpet an airline if it's not financed yet," he said.
Weatherly also said later this year the airline will be "proud owners of the very latest" in aircraft.
Virgin America is buying a fleet of Airbus A319 and A320 aircraft that it plans to fly out of San Francisco International.
He also noted that Virgin will tap into "the Bay Area's vast pool" of talented professionals when it begins ramping up its hiring. But he didn't say when that would be.
Tim Simmers can be reached at (650) 348-4361 or [email protected].
Article Last Updated: 1/21/2005 03:03 AM
Airline may delay service until 2006
Virgin working to raise the capital it needs
By Tim SimmersBUSINESS WRITER, STAFF WRITER
Inside Bay Area BURLINGAME — Fledgling low-cost airline Virgin America, which picked the Peninsula last year for its operations headquarters, may have to delay its launch until 2006, a spokeswoman for the airline said Thursday.
The startup carrier, backed by British billionaire entrepreneur Richard Branson, had said last year that it planned to begin service by mid-2005 and start hiring 1,500 workers on the Peninsula this spring.
The airline is still working to raise the capital to take off.
"We're still hoping to launch in 2005, but it could be 2006," said Stacy Geagan, a spokeswoman for the airline.
Virgin America has opened a temporary office along Bayshore Boulevard in Burlingame with 12 employees, and is working to file an application with the Department of Transportation to get a domestic operating permit.
Reports in the summer that the airline had leased space in the Forbes Building in Burlingame for an operations headquarters were premature, Geagan said.
The new discount airline's corporate headquarters will be in New York, but the heart of its operations will be on the Peninsula.
Virgin America's Senior Vice President of Flight Operations, Robert Weatherly, stressed that Virgin is delighted about growth prospects in travel and tourism, especially in California and San Mateo County. He also noted that he is well aware of the "painful state of finance and employment in the industry."
"But we are well into the equity process," Weatherly said, speaking to the annual meeting of the San Mateo County Convention and Visitors Bureau. He gave no details of financing.
He added that Virgin is "working tirelessly" to produce what the market wants a new generation airline, with new planes, attractive prices and high-quality services.
"We are moving forward with the development of our airline, and we're increasingly excited about the opportunities," said Weatherly. "We're committed to driving substantial economic benefits to the Bay Area."
The airline plans to start here with a staff of 100 workers once it gets financing and an operations permit, and move up to 1,500 local workers over five years, Geagan said. Earlier reports said that Virgin would hire 1,500 workers by 2007.
The company is seeking financing of between $200 million and $400 million to get off the ground, analysts say. U.S. law says that because Branson is not a U.S. citizen, he cannot own more than 49 percent of the airline or control more than 25 percent of its voting stock.
"It's difficult to get financing in one sense, because the industry news is so bad," said Phil Roberts, principal at Unisys R2A, an Oakland airline consulting group. "Investors not sophisticated about the industry are hesitant."
Roberts believes 2006 will be the soonest Virgin America can launch.
"It takes a year or a year and a half to get an operations permit," said Roberts. "They've got a lot of opposition from U.S. Airlines. (Those airlines) will allege that Virgin will be controlled by a foreign individual."
The flamboyant Branson was behind Virgin Records, Virgin Mobile and Virgin Atlantic Airlines.
Roberts said Virgin America is being responsible by not talking much about a take-off date.
"You don't want to trumpet an airline if it's not financed yet," he said.
Weatherly also said later this year the airline will be "proud owners of the very latest" in aircraft.
Virgin America is buying a fleet of Airbus A319 and A320 aircraft that it plans to fly out of San Francisco International.
He also noted that Virgin will tap into "the Bay Area's vast pool" of talented professionals when it begins ramping up its hiring. But he didn't say when that would be.
Tim Simmers can be reached at (650) 348-4361 or [email protected].
Last edited:
TC
