Virgin buys 18 Airbus

[lowecur]

With option for 87 more. Can't wait to see the schedule Fred will come up with. Planes are due for delivery in early 2005. Wonder how he got those early Mfg slots?

UPDATE 1-Virgin America picks Airbus for new fleet
Tue Jun 15, 2004 02:28 PM ET

WASHINGTON, June 15 (Reuters) - Virgin America, a new U.S. discount airline backed by British entrepreneur Richard Branson, plans to acquire or lease up to 105 single-aisle Airbus planes, the airline's chairman, Fred Reid, said on Tuesday.


The company plans to take delivery of some of the first 18 new aircraft from Airbus' A320 family in early 2005, he told an industry luncheon. The first batch includes 11 A319 planes and seven A320.

Reid said 15 new A320s would be leased from GE Capital Aviation Services and the deal with EADS' Airbus (EAD.PA: Quote, Profile, Research) (EAD.DE: Quote, Profile, Research) affiliate also contains options to buy up to 72 additional passenger planes, Reid said.

The deal was seen as a blow to Boeing Co. (BA.N: Quote, Profile, Research) , which was said to have been trying to sell its single-aisle 737 planes to Virgin America. "While we had very compelling proposals from two world-class aircraft manufacturers, we are pleased with the favorable economic terms we achieved," Reid said.

 

[Flying the Line]

I Can't wait for this.

Foreign Owner.

Foreign built Aircraft.

Dare I say it. Foreign Pilots?

At least another industry leading "contract"
Leading the on the downside.

Hey Mr. Branson - If you want to continue to play with airlines why don't you build some more on VS.

 

[lowecur]

Since they don't have their ownership in place, they can't even apply for an operating certificate. How long does it take to get an operating certificate approved, and just how quickly can they be up and running once they do? The first part of 2005 seems next to impossible.

Virgin Atlantic apparently just signed a unilateral code share with AWA. Why the hell would AWA consumate such a deal if Virgin USA plans on being a viable airline next year?

 

[FlyDouglasJets]

Expect to see, Virgin Yankee Doodle, flying those A320/319s to places that Virgin Atlantic already flies to:
SFO-EWR
SFO-LAX
SFO-MCO
SFO-MIA
SFO-BOS
SFO-IAD
SFO-LAS

It's all very clear, skim from certain O&D markets at SFO.

 

[lowecur]

Expect to see, Virgin Yankee Doodle, flying those A320/319s to places that Virgin Atlantic already flies to:
SFO-EWR
SFO-LAX
SFO-MCO
SFO-MIA
SFO-BOS
SFO-IAD
SFO-LAS

It's all very clear, skim from certain O&D markets at SFO.

Reid was quoted on 6/9 as saying the first flight will be from NY early next year. I would guess that means JFK. I just don't see them doing those transcons to markets they already serve. Since London is their hub, all of those cities mentioned would not benefit from international pax transfer. Instead I see them beginning a network to cities not served by Virgin Atlantic. Since SFO will be the hub, you may see them go after a carrier with little LCC competition ie: Alaska or NWA.

 

[storminpilot]

http://biz.yahoo.com/ap/040615/virgin_america_airbus_4.html




Associated Press
Virgin America to Fly Airbus Planes
Tuesday June 15, 5:40 pm ET
By Brad Foss, AP Business Writer Virgin Group's New Low-Fare Airline, Virgin America, Agrees to Buy, Lease Up to 105 Airbus Jets

WASHINGTON (AP) -- The Virgin Group Ltd.'s new U.S.-based low-fare airline announced Tuesday that it has agreed to buy and lease up to 105 narrow-body jets from Airbus SAS and that the carrier would be named Virgin America.

[size=-2][/size]Virgin America's top executive, Frederick W. Reid, said at an industry luncheon in Washington that the airline has placed a firm order to buy 11 A319s and seven A320s from the France-based manufacturer, to be delivered early in 2005. The carrier will lease 15 more A320s from GE Capital Aviation Services, a unit of General Electric Co.

The A319s typically carry 124 passengers, while the A320s carry about 150 passengers, according to Airbus.

Reid, the former president of Delta Air Lines, would not put a price tag on the deal, although the firm order for 18 planes would be worth about $1 billion based on catalog prices. However, airlines typically negotiate discounts from airplane manufacturers.

Analysts said Virgin Group's decision to go with Airbus -- and not Boeing Co., its chief rival -- was not entirely surprising, noting that the French aircraft manufacturer has become very aggressive with its pricing. They estimated that Airbus likely discounted its planes to Virgin America by 20 percent or more.

While the founder and chairman of Virgin Group, Sir Richard Branson of Britain, will be a minority shareholder in the airline, Virgin America still needs to raise significant capital from domestic investors before it seeks authority from the Federal Aviation Administration to begin flying in mid-2005.

U.S. law forbids foreigners from owning more than 49 percent of the equity or 24.9 percent of the voting power of a domestic carrier. Virgin America has yet to identify who its U.S.-based investors will be.

Reid said the airline does not have agreements with other Virgin Group entities, which include entertainment and telecommunications companies, although he did not rule out that possibility.

"This airline intends to be utterly consumer-driven, market-responsive, offering high value for low fares," Reid said, adding that he believes Virgin America's target customers "might be ready to trade up."

Some analysts interpreted Reid's comments to mean that Virgin America might try to differentiate itself from other low-cost carriers by focusing more heavily on business travelers, who typically are willing to pay more than leisure travelers, if the service is good.

"It's probably not an unwise strategy," said Daniel Kasper, managing director and head of the transportation practice at LECG in Cambridge, Mass., noting that AirTran Airways Inc. has done well with its limited business-class seating and that JetBlue Airways Corp. has been able to charge a premium because of its reputation for good service.

Virgin America's planned entry into the U.S. market comes as budget carriers such as Southwest, JetBlue and AirTran are growing, while traditional carriers such as AMR Corp.'s American Airlines and Continental Airlines Inc. are struggling.

UAL Corp.'s United Airlines is reorganizing in Chapter 11, while Delta Air Lines Inc., the nation's third-largest airline, has said it might need to reorganize under the protection of a bankruptcy court if it is unable to reduce pilots' wages.

Still, Kasper said Virgin America will face serious challenges because "the low-cost space is getting pretty full", with AirTran, JetBlue, America West Airways Inc., Southwest Airlines and, beginning Wednesday, Independence Air, all vying for budget-minded travelers on transcontinental routes.

Virgin America has said its operations will be based in San Francisco and its corporate headquarters is in New York.

Reid said Tuesday he was not ready to speak about routes Virgin America plans to fly, other than New York to San Francisco.

Virgin Group, which owns international carrier Virgin Atlantic Airways, also runs two other low-fare airlines -- Virgin Express in Europe and Virgin Blue in Australia. Reid also said Virgin America would create 3,000 new jobs in the United States

 

[FlyDouglasJets]

Reid was quoted on 6/9 as saying the first flight will be from NY early next year. I would guess that means JFK. I just don't see them doing those transcons to markets they already serve. Since London is their hub, all of those cities mentioned would not benefit from international pax transfer. Instead I see them beginning a network to cities not served by Virgin Atlantic. Since SFO will be the hub, you may see them go after a carrier with little LCC competition ie: Alaska or NWA.

Its not about hubbing for these LCC's like JBU. It's finding lucrative O&D markets and skimming off the good stuff.
SFO was a sitting duck, as it has very good yields and little LCC competition (sans SWA across the bay).

 

[jetblue320]

Its not about hubbing for these LCC's like JBU. It's finding lucrative O&D markets and skimming off the good stuff.
SFO was a sitting duck, as it has very good yields and little LCC competition (sans SWA across the bay).

FWIW, JB doesn't hub out of JFK, it's 95% O&D. It just so happens that JFK is the "O" on about half of our flights and its the "D" on a bunch too.

C yaaa

 

[FlyDouglasJets]

FWIW, JB doesn't hub out of JFK, it's 95% O&D. It just so happens that JFK is the "O" on about half of our flights and its the "D" on a bunch too.

C yaaa

Yes, indeed. The largest market in the US, O&D, its a great concept. Hubs are becoming more burdensome vs. the benefits.
Maybe having a few focus cities that can serve a few of these:
http://r2ainc.com/top_us_markets.htm

 

[shon7]

What is "O & D"??

 

[FLYLOW22]

What is "O & D"??

Originating and Deplaning passengers meaning that they live there so the airline doesn't have to work to get those people to the hub with express flights. It also mean that the airline gouges the hell out of those people with higher prices than at the outstations.

 

[Lear70]

Since they don't have their ownership in place, they can't even apply for an operating certificate. How long does it take to get an operating certificate approved, and just how quickly can they be up and running once they do? The first part of 2005 seems next to impossible.

Virgin Atlantic apparently just signed a unilateral code share with AWA. Why the hell would AWA consumate such a deal if Virgin USA plans on being a viable airline next year?

Why start up a completely new Ops Cert? Especially when there are a dozen out there to be had on the cheap these days? Branson wouldn't put the word out there unless he really believed he could accomplish that goal; more than likely he had everything in place months ago, including the Certificate.

 

[TriJet]

I Can't wait for this.

Foreign Owner.

Foreign built Aircraft.

Dare I say it. Foreign Pilots?

At least another industry leading "contract"
Leading the on the downside.

Hey Mr. Branson - If you want to continue to play with airlines why don't you build some more on VS.

U.S. tax

 

[balls deep340]

How can I apply for a job there. Sorry I have no alternative - you see I'm a slave to a legacy airline and need to be set free at any cost!

 

[sstearns2]

Actually it's more that US taxes. It's Euro airframe with US engines being financed by a US company. Lot's of money is still coming over here from this deal.

Scott

 

[TriJet]

Actually it's more that US taxes. It's Euro airframe with US engines being financed by a US company. Lot's of money is still coming over here from this deal.

Scott

not to mention all the AMERICAN pilots they will have to hire.

Why would anyone gives a sh!t who owns it?

It will provide the much needed jobs for the furloughed people.

Stop b!tchin' and get on with that application.

 

[Obi-Wan]

How and where do you apply?

 

[flynryan15]

Great

Let me get this straight!

1. A foriegn owned carrier? From a country that won't give our legacy's rights to Heathrow.

2. Airplanes from a country that protest us and spitts on the graves and monuements to the American Soldiers who died so they won't be speaking German. Costing orders from Boeing intern costing more American Families work.

3. But hey great it will create a few more flying jobs at sub-par wages and possibly drive a Major airline out of business eliminating Good paying jobs.

The sad part is we Pilots will be burning up the fax machines sending the resumes in.

 

[TriJet]

Yo Ryan!!

You are quite the Patriot.

 

[flynryan15]

Trijet

Hell yeah I am!!!!!!!