Virgin USA

[storminpilot]

http://www.ajc.com/wednesday/content/epaper/editions/wednesday/business_f38a1957114420e100f1.html

Briton seeks partner for low-cost U.S. airline
Bloomberg News -- Wednesday, November 5, 2003

Richard Branson, a flamboyant British billionaire and entrepreneur, said Virgin Group Ltd. and its partners may invest about $200 million to set up a low-cost airline in the United States next year.

Branson, whose Virgin Group would own 49 percent of the carrier and hold 25 percent of voting rights, is in talks with ''three or four'' possible airline and venture capital partners to own the other 51 percent, he told a London news conference.

''We haven't definitely decided which way we are going yet,'' he said. ''Some partners would bring in slots at key airports. Some would bring in money.''

Branson said he plans to continue discussions in New York.

Virgin Group is the parent of Virgin Atlantic Airways, which Branson founded.

The new carrier --- currently known as Virgin US --- will copy the model used by JetBlue Airways and Southwest Airlines. It won't compete on the same routes as those airlines.

Low-cost carriers have been generating profits, while full-service airlines have suffered losses following a decline in air travel.

Virgin USA's offices are in New York, and Frances Farrow has been appointed acting chief executive, Branson told the news conference at Heathrow Airport. Farrow has been general counsel for Virgin Atlantic Airways.

Branson said he's still in talks with Boeing and Airbus about which aircraft to purchase.

Branson's British airline, Virgin Atlantic, has been successful as a niche player on trans-Atlantic routes.

Branson said traffic is beginning to recover at Virgin Atlantic, the No. 2 full-service carrier in the United Kingdom. It is 51 percent owned by Virgin and 49 percent owned by Singapore Airlines Ltd.

''We are confident that there's a recovery taking place,'' Branson said in an interview. ''It hasn't meant airline prices have gone up.'' Branson said Virgin Atlantic is winning first- and business-class customers from competitor British Airways PLC and gaining market share from U.S. carriers.

Branson said he expects to decide early next year between Boeing 777s and Airbus A340-600s as he seeks to expand the Virgin Atlantic fleet.

 

[General Lee]

Interesting, and Richard Branson does have the money to bring that dream to fruition---but he will learn quickly that there are already too many LCCs in the US, and much more competition all around. His Australian LCC---Virgin Blue---has done well because one of the two large Australian airlines--Ansett--went Chap 7. That left Qantas the whole country---and the fares were high. That has helped Virgin Blue grow, and hurt Qantas in the process. In the US---there already are a lot of LCCs---which will give him competition like he is getting in Europe with Virgin Express----which isn't doing very well. He also thinks he can get plenty of slots at US airports----???? He would have to buy out other airlines with them, and I don't think even ACA has that many in the high density NE markets---maybe 12 at LGA? None at DCA.(right?)

It will be interesting to watch.

Bye Bye--General Lee

 

[JohnDoe]

If this cabatoge bill passes in the senate, in a couple of years he may not even need partners...just bring his own company into the country and fly around.

Contact your senators to vote no on the cabatoge.

 

[storminpilot]

Gen. Lee maybe Branson is assuming USAirways is faltering and he smells "blood" or opportunity.

 

[Heavy Set]

From what I understand, Virgin Atlantic pilots are neither paid well nor respected by Virgin's management. I suppose USAirways guys would be use to that treatment by now...

I am sure Branson would not find the labor situation here appealing - and I think he prefers to start from scratch so that he can mold the culture... He would probably force USAirways into a pre-packaged bankruptcy and then buy the slots, gates and select pieces of the company - and then rehire employees who demonstrate his desired culture...

 

[Tim47SIP]

ACA?

If I were a betting person, I would have to go with ACA as they are in the best position and ready to take on this task. They will be announcing a narrowbody order fairly soon and there were reports that Branson was at their HQ's several weeks ago. Isn't Branson and ACA's CEO good freinds? (Could be wrong on that one though); Just a hunch.

 

[AA717driver]

After his experience with Virgin Express, he said he would start from scratch. Many individuals hold slots and gates as collateral for loans. He wouldn't need to get a whole airline--just bankruptcy court approval...TC

 

[calfo]

I'm sure Frank Lorenzo would lock arms with him to go into business...