Tuesday, May 25, 2004 Posted: 1039 GMT (1839 HKT)
NEW YORK (Reuters) — British entrepreneur Richard Branson said the Virgin USA start-up airline, which is tentatively set to launch sometime next year, has narrowed its choices for a home city to San Francisco or New York.
Speaking at an entrepreneurs’ summit, Branson said the carrier, which does not yet have a name, route structure or airplanes, was considering buying aircraft from Boeing or Airbus.
“I can’t at this stage confirm whether it’s going to be Airbus or Boeing … I think the airline is going to need about 50 planes,” he said.
The United States currently restricts foreign ownership of U.S. airlines, allowing a maximum 25 percent voting stake and 49 percent total equity. Some industry experts have expressed concern about how Branson plans to deal with the restrictions and whether he would truly cede control.
Fred Reid, former president of Delta Air Lines, is spearheading the Virgin USA start-up from New York and is said to be busy trying to line up investors.
“We will not own the airline,” Branson said in response to a question about the ownership laws. “It will be owned by American companies, and American companies will run the airline. We will have a stake in the airline — we will license the Virgin brand to it.”
Last month, sources familiar with the matter told Reuters that Virgin USA executives told Boeing Commercial Airplanes executives in Seattle they were out of the running for the airplane order, although they cautioned that jet deals often change up to the last minute.
The Virgin order would likely be the largest order from the United States this year, as most American carriers remain mired in a deep financial downturn and are not thinking about buying planes but rather just trying to make money.
Airbus, based in Toulouse, France, is 80-percent owned by the European Aeronautic Defence and Space Co. NV, with the remaining 20 percent held by British aerospace and defense industries group BAE Systems plc.
Boeing out of the running? How dare you Sir Richard! 😡
By: Airline owner - 29th May 2004 at 09:20
if i was in his shoes which im obviously not I’d start from SFO as there is not as much competition from JFK and JetBlue
By: greekdude1 - 29th May 2004 at 00:43
Interesting stuff, I misinterpreted your after taxes point to mean without taxes in my zest for an arument 😉
Hey, no problem! 😉 Makes the forum a little more interesting.
Another poor assumption of mine was the actual length of flights that jetBlue operated, 5 hours would be considered Intercontinental over here, most certainly not domestic!
Indeed, Jetblue offers several coast to coast flights from both JFK and LGB. However, they operate smaller sectors, as well. I was just using that one to compare 2 particular routes served. Ironically, AA started flying between Long Beach and JFK, ONLY AFTER Jetblue established their LGB hub and initiated 6 daily roundtrips between it and their main hub, JFK.
By: Mark L - 28th May 2004 at 22:27
Interesting stuff, I misinterpreted your after taxes point to mean without taxes in my zest for an arument 😉
Another poor assumption of mine was the actual length of flights that jetBlue operated, 5 hours would be considered Intercontinental over here, most certainly not domestic!
By: greekdude1 - 28th May 2004 at 21:06
£40 round trip minus taxes for a flight in the states is not pretty spectacular for a LoCo, when 2p round trips minus taxes is becoming more and more commonplace over in the EU.
That $75 I mentioned is including taxes, Mark, not minus. I don’t care what country you live in, that’s cheap! I’ve seen those 2p round trip fares you’re talking about on RyanAir. By the time you factor in all the taxes, it comes out to like 30quid, round trip. Very little difference between that and 75 bucks.
At the moment there is little distinction between say JetBlue and AA, except JetBlue offer in flight entertainment.
Ok, lets take a look at a particular route that they both serve, LGB-JFK. That’s a 5 hours flight. On AA, you will get fed a meal, and believe it or not, there will be IFE in the form of a movie plus some other programing before and after. On Jetblue, you will get the PTV’s, however no meal. Just blue tortilla chips on a 5 hour+ flight. Now you tell me the difference? As soon as AA starts giving out just pretzels on flights of that length, then I’ll agree that there is little difference between the two.
Hold on! Aren’t Jetblue supposed to be the LoCo here?
Indeed they are! See above paragraph.
By: Mark L - 28th May 2004 at 20:35
£40 round trip minus taxes for a flight in the states is not pretty spectacular for a LoCo, when 2p round trips minus taxes is becoming more and more commonplace over in the EU.
Yes Southwest and Jetblue are pretty revolutionary in the states, but the EU LoCos have sunk their cost bases to a new lower level considerably below what you guys consider “cheap” and despite what most industry analysts and those others involved in the industry might want, the USA could just as easily get an “Ryanair vs Easyjet” fareware taking place that would seriously lower your LoCo prices.
At the moment there is little distinction between say JetBlue and AA, except JetBlue offer in flight entertainment. Hold on! Aren’t Jetblue supposed to be the LoCo here?
By: tenthije - 28th May 2004 at 20:14
Last month, sources familiar with the matter told Reuters that Virgin USA executives told Boeing Commercial Airplanes executives in Seattle they were out of the running for the airplane order….
+
although they cautioned that jet deals often change up to the last minute
=
The order is still open to anyone offering a good deal.
By: Hand87_5 - 28th May 2004 at 19:44
There is one think I can tell. I flew both Loco in the US (JetBlue) and in the UK (FR) and it’s hard to say that the share the same concept.
The respect of the customer is way higher with JetBlue. In fact you don’t feel much difference flying JetBlue and AA or UA.
FR concept could be resumes as : “Screw the customer as much as you can” . I won’t hesitate to fly JetbBLue again , I will fly FR only if I have no other option.
By: greekdude1 - 28th May 2004 at 19:24
Perhaps proper LoCo wasn’t the best description, but even the basic Southwest Fares are extortinate for the service offered!
It all depends. You get your fare far enough in advance, and you can fly for as little as $75 roundtrip, after taxes. That’s how it usually works with everybody, right? Certain amount of seats available at a certain price. As those get sold, then you have to purchase the higher priced seat.
Like I said our flag carriers over here offer similar basic fares, and all the frills.
Yeah, so? Our flag carriers do too. In fact, we even have quasi Low-frills/flag carriers where you have the low-fare structure airline like TED, but you still get all the FF perks/lounge access, etc. of the big boys. What a concept!
By: Mark L - 28th May 2004 at 19:15
Perhaps proper LoCo wasn’t the best description, but even the basic Southwest Fares are extortinate for the service offered! Like I said our flag carriers over here offer similar basic fares, and all the frills.
By: greekdude1 - 28th May 2004 at 15:48
the USA needs a proper LoCo I think. Airlines such as Southwest and JetBlues basic fares are very similar to the basic fares of our flag carriers in Europe.
This is completely false. If Southwest isn’t a proper loco, then there is no such thing.
By: davforr - 28th May 2004 at 14:23
He is sure to stir up the competition knowing how he operates
it can only be good the the airline industry in the USA
By: Hand87_5 - 28th May 2004 at 11:18
SFO makes more sense since there is no LoCo based there. Even id SouthWest flies from OAK , they are not that big in northern California.
By: Mark L - 28th May 2004 at 10:10
I say good luck to him, the USA needs a proper LoCo I think. Airlines such as Southwest and JetBlues basic fares are very similar to the basic fares of our flag carriers in Europe.
By: bmi-star - 28th May 2004 at 08:08
Mmm, if he would start in NYC he would have some tuff competition from jetBlue, i would go for SFO if I was him
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May 28, 2004 at 1:21 am