US domestic low-cost venture set to begin operations in mid-2005 with fleet of at least 33 Airbus A320s

Richard Branson's US domestic low-cost venture will operate a fleet of at least 33 aircraft from the Airbus A320 family, and holds options on a further 72.

The airline, now officially named Virgin America, will take delivery of the first aircraft early next year, indicating a mid-2005 launch, says chief executive Frederick Reid. Its corporate offices are in New York and the carrier will have its operational headquarters in San Francisco (Flight International, 15-21 June).

Of the firm orders, 15 A320s will be leased from GE Capital Aviation Services (GECAS). The remaining firm fleet consists of 11 A319s and a further seven A320s. All the aircraft will be CFM International CFM56-5B-powered.

Virgin America has not applied for its air operator's certificate, waiting instead until it has a "highly adequate" amount of equity before approaching the US Department of Transportation (DoT) for operating rights.

"The goal is to be well capitalised; we know it is a rough market," says Reid. Although he declines to be specific, he says that "we want a highly adequate capital base, and I know the DoT will also be looking at how much we have".

The airline's citizenship will be solidly compliant with current US ownership restrictions, according to Reid. "This airline will be very much 'born in the USA', despite its illustrious foreign investor.

"By that, I mean an ownership structure that includes US majority equity investors with 75% voting rights, fully consistent with US laws, and run by a US management team," he adds.

Branson for several years has lobbied the US government to relax its foreign ownership restrictions from 24.9% of a domestic carrier's voting stock and 49.9% of its total equity. However, despite support from the current White House administration, this appears unlikely for at least another year.



Source: Flight International