Virgin Atlantic Airways threw down the gauntlet to arch-rival British Airways last week, unveiling plans to "double in size" over the next five years by acquiring up to 26 Airbus A340-600s.

Virgin Atlantic chairman Sir Richard Branson says the selection followed a "ferocious battle" between Airbus and Boeing, with the latter offering its 777 in a bid to unseat the A340-600. Virgin already operates seven A340-600s and has five on order from earlier deals.

The new deal covers 13 firm orders worth $5.5 billion for delivery between 2006 and 2008, and 13 options that will follow the firm orders. "This order will enable us to double the airline size over the next five years," says Branson, adding that his ambition is to eventually compete with BA on "every one of its profitable long-haul routes".

Branson says the expansion will bring South America into the airline's scope, with Argentina and Brazil being target destinations, as well as the Middle East, where Dubai is being considered.

He describes the Airbus deal as "terrific". Industry sources claim the manufacturer is providing a major contribution to the financing. Virgin Atlantic chief executive Steve Ridgway confirms Airbus is assisting with the financing, and deliveries are structured to provide flexibility to accelerate or limit the airline's future capacity growth as required.

Ridgway says the first batch of around five aircraft will be the current production standard version of the -600, with the rest being taken as the high-weight, longer-range variant.

Branson says most of the order is for expansion, but could involve a "small trade-in" of A340-300s. He adds the recent decision to delay introducing the A380 to late 2008 "enables us to bring in some of the new aircraft a little earlier".

Branson confirms that Greenbriar Equity Group - the US investment company co-founded by former United Airlines chairman Gerald Greenwald - could be one of the lead investors in Virgin America.

Source: Flight International