Virgin Group chairman Sir Richard Branson expects long-held ambitions to add a US arm to his global airline empire to become a reality next year as he finalises ownership, fleet and slot issues.

A New York-based team headed by the former Virgin Atlantic chief financial officer Frances Farrow is developing the start-up plan for the low-fare airline under the working title "Virgin USA". The airline will operate an initial fleet of up to 12 Airbus A320s or Boeing 737s, for which a deal is being negotiated (Flight International, 11-17 November). Routes and bases have not been revealed, although Branson says the airline will not compete directly with JetBlue or Southwest Airlines.

The original plan had called for a launch before the end of 2003, but this was postponed "after we had a couple of approaches from airlines who came to us with slots", says Branson.

The new airline will require capital of a "couple of hundred million dollars" to launch, says Branson, with Virgin holding the maximum 49% shareholding and 25% voting rights permitted by US regulations. "We'd increase this to 49% if rules eventually allow," he says.

Branson adds that discussions are well under way with "three or four" investment partners, with candidates including both venture capitalists and airlines holding slots. "Investment levels are currently being negotiated," he says.

Meanwhile, Virgin Atlantic is looking to expand services in 2004 to a number of leisure destinations, as it expands its Virgin Holidays business. Branson is hopeful that the airline will get rights to serve Australia via Hong Kong by mid- 2004, and plans to hold discussions with the authorities at the end of November. Other new destinations being evaluated include routes to Cuba, Jamaica, Mauritius and the Seychelles. The airline is also looking to increase services to India, which it already serves through Delhi three times a week, while Dubai is among new destinations being studied for 2005

Source: Flight International