Virgin starts US loco airline in June 04
Jul 16, 2003, 12:09 pm
#1
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Virgin starts US loco airline in June 04
http://biz.yahoo.com/rc/030716/airlines_virgin_3.html
Reuters
UPDATE - UK's Branson plans budget U.S. airline
Wednesday July 16, 9:44 am ET
By Daniel Morrissey
(Adds size of planned fleet, Virgin Blue float plans)
LONDON, July 16 (Reuters) - Virgin Group Chairman Richard Branson announced plans on Wednesday to set up a "quality low-cost" airline in the United States by the end of June 2004 to rival JetBlue (NasdaqNM:JBLU - News) and Southwest (NYSE:LUV - News).
"We are planning to get in there and make sure there is a third, very powerful low-cost airline in America," Branson said. Virgin would own under 50 percent to meet U.S. aviation laws.
He also forecast that Australian discount carrier Virgin Blue (Australia:PRK.AX - News) would float in October or November and he saw a pick-up in the London-U.S. market for first-class and business-class passengers after the worst downturn in years.
"The premium traffic is coming back. SARS is behind us, the recession is beginning to be behind us and there is a lot more activity out there," he said. "The Gulf War is also behind us."
Branson made the comments at the unveiling of a new premium class service for transatlantic carrier Virgin Atlantic. He said the ticket, including the industry's most spacious beds, could attract five percent of business-class and 12 percent of first-class travellers from arch rival British Airways (London:BAY.L - News).
The service will be launched after the summer, coinciding with BA's withdrawal of its fleet of Concorde luxury supersonic aircraft. Branson dressed up as the lead character from horror movie The Texas Chainsaw Massacre to chop through a BA seat.
Branson, whose interests span music, trains and telecoms, said the planned U.S. budget airline would be set up along the same lines as Virgin Blue.
After a modest start of 10-15 planes the fleet would grow to about 30 aircraft within 18 months, Branson said. A number of institutional partners would be involved in the venture.
Under U.S. law, foreign companies are only allowed to own 25 percent of voting rights in a U.S. airline and an economic interest of up to 49 percent. However, last month U.S. Transportation Secretary Norman Mineta urged Congress to raise foreign ownership limits to 49 percent of voting stock.
Branson said he hoped that the United States would permit clauses within the U.S. airline's structure that would result in Virgin taking control should ownership laws be relaxed. By owning less than 50 percent of the company, Virgin would depart from its strategy of controlling the firms it invests in.
The planned airline would be started from scratch, Branson said. "Our philosophy is that (is) the best way to build a company."
He said no decision had been made on whether the airline would use Boeing (NYSE:BA - News) or Airbus (Paris:EAD.PA - News) aircraft.
Reuters
UPDATE - UK's Branson plans budget U.S. airline
Wednesday July 16, 9:44 am ET
By Daniel Morrissey
(Adds size of planned fleet, Virgin Blue float plans)
LONDON, July 16 (Reuters) - Virgin Group Chairman Richard Branson announced plans on Wednesday to set up a "quality low-cost" airline in the United States by the end of June 2004 to rival JetBlue (NasdaqNM:JBLU - News) and Southwest (NYSE:LUV - News).
"We are planning to get in there and make sure there is a third, very powerful low-cost airline in America," Branson said. Virgin would own under 50 percent to meet U.S. aviation laws.
He also forecast that Australian discount carrier Virgin Blue (Australia:PRK.AX - News) would float in October or November and he saw a pick-up in the London-U.S. market for first-class and business-class passengers after the worst downturn in years.
"The premium traffic is coming back. SARS is behind us, the recession is beginning to be behind us and there is a lot more activity out there," he said. "The Gulf War is also behind us."
Branson made the comments at the unveiling of a new premium class service for transatlantic carrier Virgin Atlantic. He said the ticket, including the industry's most spacious beds, could attract five percent of business-class and 12 percent of first-class travellers from arch rival British Airways (London:BAY.L - News).
The service will be launched after the summer, coinciding with BA's withdrawal of its fleet of Concorde luxury supersonic aircraft. Branson dressed up as the lead character from horror movie The Texas Chainsaw Massacre to chop through a BA seat.
Branson, whose interests span music, trains and telecoms, said the planned U.S. budget airline would be set up along the same lines as Virgin Blue.
After a modest start of 10-15 planes the fleet would grow to about 30 aircraft within 18 months, Branson said. A number of institutional partners would be involved in the venture.
Under U.S. law, foreign companies are only allowed to own 25 percent of voting rights in a U.S. airline and an economic interest of up to 49 percent. However, last month U.S. Transportation Secretary Norman Mineta urged Congress to raise foreign ownership limits to 49 percent of voting stock.
Branson said he hoped that the United States would permit clauses within the U.S. airline's structure that would result in Virgin taking control should ownership laws be relaxed. By owning less than 50 percent of the company, Virgin would depart from its strategy of controlling the firms it invests in.
The planned airline would be started from scratch, Branson said. "Our philosophy is that (is) the best way to build a company."
He said no decision had been made on whether the airline would use Boeing (NYSE:BA - News) or Airbus (Paris:EAD.PA - News) aircraft.
Jul 18, 2003, 1:01 pm
#3
Join Date: Feb 2003
Posts: 88
I would normally post anything here but as an U.S. employee is the airline industry, we do not need another airline to startup here right know. We need to get the industry stablized. Another airline would send airlines already close to the edge, over the cliff.
Jul 18, 2003, 1:06 pm
#4
Join Date: Nov 2000
Location: HPN
Posts: 777
Um, wn-bna, that's called capitalism. And Southwest is the least likely of all the airlines to go to the wall.
If you want an economy where the government decides how many airlines there shall be, go visit a communist country and see how well they're doing. I'm not an unabashed capitalist, but realistically, if AA or United quake in their boots at the thought of Branson coming in (with a US partner, of course -- can't have these foreigners transporting Americans
), that's their problem, and their responsibility to fix it.
Personally I think the US airline industry can handle three big low-costs, and I think they're likely to be Southwest, jetBlue and either Virgin or Airtran.
As an aside, I always think of Southwest as Wal-Mart (cheap, cheerful and exactly what you need and no more), jetBlue as Target (much like Wal-Mart but with a few more frills), and Airtran as K-Mart (too down-at-heel to bother with). Maybe Virgin will be Kohl's...
[This message has been edited by marlborobell (edited 07-18-2003).]
If you want an economy where the government decides how many airlines there shall be, go visit a communist country and see how well they're doing. I'm not an unabashed capitalist, but realistically, if AA or United quake in their boots at the thought of Branson coming in (with a US partner, of course -- can't have these foreigners transporting Americans
), that's their problem, and their responsibility to fix it.Personally I think the US airline industry can handle three big low-costs, and I think they're likely to be Southwest, jetBlue and either Virgin or Airtran.
As an aside, I always think of Southwest as Wal-Mart (cheap, cheerful and exactly what you need and no more), jetBlue as Target (much like Wal-Mart but with a few more frills), and Airtran as K-Mart (too down-at-heel to bother with). Maybe Virgin will be Kohl's...
[This message has been edited by marlborobell (edited 07-18-2003).]
Jul 21, 2003, 5:47 pm
#5
Join Date: Feb 2003
Posts: 88
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by marlborobell:
Um, wn-bna, that's called capitalism. And Southwest is the least likely of all the airlines to go to the wall.
If you want an economy where the government decides how many airlines there shall be, go visit a communist country and see how well they're doing. I'm not an unabashed capitalist, but realistically, if AA or United quake in their boots at the thought of Branson coming in (with a US partner, of course -- can't have these foreigners transporting Americans ), that's their problem, and their responsibility to fix it.
Personally I think the US airline industry can handle three big low-costs, and I think they're likely to be Southwest, jetBlue and either Virgin or Airtran.
As an aside, I always think of Southwest as Wal-Mart (cheap, cheerful and exactly what you need and no more), jetBlue as Target (much like Wal-Mart but with a few more frills), and Airtran as K-Mart (too down-at-heel to bother with). Maybe Virgin will be Kohl's...
[This message has been edited by marlborobell (edited 07-18-2003).]</font>
Um, wn-bna, that's called capitalism. And Southwest is the least likely of all the airlines to go to the wall.
If you want an economy where the government decides how many airlines there shall be, go visit a communist country and see how well they're doing. I'm not an unabashed capitalist, but realistically, if AA or United quake in their boots at the thought of Branson coming in (with a US partner, of course -- can't have these foreigners transporting Americans
), that's their problem, and their responsibility to fix it.Personally I think the US airline industry can handle three big low-costs, and I think they're likely to be Southwest, jetBlue and either Virgin or Airtran.
As an aside, I always think of Southwest as Wal-Mart (cheap, cheerful and exactly what you need and no more), jetBlue as Target (much like Wal-Mart but with a few more frills), and Airtran as K-Mart (too down-at-heel to bother with). Maybe Virgin will be Kohl's...
[This message has been edited by marlborobell (edited 07-18-2003).]</font>
Now a time may come when the industry will be run by the "discount" airlines and many of the "full service will either fold or reinvent themselves. Until then, no more start-ups.
Jul 24, 2003, 8:44 pm
#6
Join Date: Apr 2001
Location: DL-PM
Posts: 863
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by wn-bna:
I'm all for capitalism my friend but at what cost. I'm not worried about any compatision but I sure don't want to see any others loose their jobs because of over compatition. Right now part of the problem that the airline industry faces is too many seats for too few passengers.
Now a time may come when the industry will be run by the "discount" airlines and many of the "full service will either fold or reinvent themselves. Until then, no more start-ups.</font>
I'm all for capitalism my friend but at what cost. I'm not worried about any compatision but I sure don't want to see any others loose their jobs because of over compatition. Right now part of the problem that the airline industry faces is too many seats for too few passengers.
Now a time may come when the industry will be run by the "discount" airlines and many of the "full service will either fold or reinvent themselves. Until then, no more start-ups.</font>
Jul 25, 2003, 12:14 pm
#7
Join Date: Feb 2003
Posts: 88
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by H53Epilot:
Do you happen to work for one of the US automakers? Hey partner, it's survival of the fittest, whether that means Japanese, British or American. Now that's COMPUTISHUN.
Originally posted by wn-bna:
I'm all for capitalism my friend but at what cost. I'm not worried about any compatision but I sure don't want to see any others loose their jobs because of over compatition. Right now part of the problem that the airline industry faces is too many seats for too few passengers.
Now a time may come when the industry will be run by the "discount" airlines and many of the "full service will either fold or reinvent themselves. Until then, no more start-ups.</font>
I'm all for capitalism my friend but at what cost. I'm not worried about any compatision but I sure don't want to see any others loose their jobs because of over compatition. Right now part of the problem that the airline industry faces is too many seats for too few passengers.
Now a time may come when the industry will be run by the "discount" airlines and many of the "full service will either fold or reinvent themselves. Until then, no more start-ups.</font>
Jul 27, 2003, 3:10 am
#9
Join Date: Jul 2000
Location: anywhere but here
Programs: LH au VS au BMI au
Posts: 2,375
no one is going to lose a job - VS will be creating them. If one goes bust then the other will typicallly expand into its markets - the difference is that the no frills employ less people to decrease prices in a sensible longterm way - the bloated outfits cant compare
Jul 27, 2003, 2:29 pm
#10
Join Date: Mar 2003
Location: I have resided many places, but only ever lived in San Francisco.
Programs: UA, AA
Posts: 292
Ever since WN left, SFO has been a prime airport for an LCC. For years it has been said that the Bay Area has some of the highest fares in the nation, and anecdotal evidence also suggests this. Maybe Virgin US will finally bring some serious competition to the market. (Without having to go to OAK!)
Jul 27, 2003, 9:29 pm
#11
Join Date: Feb 2002
Posts: 1,695
<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by wn-bna:
I would normally post anything here but as an U.S. employee is the airline industry, we do not need another airline to startup here right know. We need to get the industry stablized. Another airline would send airlines already close to the edge, over the cliff.</font>
I would normally post anything here but as an U.S. employee is the airline industry, we do not need another airline to startup here right know. We need to get the industry stablized. Another airline would send airlines already close to the edge, over the cliff.</font>
As you said in a subsequent post, their are too many seats. This would help eliminate the over capacity and stabilize yields almost overnight.
Nov 20, 2003, 11:23 pm
#12
Join Date: Oct 2001
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">
In my opinion the best thing that could happen to the industry is for an airline the size of UA, UA, or AA to go out of business.
</font>
In my opinion the best thing that could happen to the industry is for an airline the size of UA, UA, or AA to go out of business.
</font>
Anyway, how about CO or DL going out of business. If any two airlines deserve to die it's those two.
Nov 21, 2003, 1:13 pm
#15
Join Date: Oct 2001
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">
I thought the rolling fog of the bay would be a very good reason not to operate an LCC out of SFO. Delays lose money quickly due to lower utilization
</font>
I thought the rolling fog of the bay would be a very good reason not to operate an LCC out of SFO. Delays lose money quickly due to lower utilization
</font>
The only reasonable bay area alternative is OAK, but there is a shortage of gates there. SJC would be too inconvenient for passengers, since the management idiots overlooked a direct shuttle between SJC and the BART.