Group plans purchases for low-fare and long-haul services
The Virgin Group is in the final throes of two key aircraft purchases involving its long-haul division Virgin Atlantic and its planned US domestic airline, which could result in orders and options for nearly 30 aircraft. Both deals, potentially worth $4 billion at list prices, are expected to be finalised in the coming months.
Speaking to Flight International last week during the inaugural service of its new business-class product between London Heathrow and New York, Virgin Group chairman Richard Branson said that he expects to launch the new US operation by mid-2004. "We are currently in discussions with Airbus and Boeing regarding an initial deal for 12 A320s or 737s," he said, adding that the new airline will operate low-fare services "on routes not currently served by JetBlue and Southwest Airlines".
Meanwhile, a separate campaign for new long-haul widebodies is nearing fruition at Virgin Atlantic, which could be for between 12 and 18 aircraft including options, depending on the aircraft selected. "We are talking to Airbus about more A340-600s, and Boeing about a deal for 777-300ERs," says Branson. He adds that a deal with Boeing would be larger than one with Airbus as the 777s could eventually replace all its A340s.
"A decision will be made before mid-2004, and deliveries will begin within a couple of years, depending on which aircraft we choose - the -600s could probably arrive slightly earlier," says Branson.
Virgin Atlantic chief executive Steve Ridgeway says that, while the two sales campaigns are not directly linked, there is "some cross-pressure" between the two.
Virgin currently operates 15 A340s - 10 -300s and five -600s - and has five more -600s on order. It also operates 14 Boeing 747-400s and has traditionally made much of the fact that it only operates four-engined aircraft. Branson concedes that an order for the twin-engined 777 would be a "change in tack...but we would be able to offer people a choice of two or four engines".
Virgin Atlantic aims to take 5% of British Airways' premium business over the next 12 months worth £100 million ($170 million) following the launch of its Upper Class Suite. The cornerstone of the £50 million cabin revamp features a novel seat which converts into a fully flat bed.
Source: Flight International
