Planned US start-up Virgin America will serve several of the country’s major cities using an initial fleet of 17 Airbus A320 family aircraft within a year of launching services from San Francisco, California.
The carrier, which has secured $177 million in launch capital, says in its application for US Department of Transportation certification that its initial focus will be on measured growth “on longer-haul, domestic US routes that serve major cosmopolitan markets where guests are particularly likely to value Virgin America’s quality service offering”.
Virgin America’s headquarters and base of operations will be in the San Francisco bay area, which as well as San Francisco (SFO), has Oakland and San Jose as major international airports. Its main operations will be at SFO.
Virgin America has agreements to take delivery of 33 A320 family aircraft, including 18 purchased directly from Airbus and 15 leased from General Electric Capital Aviation Services (GECAS). Deliveries will begin in 2006.
The carrier has secured what it believes is one of the largest funding commitments of any US start-up airline. VAI Partners – a US investment company co-managed by Mark Lanigan of Los Angeles-based Black Canyon Capital and Nicholas Singer of New York’s Cyrus Capital Partners – is the largest contributor. It holds and controls 75% of the capital stock and voting interest, and has designated two-thirds of the voting members of the airline’s board of directors.
Lanigan’s and Singer’s firms will each control private investment in Virgin America totalling $44 million for a total contribution from VAI Partners of $90 million.
The remaining 25% of the voting and equity interest in Virgin America is held by a Virgin group company and two British citizens. These non-US citizens will contribute $30 million in equity and $58.6 million in subordinated debt to the new airline.
A newly formed board of directors has appointed Lanigan as chairman of Virgin America and former Delta Air Lines president Fred Reid as chief executive.
MARY KIRBY/PHILADELPHIA
Source: Flight International
