"SFO to be home for Virgin America airline"

Thursday, December 8, 2005

SFO to be home for Virgin America airline
By Andrew Hamm 
The San Jose (CA) Business Journal


San Francisco International Airport will be the home and principal hub of
the newly formed Virgin America Inc. airline that is schedule to begin
service in 2006. 
 
The company announced it has secured $177.3 million in funding from two
venture capital firms, Black Canyon Capital and Cyprus Capital Partners.
Virgin America's first chairman will be Mark Lanigan, a managing director of
Black Canyon Capital. Fred Reid, former president of Delta Air Lines, will
be the chief executive officer. 

British billionaire Richard Branson, head of the Virgin group of companies,
will hold a minority stake in the company. Mr. Branson owns Virgin Atlantic
Airways and Virgin Blue airlines but, under U.S. law, foreign nationals are
not allowed to own a majority stake in a U.S.-based airline. 

The company has been tight-lipped about its operations but investors expect
it to operate along the lines of JetBlue and other discount airlines. 

The company expects to hire about 1,800 personnel, including more than 300
in its corporate headquarters. California has provided Virgin America more
than $15 million in grants and financial incentives to locate here. The
company expects its initial headquarters to be at San Francisco
International Airport. Prior reports had the company looking for
headquarters in Burlingame. The company earlier had said its corporate
headquarters would be in New York while its operations base would be in San
Francisco. 

"We believe that a single home base in the Bay Area will help simplify
operations during the company's intense start-up period," Mr. Reid says. 

Although exact routes have not been announced, Virgin America has 33
aircraft available to it, including 18 purchased Airbus A319s and A320s and
15 leased aircraft from General Electric Capital Aviation Services. Mr. Reid
has said he has deals in place to buy or lease as many as 105 aircraft. 

Mr. Reid, in a prepared statement, says the funding will allow Virgin
America to concentrate on "recruiting highly talented people, initiating the
U.S. (Department of Transportation) and (Federal Aviation Administration)
certification processes and development awareness in the marketplace."


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