PPRuNe Forums - Virgin USA Choose San Francisco as Base

AP

20:50 PDT SAN FRANCISCO (AP) --

Virgin Choose San Fancisco for New Domestic Low-Cost

A new low-fare airline carrying the Virgin name will be based here, the airline announced Friday, a coup for the major tourist destination that's been hard-hit by the dot-com implosion and fallout from the Sept. 11 terror attacks.

Corporate headquarters for the as yet unnamed airline will be New York City.

Within its first two years, the airline plans to hire more than 1,500 pilots, flight attendants, maintenance technicians and engineers who will be based in San Francisco. About 300 employees are expected to work at the airline's New York headquarters.

Gov. Arnold Schwarzenegger called the announcement "fantastic news."

"I'm thrilled the airline has decided to take advantage of California's many advantages," he said.

City officials also lobbied aggressively for Virgin Group Ltd. to choose San Francisco as the new airline's hub.

Mayor Gavin Newsom called the agreement between Virgin and San Francisco "a perfect partnership" and "a very significant momentum builder" for the city.

"The timing couldn't be better," Newsom told The Associated Press late Friday. "Things are just starting to come back. ... This is just the kind of shot in the arm the city needs."

Airports in San Francisco, Oakland and San Jose are seeing higher levels of arrivals and departures so far this year.

As of April, the Convention and Visitors Bureau had booked 860,370 hotel room nights for groups that will use the Moscone Center this year, a 4 percent jump over last year.

Overall hotel occupancy in San Francisco for the first three months of 2004 has increased to 61.9 percent from 55 percent during the same period last year, according to PKF Consulting, which monitors hotel industry trends.

The city and state offered the airline more than $15 million in grants and incentives, which include employee training grants and cooperative marketing.

"We got what we wanted, which was the jobs, the heart and soul of the operation," Newsom said.

The airline, which has yet to receive regulatory approval, should be up and running next year, said airline spokeswoman Stacy Geagan.

The new airline, which is expected to compete with Jet Blue, Southwest and other low-cost carriers, will be led by Fred Reid, the former president and chief operating officer at Delta Air Lines Inc.

"Culturally, New York and San Francisco reflect the Virgin brand's fun, dynamic style, making them both ideal places for us to recruit creative, skilled employees," said Reid, who left Delta in April.

Richard Branson and his Virgin Group Ltd. is a minority shareholder in the new startup airline, Geagan said. Under U.S. law, Branson, a British citizen, can own no more than 49 percent of the carrier.

Branson's Virgin Atlantic Airways, where he's a 51 percent owner, already has a major presence in New York, gateway to the Atlantic and the large European market.

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