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Branson May Base Airline in L.A.

Start-up Virgin USA could create up to 1,500 jobs. Schwarzenegger has been asked to lobby LAX to make upgrades.

November 29, 2003|Peter Pae | Times Staff Writer

TOULOUSE, France — Richard Branson, the flamboyant British billionaire who founded Virgin Atlantic Airways, is thinking of making Los Angeles the headquarters for an airline he wants to launch in the U.S.

Branson, an aviation buff who flies hot-air balloons, has discussed the idea with California Gov. Arnold Schwarzenegger. The two met this year during the filming of the remake of "Around the World in 80 Days," a Jackie Chan movie in which Branson and Schwarzenegger have small parts.

Schwarzenegger has been lobbying Branson in recent weeks to make a commitment. "We are considering Los Angeles within our plans," Branson said in a letter this week to Schwarzenegger.

The low-cost airline, which Branson would call Virgin USA, could create up to 1,500 jobs. A decision on the headquarters could come within six weeks, he said in an interview.

Los Angeles is among a handful of cities where Branson might base a U.S. carrier; others include Boston, Philadelphia, San Francisco and Miami. A key criterion is that Virgin Atlantic already operates its international service to London from the U.S. city's airport. Virgin Atlantic operates two nonstop flights a day from London to Los Angeles.

Branson, an entrepreneur who has created a major record company and dabbled in a variety of ventures including soft drinks and cellphones, has long wanted to operate an airline in the U.S.

The recent success of JetBlue Airways Corp., the low-cost, cross-country carrier, has caught the attention of many in the industry. Branson's plans have accelerated in recent weeks as more domestic airlines have set up low-cost carriers of their own to compete with JetBlue, including Delta Air Lines' Song and United Airlines' Ted.

Branson didn't elaborate on how he would market Virgin USA. He has had tremendous success elsewhere. In Australia, Branson started Virgin Blue in August 2000 with a staff of 600 and two aircraft. It now has 2,800 employees and operates 40 jets, and has garnered nearly a third of the Australian market.

Branson says he is talking to a major U.S. carrier about purchasing a "significant" number of its gates. He declined to name the carrier, but some analysts believe it is US Airways, which wants to shed some of its slots.

An agreement with the airline could be reached as early as next week, Branson said.

U.S. law permits a foreign carrier to own 49% of a U.S. carrier.

Branson made his remarks while visiting the headquarters here of European aircraft maker Airbus. A contingent of executives has been talking to Airbus about purchasing a dozen single-aisle A320 jetliners for Virgin USA. Branson said he has met with Boeing Co. about purchasing a like number of single-aisle 737s.

In his letter to Schwarzenneger, Branson urged the governor to encourage LAX officials to make improvements, including installing passenger gates capable of accommodating what will be the world's biggest passenger plane, which Virgin Atlantic plans to begin flying in 2006.

Virgin Atlantic has ordered six Airbus A380s, which will seat 555 passengers on two levels. It hopes to become the first airline to offer A380 service between Los Angeles and London.

Schwarzenegger's office confirmed that he had met with Branson and encouraged the executive "to bring more jobs to California."

Branson said he might consider alternatives, such as San Francisco International Airport, if LAX fails to make the improvements. But he said he was confident in the governor. Schwarzenegger "never seems to fail in his films," Branson said, "so I think that problem is solved."

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