Virgin America to fly Airbus planes

The Virgin Group’s new low-fare airline has agreed to buy and lease up to 105 narrow-body jets from Airbus SAS and name the carrier Virgin America.

Frederick Reid, the head of Virgin America, said the airline had placed a firm order to buy 11 A319s and seven A320s from the France-based manufacturer, to be delivered early in 2005, and that it would lease 15 more A320s from GE Capital Aviation Services, a unit of General Electric Co.

The A319s typically carry 124 passengers, while the A320s carry about 150 passengers, according to Airbus.

Reid would not put a price tag on the deal, although the firm order for 18 planes would be worth about £551 million based on catalogue prices. Airlines typically negotiate discounts from plane manufacturers, however.

Reid made the announcement at a luncheon of the International Aviation Club in Washington.

Billionaire Sir Richard Branson, the founder and head of Virgin Group, will be a minority shareholder in the airline, as US law forbids foreigners from owning more than 49 percent of a domestic carrier.

Virgin America has yet to identify who its US-based investors will be. The company has said its operations will be based in San Francisco and its corporate headquarters is in New York.

Reid said he was not ready to speak about routes Virgin America plans to fly, other than New York to San Francisco. The carrier hopes to begin flying by mid-2005. Reid also said Virgin America would create 3,000 new jobs in the United States.

Virgin Group runs two other low-fare airlines – Virgin Express in Europe and Virgin Blue in Australia.