Virgin America - Definition and Overview

Virgin America is an airline company anticipated to begin operations in 2005. Its corporate headquarters will be in New York City but its operational base will be in either Burlingame or South San Francisco in the San Francisco Bay Area of California. The dual-headquarters scheme will allow the airline to take advantage of tax incentives in both "hometowns."

The airline was expected to establish a hub at San Francisco International Airport (SFO); however, in June 2004 it backed away from that statement. It has not announced a route structure, service levels, or even planned destinations, but did purchase 11 new Airbus A319 and 7 new Airbus A320 aircraft, and lease an additional 15 A-320s. It is expected to compete with incumbents Alaska Airlines and United Airlines, and to some extent with fellow low-cost carrier Southwest Airlines.

It is a project of Richard Branson's Virgin Group, which controls Virgin Atlantic Airways and Virgin Blue. U.S. law, however, limits foreign ownership to 49 percent and foreign control to 25 percent of domestic airlines, meaning Virgin must raise substantial funds from U.S. investors before starting operations. The airline's launch has been delayed until at least mid-2005.

Virgin America is presently headed by Fred Reid, former president of Delta Air Lines.

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