Reuters
Virgin USA Airline Startup Eyes NY, SF
Monday May 24, 10:24 am ET
NEW YORK (Reuters) - British entrepreneur Richard Branson said on Monday the Virgin USA startup airline, which is tentatively set to launch sometime next year, has narrowed its choices for a home city to San Francisco or New York.
Speaking at an entrepreneurs' summit, Branson said the carrier, which does not yet have a name, route structure or airplanes, was considering buying aircraft from Boeing (NYSE:BA - News) or Airbus.
"I can't at this stage confirm whether it's going to be Airbus or Boeing ... I think the airline is going to need about 50 planes," he said.
The United States currently restricts foreign ownership of U.S. airlines, allowing a maximum 25 percent voting stake and 49 percent total equity. Some industry experts have expressed concern about how Branson plans to deal with the restrictions and whether he would truly cede control.
Fred Reid, former president of Delta Air Lines (NYSE

AL - News), is spearheading the Virgin USA start-up from New York and is said to be busy trying to line up investors.
"We will not own the airline," Branson said in response to a question about the ownership laws. "It will be owned by American companies, and American companies will run the airline. We will have a stake in the airline -- we will license the Virgin brand to it."
Last month, sources familiar with the matter told Reuters that Virgin USA executives told Boeing Commercial Airplanes executives in Seattle they were out of the running for the airplane order, although they cautioned that jet deals often change up to the last minute.
The Virgin order would likely be the largest order from the United States this year, as most American carriers remain mired in a deep financial downturn and are not thinking about buying planes but rather just trying to make money.