UK airline Virgin in talks on $1.6 bln plane order

[akayama]

Reuters

UK airline Virgin in talks on $1.6 bln plane order

Sunday August 10, 11:21 am ET

 

 

LONDON, Aug 10 (Reuters) - Richard Branson's airline Virgin Atlantic Ltd is in talks to buy aircraft worth about one billion pounds ($1.6 billion) and it said on Sunday it intends to ramp up its expansion despite tough industry conditions.

 

Virgin said it had started talks with European aircraft maker Airbus, owned by EADS (Paris:EAD.PA - News) and Britain's BAE Systems (London:BA.L - News), and U.S. arch-rival Boeing (NYSE:BA - News) to buy up to 10 aircraft in addition to 13 it has already ordered for delivery in the next few years.

 

"Market conditions are still tough, but we're increasingly optimistic that we can add capacity and take new aircraft," Paul Moore, director of corporate affairs for Virgin Atlantic, told Reuters.

 

"The best will always survive in any conditions and we've been taking market share from rivals and adding routes. We've proven the quality of our products and services and that will continue to attract customers even in a difficult market," Moore said.

 

Virgin aims to complete the discussions "within weeks, if not months" and could take delivery of the new orders from as early as next year.

 

Moore declined to comment on the likely supplier, and said planes could be taken from both manufacturers.

 

"It's up to them to sharpen their pencils and make us the best offer," he said.

 

Airbus is due to supply 12 of the Virgin aircraft currently on order with Boeing providing only one, which Moore said was because Airbus had made a better offer.

 

Demand for air travel has slumped in the last two years due to fears of terror attacks, the Iraq war, the SARS virus and sluggish economies.

 

But Virgin, which is 51 percent owned by Branson's Virgin Group and 49 percent owned by Singapore Airlines (SES:SIAL.SI - News), said last week it had swung back to a net profit of 9.9 million pounds in the year to April 2003, from a 59.5 million pound loss in 2001/02.