Will Offer Business Class Flights Connecting London, US

Virgin Group founder Sir Richard Branson is creating a bit of a stir in the transatlantic arm of the airline industry, especially among the rookies, with plans to start business class-only flights in a yet another new air travel venture. 

"In the next 12 to 18 months we will start a business-only airline," a Virgin spokesman told Reuters on Monday. "We'll serve New York initially and then other US cities."

Newbies EOS, MAXjet and Silverjet already offer business class-only flights with competitive fares. They are probably watching this situation unfold with great interest.

"I think the Virgin concept is very interesting," said Keith McMullan of London-based consultancy Aviation Economics. "They're offering their premium product out of Continental Europe for the first time. I think it's the start of a trend and it's commercially logical," he said.

And don't think the heavyweight class will take any turf encroachment lying down. Virgin Atlantic is already planning new flights to New York from Paris, Amsterdam, Frankfurt, Milan and Zurich, as well as from London.

British Airways makes the bulk of its profits on transatlantic flights and is said to be seriously investigating the business class-only model.

The carriers' spring into action coincides with not only the potential threat of one more new carrier, but with new competition that will undoubtedly arise when the Open Skies pact between Europe and the United States goes into effect on March 30, 2008.

As ANN reported, the landmark "open skies" agreement significantly eases restrictions on transatlantic flights.

"With this agreement, the honeymoon in Paris, the business trip to Dublin, and family reunion in Naples will be cheaper, easier, and within the reach of more Americans than ever before," said US Transportation Secretary Mary Peters. "Also, better access to American destinations means European visitors will bring new business to our local communities."

Apparently getting ready to take advantage of the agreement, Virgin is planning to acquire up to 15 new planes worth about $700 million at current list prices, the Virgin spokesman said.

"We may use some of the (Boeing) 787s we ordered recently," he said, but added the airline is in talks with Boeing, Airbus, Embraer and Bombardier.

FMI: www.virgin.com