Branson:Virgin keeps Hong Kong flights despite SARS

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Branson:Virgin keeps Hong Kong flights despite SARS

TOKYO (Reuters) =97 Travel and retail mogul Richard Branson said on Thursday=
=20
that Virgin Atlantic Airways would continue flights to Hong Kong despite=20
the SARS outbreak and that he expected to take Virgin Blue public in "the=20
next few months."
Airlines throughout Asia have suffered severely as the deadly Severe Acute=
=20
Respiratory Syndrome spreads, depressing travel across the region and=20
threatening to hamper global growth. "We plan to continue to fly to Hong=20
Kong, and in fact one of the things that I'm going to do when I go to Hong=
=20
Kong is talk to the authorities about allowing us to fly on to Australia,"=
=20
the Virgin Atlantic chairman told Reuters in an interview. "Cathay Pacific=
=20
has been cutting back flights and actually I think what Hong Kong needs is=
=20
more flights, not less," Branson added. He said he would visit Hong Kong=20
next week to show that he is "willing to spend time there." Hong Kong's=20
Cathay, regarded as most exposed among major carriers, has slashed 45% of=20
its flights as passenger numbers have slid by two-thirds. The bludgeoned=20
airline said on Thursday it may cut its proposed dividend due to SARS.=20
Despite the uncertain economic outlook, Branson said he was bullish about=20
the prospects for his discount Australian unit, Virgin Blue, and that a=20
widely anticipated public offering for the carrier on the Australian Stock=
=20
Exchange was near.
"Virgin Blue is beating all expectations. I think it is one of the most=20
profitable airlines in the world and I would expect it to come to market in=
=20
the next few months," he said. "I would be surprised if we haven't floated=
=20
by the fall."

Virgin Blue, in which Branson and Australian transport group Patrick Corp=20
each have a 50% stake, had originally targeted an initial public offering=20
(IPO) in the first half of calendar 2003, but SARS and the war in Iraq have=
=20
hindered those plans.
Market sources have told Reuters that the IPO, which could be for about=20
A$500 million, is unlikely until at least the July-September quarter as the=
=20
Iraq war and SARS batter airlines around the world. Virgin Blue ranks=20
second in the Australian market to Qantas Airways, but has held up=20
relatively well as it cashes in on stronger domestic demand and manages to=
=20
maintain healthy yields and load factors. Branson also said he was in=20
discussions with "one or two networks" in Japan as the group gears up to=20
take a crack at the local telecoms market, hoping to repeat the success of=
=20
his Virgin Mobile units in the U.S. and other parts of the world. "We've=20
got a formula with Virgin Mobile that is taking America by storm, it's=20
taking Britain by storm, it's taking Australia by storm, and we would love=
=20
to launch in the Far East in countries like Japan as well," Branson said.=20
"Hopefully something will happen soon." Virgin Mobile USA, which sells=20
pay-in-advance wireless service primarily to teens and young adults, said=20
on Monday it attracted 500,000 customers in its first nine months of=20
operation. The joint venture between Branson's sprawling Virgin Group and=20
Sprint was launched last July and allows customers to pay for minutes in=20
advance instead of subscribing to a monthly plan.


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