UK airline Virgin in talks on $1.6 bln plane order

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UK airline Virgin in talks on $1.6 bln plane order  =

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Sunday August 10, 11:21 AM EDT =


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, own=
ed by EADS (EAD) and Britain's BAE Systems (BA), and U.S. arch-rival Boei=
ng (BA) 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 tha=
t we can add capacity and take new aircraft," Paul Moore, director of cor=
porate affairs for Virgin Atlantic, told Reuters. =


"The best will always survive in any conditions and we've been taking mar=
ket 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.

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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 b=
e 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 t=
error attacks, the Iraq war, the SARS virus and sluggish economies. =


But Virgin, which is 51 percent owned by Branson's Virgin Group [VA.UL] a=
nd 49 percent owned by Singapore Airlines (SIAL), said last week it had s=
wung 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. =



=A92003 Reuters Limited. =


Roger
EWROPS

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