=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SFGate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/chronicle/archive/2004/05= /27/BUGA86S7PF1.DTL --------------------------------------------------------------------- Thursday, May 27, 2004 (SF Chronicle) Virgin USA CEO confirms S.F., N.Y. as top 2/Fledgling airline looks for hom= e base George Raine, Chronicle Staff Writer The chief executive officer of fledgling discount airline Virgin USA confirmed Wednesday that the company has narrowed its choices of a home base to San Francisco and New York. Fred Reid, the former president of Delta Airlines who was named CEO of Virgin USA by founder Sir Richard Branson in April, called Massachusetts Gov. Mitt Romney, Boston Mayor Thomas Menino and other officials to tell them their pitch to accommodate the carrier at Logan International Airport no longer fit his strategy. Virgin USA, which exists only on paper while Branson and his management team focus on raising capital, has had little to say about planning for a discount airline that it hopes will compete with Southwest Airlines, a carrier with a successful business model in a troubled industry. However, Virgin USA had made it clear to San Francisco and Boston officials that their proposals were particularly attractive in a field that also included one of the three major airports near New York City and Virginia's Washington Dulles International. Accordingly, it came as a surprise Monday when Branson, speaking briefly to a Reuters reporter in New York while at an entrepreneurs' seminar, said the field had been narrowed to San Francisco and New York. The change suggests that Reid, upon taking over from former CEO Frances Farrow, has redesigned the working strategy of the carrier-to-be. Boston and Massachusetts officials presented a proposal to Virgin USA th= at included $1.5 million for job training and other economic incentives that leveraged city, state and federal dollars as well as office space in a campus- like environment in an industrial park on the South Boston Waterfront. The park is owned by the Boston Redevelopment Authority. That setting, Reid told the officials without elaboration, no longer fit the company's plans, said Susan Elsbree, spokeswoman for the BRA. She said the office space that was turned down was offered at favorable but undisclosed lease terms. That led to speculation that Virgin USA may be contemplating using space both in San Francisco and New York for its needs -- administrative offices and maintenance facilities -- but the airline's officials did not return telephone calls seeking comment. "We are still very positive and feel we won because of the experience for having the team that we put together" to make the pitch, Elsbree said. "We never said we would bat a thousand, but next time we'll hit it out of the park. " Elsbree said that Reid had said no other competitor for Virgin USA had assembled a governor, a mayor, redevelopment and airport staff and the private sector in a team -- but the Bay Area's pursuit of the carrier has been no less aggressive. Gov. Arnold Schwarzenegger has telephoned Branson to lobby on behalf of San Francisco International Airport, said a press aide, Vince Sollitto, and San Francisco Mayor Gavin Newsom has petitioned Virgin USA on numerous occasions, aide Peter Ragone said. E-mail George Raine at graine@xxxxxxxxxxxxxxxx -------------------------= --------------------------------------------- Copyright 2004 SF Chronicle