=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/c/a/2004/06/05/MNG1K71GGL= 1.DTL --------------------------------------------------------------------- Saturday, June 5, 2004 (SF Chronicle) SFO lands new carrier Virgin USA -- 1,500 jobs/Airline sets sights on low-f= are market; corporate center to be based in N.Y. Harriet Chiang and David Armstrong, Chronicle Staff Writers Virgin USA, the fledgling discount airline backed by British entrepreneur Richard Branson, will make San Francisco its home base of operations, creating as many as 1,500 jobs in the Bay Area, the carrier confirmed Friday. Virgin will base its operational headquarters in San Francisco and its corporate headquarters in New York, taking advantage of two of the country's largest travel markets. The two cities were finalists in Virgin's process of deciding where to establish the home base for its U.S. airline, which is intended to compete with such low-fare carriers as Southwest and JetBlue. Virgin USA is scheduled to be up and running by next year. "After careful deliberation, we felt that pairing New York and San Francisco would provide the best foundation for a business model that allows us to deliver a better experience and better value for air travelers," Fred Reid, head of Virgin USA, said in a statement scheduled to be released Monday. In its first two years of operations, the company plans to hire more than 1,500 flight attendants, pilots, maintenance technicians and other employees to work in San Francisco. Virgin said it will be the only airline with its principal operations based in California. San Francisco Mayor Gavin Newsom said Virgin's decision is great news for the Bay Area. "This is a tremendous deal for the city of San Francisco and the entire Bay Area," Newsom said. "The new Virgin-branded airline startup is a perfect match with San Francisco in so many ways. The Virgin brand is unique, and San Francisco is the world's most unique city." Gov. Arnold Schwarzenegger called the announcement "fantastic news." "I'm thrilled the airline has decided to take advantage of California's many advantages -- a vast market, qualified workforce, wonderful lifestyle, excellent operating climate and a government committed to making it easier for businesses to succeed," he said. California and San Francisco offered Virgin more than $15 million in sta= te and local employment training grants, cooperative marketing and other incentives. The timing is good for the Bay Area, where the travel business is picking up at airports in San Francisco, Oakland and San Jose. The Bay Area may have gotten an unexpected boost in April when Branson named Reid, a former Delta Airlines president, as chief executive of Virgin USA. Reid is a graduate of UC Berkeley with strong ties to the Bay Area. In his statement, Reid said San Francisco and New York match up well with the airline and its founder, Branson, a maverick whose corporate empire includes record and entertainment operations and mobile phones and who has positioned his international carrier, Virgin Atlantic Airways, as a cheeky outsider. Culturally, Reid said, "New York and San Francisco reflect the Virgin brand's fun, dynamic style, making them both ideal places for us to recruit creative, skilled employees who can deliver on our vision of outstanding customer service." Reid said the airline plans to hire more than 300 for its New York corporate headquarters. The airline said it expects to hire more than 3,000 employees in both cities over the next five years. New York Gov. George Pataki said Virgin's decision to base its corporate operations in his state shows that "we are the business capital of the world." In its courtship of Virgin, San Francisco offered many advantages, including extensive maintenance facilities at San Francisco International Airport and a vast pool of airline employees who have been laid off during the economic downturn that began in 2000. But New York was seen as having an edge because Virgin Atlantic, which is 51 percent owned by Branson, already has a major presence in New York, which serves as a gateway to the Atlantic and the European market. If the airline takes off next year as planned, Branson, as a British citizen, cannot own more than 49 percent of the carrier. He has said he envisions Virgin USA as a domestic low-cost carrier, similar to JetBlue and Southwest, flying primarily in the United States. The Associated Press contributed to this report.E-mail the writers at hchiang@xxxxxxxxxxxxxxx and darmstrong@xxxxxxxxxxxxxxxx -------------------= --------------------------------------------------- Copyright 2004 SF Chronicle