Airlines abuzz about new kid=20 BY JOHN GILLIE; The News Tribune=20 It's an airline without a logo, a fleet, a timetable or even a public=20 route map.=20 But Virgin America is creating a stir in the airline industry months=20 before its first flight is due to take off. In the Pacific Northwest, two of the region's biggest aviation=20 businesses, The Boeing Co. and Alaska Airlines, already are feeling the effects of=20 Virgin America's pre-launch activities. Boeing, along with its rival, Airbus, competed for months to win the=20 new carrier's business. Meanwhile, Alaska, based in the City of SeaTac, is=20 steeling itself for what could be a formidable new West Coast competitor. The airline is the brainchild of English entrepreneur, adventurer and=20 airline founder Richard Branson. Like other new low-fare carriers, Virgin=20 America has the potential to create financial havoc among the ranks of the United=20 States' traditional carriers already wrestling with ruin. The airline plans to follow in some part the financially successful=20 path set by discount airlines Southwest and JetBlue and by other carriers that=20 Branson started: Virgin Atlantic Airways, Europe's Virgin Express and=20 Australia's Virgin Blue airways. The carrier already has held a widely publicized contest among states=20 to attract its headquarters. The airline in June dismissed the entreaties=20 from a handful of states and chose not one but two winners. Virgin America said it will establish its administrative headquarters=20 in New York City and its operational headquarters in San Francisco. That dual-headquarters strategy allows the airline to take advantage of=20 financial incentives totaling $26 million offered by two of the nation's largest=20 states and gives it a "hometown" presence in two of the biggest airline=20 markets in the country. The airline has told California it eventually might hire up to 1,600=20 pilots, mechanics and cabin attendants. In New York, Virgin America plans to=20 hire between 300 and 700 headquarters workers. And the new airline for months entertained offers from Boeing and=20 Airbus to equip its all-new fleet. In the end, Airbus won the contest. Between=20 leased and purchased aircraft, Virgin America plans to acquire 105 Airbus planes=20 in the A320 family. The airline will begin operations next year with 18=20 purchased and 15 leased planes. Since the mid-June announcement of the aircraft orders and the=20 headquarters decisions, the airline has been silent about its intentions, saying=20 only that it intends to begin operations sometime in 2005.=20 Virgin America thus far hasn't even hinted where it will fly, whether=20 it will be a bare bones operation like Ireland's Ryan Air or a service-oriented=20 carrier like Branson's Virgin Atlantic. With a hub in San Francisco, will Virgin America try to steal=20 north-south business from the three dominant West Coast airlines - Alaska,=20 Southwest and United - or take on the weakened transcontinental carriers, Delta,=20 American and United in cross-country flights? With a hub at New York's John F. Kennedy Airport, East Coast discounter=20 JetBlue has its fleet shuttling up and down the East Coast during daylight=20 hours and then sends its planes west for red-eye flights across the country. Certainly one of the advantages on making San Francisco its hub is the=20 prospect of taking on bankrupt United there. United is San Francisco's dominant=20 airline, but since its bankruptcy, the airline has trimmed flights and lost Bay=20 Area market share. Another advantage at San Francisco is the relative lack=20 of low-fare competition. Dallas-based Southwest Airlines served San Francisco from 1982 through=20 early 2001 but decamped because the airport's notorious fog and crowded=20 runways played havoc with Southwest's tight schedules, said Southwest=20 spokeswoman Marilee McInnis. Instead, Southwest has made cross-bay Oakland its San Francisco-area=20 hub with 123 flights daily. Likewise JetBlue serves Oakland and San Jose and not=20 San Francisco. Alaska, however, maintains a presence at all three Bay Area airports. Though $15 million in state of California aid to Virgin America is a=20 powerful incentive, some airline pundits wonder whether that inducement is worth=20 dealing with other issues at San Francisco. Though rumors suggested the airline would get free gates at the=20 airport, San Francisco International Airport deputy director Kandace Bender said no=20 special deals are available. Until recently, the airport offered 50 percent off=20 landing fees for a year to airlines providing new service, but that deal now=20 has been restricted to international routes only.=20 Three months of silence from Virgin America CEO Fred Reid - the former=20 Delta Air Lines CEO - has some in the industry wondering whether Branson's=20 ambitious plan will fly. Under U.S. law, Branson or other foreign owners can't own more than 25=20 percent of Virgin America. That means finding American investors to buy 75=20 percent of the airline. Both Southwest and Alaska say they're preparing for a potential West=20 Coast challenge from Virgin but note that until the airline gets its American=20 equity investment, it's just a paper airline. "We've faced discount competitors before and more than held our own,"=20 said Alaska Airlines staff vice-president Lou Cancelmi. "We're concerned,=20 but we're ready for whatever they send our way. "But until they raise the money they need, they won't be a threat." At Southwest, spokeswoman McInnis said the nation's largest discount=20 carrier is well prepared.=20 "We'll see about them," she said, noting the company hasn't raised the=20 money to launch its service yet. "We'll do what we've always done - offer low fares and frequent=20 flights." Sea-Tac Airport aviation director Mark Reis said Virgin America hasn't=20 yet contacted the airport. "I guess that comes after they raise their money," he said. Virgin America's silence is dictated by securities law, said Virgin=20 America director of communications Stacy Geagan. "We're still in the process of our private equity offering. We can't=20 talk about our plans while that is going on," she said. David Neeleman, JetBlue's founder, has doubts about Virgin America's=20 business plan. "I think the U.S. market is tough," Neeleman told the San Francisco=20 Chronicle. "Obviously, he (Richard Branson) hasn't raised his money yet. "He has a lot of work to do."=20 =20