=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/2006/01/13/BUGMQGMA5N= 15.DTL --------------------------------------------------------------------- Friday, January 13, 2006 (SF Chronicle) Virgin leases office space/Burlingame will serve as airline's U.S. headquar= ters David Armstrong, Chronicle Staff Writer Startup airline Virgin America has signed a long-term lease for new offices near San Francisco International Airport, in anticipation of beginning its first flights later this year. Virgin America, which has 27 employees working on two floors in an office building at 533 Airport Blvd. in Burlingame, will move to bigger offices nearby, at 555 Airport Blvd., the airline said Thursday. The airline, which intends to operate as a low-cost carrier, signed a 10-year lease for a 42,000-square-foot space from Equity Office, which owns and operates the building. Terms were not disclosed. Virgin America said in June 2004 that it would base its operational headquarters in the Bay Area, with its corporate headquarters in New York. However, that plan has changed and the startup carrier plans to run its entire operation from its expanded Bay Area offices, Fred Reid, Virgin America's chief executive officer, said in an interview this week. The consolidation made sense because splitting the operation over several time zones and flying executives back and forth would have been too awkward, Reid said. The company, which will move into its new offices in March, secured $177= .3 million in financing last month from investors. During the next two years, it expects to hire 1,500 people and grow within five years to 3,000 employees, most of whom will be based in the Bay Area, Reid said. "This is one of the most important markets in the country, yet it has no hometown airline," Reid said. Virgin America is 25 percent owned by British entrepreneur Richard Branson's Virgin Group, which operates Virgin Atlantic Airways, sells branded cola and vodka, and runs trains in the United Kingdom, among other things. Virgin America's majority investors, Black Canyon Capital and Cyrus Capital Partners, are U.S. companies, as required by U.S. law. Reid, a former senior executive at Delta Air Lines and Lufthansa German Airlines, is American. "This is a U.S. company," he said "Virgin is a licensed trademark. It's a franchise and a great brand." Virgin America is seeking approval from the Federal Aviation Administration, which clears airlines for safety, and the Department of Transportation, which reviews business plans, to begin flying. Last month, Delta, Continental Airlines, American Airlines and United Airlines asked the government to halt its review of Virgin America's application, charging that its paperwork is incomplete. Reid disputes this. "We spent more than a year preparing it and filed mo= re than 1,000 pages," he said, adding that the airline has not heard specifically what is incomplete in what he termed an "exceedingly detailed" application. The objecting airlines have been joined by the Air Line Pilots Associati= on and the AFL-CIO Transportation Trades Department, who fear a loss of U.S. airline industry jobs and creeping foreign influence in the ownership and operation of U.S. air carriers. Reid said such objections may delay Virgin America's take-off but will n= ot prevent it from flying. The carrier hopes to start service before the end of this year, beginning operations with low-fare service on prime transcontinental routes, such as between San Francisco and New York, aboard new Airbus 320 aircraft. E-mail David Armstrong at davidarmstrong@xxxxxxxxxxxxxxxx --------------= -------------------------------------------------------- Copyright 2006 SF Chronicle