Virgin Selects San Francisco For U.S. Hub

The still nameless Virgin-branded low-fare airline this weekend announced San Francisco as its principal base of operations planned for launch in 2005. The city edged out other frontrunners, Boston and Washington, D.C., while New York was chosen as the carrier's corporate headquarters.

"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," said Fred Reid, head of the Virgin operation. The company added that a "significant presence on each coast will enable the airline to create operational efficiencies."

The selection of San Francisco likely will pose a new challenge for United Airlines, which operates a large hub at the airport. In hinting at operations between San Francisco and New York, the Virgin carrier also will join an increasingly crowded transcontinental market that recently has seen several low-fare airlines drive down fare levels.

Other details about the Virgin start-up remain unclear, including an official name, the size and composition of its fleet, the intended route network and other product details. To skirt foreign ownership limitations, the carrier will be majority-owned by U.S. investors.