Branson to inject capital into Virgin America

Virgin Atlantic president Sir Richard Branson has stated that extra capital will be injected into Virgin America in order to help the airline break even.

Speaking in a Bloomberg radio interview, Sir Richard revealed: "We're going to put a bit more capital in because we had fuel prices that went up to $148 [£64] a barrel."

"I suspect there's a small amount of extra capital that is needed to get it to break even," he added.

However, Sir Richard was also quick to stress that he would not impinge on legislation banning foreigners from controlling US airlines or owning greater than a 25 per cent stake.

California-based Virgin America commenced operations in August 2007 and Branson is confident that the carrier will reach profit by its second year.

Virgin Group took a 25 per cent stake towards the estimated $177 total costs of setting up the airline, alongside giving a $53 million loan.

Sir Richard explained in the interview: "Virgin America has our brand attached to it, it's something we're incredibly proud of and we will support."

At present, the only performance data available for Virgin America is that the carrier lost $34.8 million in its first quarter of operation, reports Business Mirror.

This because the airline made a request to the US Bureau of Transportation Statistics in March 2008 to keep its performance results secret unless revenues exceeded $1 billion.

This was declined in June but the airline appealed the month after which has meant that the bureau is holding back its figures until a final decision is reached.

Airline News posted on 13 October 2008

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Branson to inject capital into Virgin America

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