16.11.05
Virgin Group is said to be considering making an offer for America's recently bankrupted low-cost operator Independence Air in a move which would finally allow Sir Richard Branson to break into America's budget airline market.
Virgin America, a subsidiary of the Virgin Group, has been on the drawing board for the past 2 years. It has yet to launch its domestic US service due to problems in complying with the country's restrictive foreign ownership rules governing airlines.
But the San Francisco-based company is understood to be looking closely at Independence's operating licence and other assets as a way to bring its fledgling airline into the skies by the first half of next year.
Independence declared bankruptcy last Monday after just 17 months as in independent operator. While some rivals would like Independence to sink completely because it has forced them to dramatically cut their own fares, others view it as attractive because of the popular east coast routes it flies and because its base in Washington's Dulles airport is regarded as a prime spot.
Independence filed for Chapter 11 bankruptcy protection with Delaware's bankruptcy court with $379m (£279m) in assets, $455m in liabilities and $24m in cash. It said it would auction itself to the highest bidder. Interested parties must register with the court by 1 December and submit formal offers by 16 December.
The launch of Virgin America, which is operated separately from the long-haul Virgin Atlantic business, has been delayed because the company has been talking to US private-equity firms about taking stakes in its business to satisfy rules limiting foreigners to owning 25 percent of an airline's voting shares.
Virgin would not comment on its interest in Independence.
