Branson's flyer

Click to follow
Just over a year after starting Virgin Express, his Brussels-based no-frills airline, Richard Branson is weighing whether to sell shares in it to the public.

A sale would come as fledgling, low-cost airlines such as Mr Branson's make inroads against long-cosseted European national carriers for the first time, bringing down air fares that are still roughly double those in the US market.

Ireland's Ryanair said last week it would sell a third of its shares, the first public offer by the new breed of upstart carriers enticed into the European market by the gradual deregulation of its air routes.

Mr Branson said he was considering whether Virgin Express is ready to do the same. The carrier's revenue jumped 25 per cent to $200m last year. It sells an enviable 70 per cent of its seats.

Mr Branson stressed that he does not have immediate plans and is weighing other options, such as combining Virgin Express with Virgin Atlantic, his London-based long-haul airline. Mr Branson started Virgin Express last April by buying 90 per cent of the equity of Eurobelgian Airlines. It flies from Brussels to London, Barcelona, Copenhagen, Madrid, Milan, Nice and Rome, offering fares up to 50 per cent lower than its mostly state-owned rivals.

Investors might welcome a chance to get in on the ground floor of the new carrier, analysts said. The Virgin brand name is one attraction; another is an American management team schooled in a US market deregulated since 1978.

The airline has seat costs of only 6p a mile that it uses to undercut rivals. That compares with more than 12p a mile at rivals such as Sabena and Iberia.

"Virgin Express is in the vanguard of the European low-cost carriers and has the potential to interest the financial markets," said Chris Avery, airline analyst at Paribas Capital Markets.