Virgin America gains backing of former UA chief

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The Independent Online

Virgin America, Sir Richard Branson's low-cost US air carrier, looks set to go ahead with the financial backing of a former chief executive of United Airlines.

Sir Richard is understood to have secured the backing of Greenbriar Equity Group, a New York-based investment company that specialises in transport deals. One of Greenbriar's founders is Gerald Greenwald, a former chairman and chief executive of United. Proceeds from the float of Virgin Mobile in the UK last week are also going towards building up the airline in the United States, as will those from floating the Virgin Blue airline in Australia last year.

US law prevents more than 49 per cent of the equity and 25 per cent of the voting rights of an airline being held in foreign hands. Sir Richard's team in the US has been seeking investment from external partners and it is understood that Greenbriar got approval last week to head a consortium of investors that will take a 51 per cent stake.

Virgin America plans to start domestic flights in the US early next year.

The company is close to placing a $5bn (£3bn) order for about 30 new aircraft for the Virgin Atlantic business, which Airbus looks set to win after a bitter competition with Boeing. Virgin America has 33 Airbus aircraft on order, with options for a further 72.