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Virgin Plans Business-Only U.S. Flights in 2008

Virgin founder Richard Branson plans business class-only flights with a fleet of up to 15 new planes, in a move which could spell trouble for upstart rivals in the competitive transatlantic market.

"In the next 12 to 18 months we will start a business-only airline," a Virgin spokesman said on Monday. "We'll serve New York initially and then other U.S. cities."

Newly created EOS, MAXjet and Silverjet all use business-class-only aircraft and offer competitive fares in the lucrative business-class market linking London to the United States.

But heavyweights Virgin Atlantic and British Airways are looking to fight back, spurred by an Open Skies pact between Europe and the United States which is to come into effect on March 30, 2008, and threatens to bring more competition to their London home market.

Virgin plans flights to New York from Paris, Amsterdam, Frankfurt, Milan and Zurich, as well as from London, though Virgin is staying mum about which London airport it will use.

Frequent flyer programs and the ability to tap into U.S. domestic flights operated by Virgin America due to begin next month would be advantages over small, upstart carriers, the Virgin spokesman said, adding the new Virgin airline would aim to meet or beat rival fares.

British Airways, which makes the bulk of its profits on business flights across the Atlantic, is also studying the idea of business-only services.

Virgin will look at acquiring up to 15 planes worth $700 million at list prices, the spokesman said.

"We may use some of the (Boeing) 787s we ordered recently," he said, but added the airline was speaking to all four airliner makers -- Boeing , Airbus, Embraer and Bombardier.

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