County flying high on hopes of landing Virgin Air

SAN MATEO

The county is pulling out all the stops to convince the British-based Virgin Group Ltd. that the headquarters for the company's latest endeavor should be in the county.

The giant conglomerate, which has companies selling everything from Madonna CDs to international air travel, is on the hunt for a home for Virgin USA, a no-frills airline similar to Southwest and JetBlue.

The Peninsula has emerged as a finalist for a Virgin USA central hub, along with Boston, Philadelphia and Washington D.C.

County business and political leaders are scrambling to persuade the company to choose San Francisco International Airport for its flights and a nearby city for its offices, as the new low cost carrier could bring as many as 3,200 jobs over the next four years.

"We have a definite shot at it, but I think we have to make our case," said Deberah Bringelson, president and CEO of Samceda, a Peninsula economic development group. "Obviously we have competition from other cities because the cost of living is a little higher here, but California companies are also more productive."

The courting process began last week when SFO officials were contacted by the Virgin Group expressing interest in locating on the Peninsula.

Airport officials quickly called on Samceda to help assemble a promotion team -- boosters include state Sen. Jackie Speier, San Francisco Mayor Willie Brown, county Supervisor Mike Nevin, Oracle Vice President of Real Estate Randy Smith, as well as airport staff and other local business leaders.

Considering the airport's fledging passenger count, which dropped nearly 11 million in the last three years, there is little doubt that Virgin USA will be a welcome addition to an airport still struggling under the effects of a sinking economy, the United Airlines bankruptcy and the terrorist attacks of September 11, 2001.

"It would be terrific," said SFO Spokesperson Mike McCarron. "It would mean more jobs and more service."

McCarron said that the airport's new incentive plan that allows for a 50 percent reduction in landing fees for adding services, may have played a role in Virgin USA's interest. While the discounts were designed to attract all types ofair travel business, low cost carriers were among the first to jump on SFO's discount offer. AirTran Airways and America West recently added SFO to their flight list, and ATA Airlines recently expanded the number of flights into and out of the Bayside airport.

Even with the new additions, only roughly 15 percent of SFO's traffic is from discount airlines, while nationally, low cost carriers make up 25 percent of all traffic.

McCarron also noted that the carrier is searching not only for a place to land and take off, but a location to operate from -- meaning a whole host of factors from real estate costs to the quality of schools will play into the company's decision.

Virgin USA officials did not return calls for comment as of press time, but SFO proponents claim a Northern California location is attractive because of its highly-educated workforce, its business startup climate and transportation linkages such as the new $1.5 billion BART airport extension.

Even though San Francisco owns the airport, San Mateo County's financial health is inextricably tied to the airline industry as many jobs, tax revenues, local business and hotel revenue ride on the airport's fiscal wings.

Since Sept. 11, 2001, more than 5,000 local airport-related jobs have been lost. Last November's bankruptcy of United Airlines, the county's largest employer, also dealt a hefty blow to the local economy.

If located on the Peninsula, Virgin USA would likely fill up some of the Peninsula's persistently empty office space as well as hire local employees, which would strengthen the county's economy.

"I hope they strongly consider SFO," Nevin said. "It would give us a boost that we really need right now."