Branson to start Virgin Russia

The man that brought you Virgin Atlantic, Virgin America, Virgin Blue, Virgin Nigeria and others is preparing to do it again.

Billionaire Richard Branson has announced plans to start an airline in Russia, tentatively called Virgin Russia. He plans to take advantage of the oil-fueled Russian economy, which has given the average Russian more money (and an airline market that's growing at around 10 percent a year). "We hope to offer the Russian people a really good airline. We may be able to do it a little better than is being done at the moment," said Branson. "We're in discussion with two or three partners." Branson also noted that there are "150 million people here within a three-hour flight from Moscow."

Branson certainly faces some challenges in his new endeavor. He'll be taking a swipe at state-run carrier Aeroflot, and is seeking "two or three" Moscow-based local carriers to team up with him, although he has said that his partners don't necessarily have to be airlines - "what we are looking for is people we can trust, people we could work with," he said. The Moscow Times identified several possible partners as Russian startups SkyExpress and Red Wings.

And Aeroflot is currently dominant in Moscow, which isn't planning that to change. Aeroflot Deputy CEO Lev Koshlyakov said that the "Russian market is competitive and is attracting more and more interest, with various business models... A new player coming in will make everyone mobilize their resources." And Aeroflot CEO Valery Okulov asked, "Why should we fear competition? We have always struggled with competition, so what do we have to fear?"

The Russian government also has to be dealt with. It has been notoriously hostile to certain foreign investment (e.g. some oil projects), and although there's no indication that the government would block a Virgin investment, Branson should definitely keep this in mind.


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