Low-cost airline Virgin Express is to set up an operation in the Republic which will initially employ 30-40 people. The group, which is currently based in Brussels, says it will launch flights from Ireland but has not yet decided on routes.
Industry sources said yesterday that Virgin was unlikely to go head to head with Ryanair, another low-cost operator. However, Virgin says it competes on all the routes it flies and will seek out opportunities here.
Virgin wants to transfer operations to Ireland, as reported in yesterday's Irish Times, because it believes labour costs in Belgium are high and Government and union interference are excessive.
A spokesman for Virgin told The Irish Times that the company would base much of its administrative activities in Ireland. This would include setting up facilities for recruiting and training pilots and cabin crew. He said the company was currently seeking key staff including a general manager to head up the Irish operation.
The spokesman said there was a serious shortage of suitable staff in Belgium; Ireland also had a more attractive fiscal and regulatory regime. He said it had not been decided exactly where the company would locate, but Dublin or Shannon were the most likely locations.
The company's aircraft maintenance work is currently carried out by TEAM, soon to become FLS, in Dublin and the capital is thought to be the most likely location.
The Virgin spokesman said the company would be applying to the Irish Aviation Authority for an Irish air operator's certificate within the next 15 days. This would allow it to transfer its headquarters and employment contracts to Ireland, while continuing to fly most of its scheduled services out of Brussels.
An aviation authority spokesman said it was aware of Virgin's interest but the company had not yet applied for a licence.
The Virgin spokesman said the company would not be pulling out of Brussels completely. Around 40 per cent of its business is done directly from there.
Virgin Express was listed on the Brussels Stock Exchange and the Nasdaq last year. It is 51 per cent owned by Mr Richard Branson's Virgin group. It has operated from Brussels since buying Euro-Belgian airlines, a charter operator, two years ago.
The airline flies scheduled and charter services in Europe and operates between London and Brussels under an agreement with Sabena. Industry sources said last night that they felt Virgin's signalled intention to locate in Ireland was "sabre-rattling" in a bid to get a better deal in Belgium.
However, the Virgin spokesman dismissed this, saying the company was "too far down the road" on the project. He was non-committal on the issue of taking on Ryanair, saying the company would exploit opportunities on any route it saw them.
