Virgin orders ten Airbus jets

By John Bowker

LONDON (Reuters) - Virgin Atlantic VA.UL will take delivery of 10 new Airbus A330-300 aircraft between now and 2012, and also is in talks with Airbus (EAD.PA) to buy 50 A350 aircraft from 2014.

The new deliveries will allow Virgin to expand while awaiting delivery of Boeing's (BA.N) 787 Dreamliner.

The 25-year-old airline, controlled by Richard Branson's Virgin Group, told Reuters ahead of an official announcement at Heathrow airport that the 10 aircraft were worth $2.1 billion (1.28 billion pounds).

"This will help us with future growth, taking us to new destinations such as Beijing and Vancouver," Branson told a news conference on Monday. "We have had some good years and have accumulated some cash."

Dutch plane-leasing company AerCap Holdings (AER.N) said in a separate statement it would purchase and lease back six aircraft that Virgin has ordered and would lease the remaining four directly to the airline.

Five of the wide-body aircraft will be delivered in 2011, the other five in 2012, Virgin Atlantic said. Airbus is a unit of pan-European planemaker EADS(EAD.PA).

Virgin -- 49 percent owned by Singapore Airlines (SIAL.SI) -- said it remained a customer of Boeing and its order for 15 of the 787 Dreamliners remained intact, but it needed the extra capacity while it awaited delivery of aircraft whose development has been beset by delays.

A Virgin spokesman said later on Monday that the company also was in talks with Airbus (EAD.PA) to buy 50 A350 aircraft from 2014.

The spokesman said it considered the A350 a "strong competitor" to the Boeing 787 and added it was not yet clear how many of the aircraft would be replacements for older planes.

Virgin's announcement comes amid a major downturn in the airline industry and follows a meagre number of orders at the flagship Paris Air Show last week.

NO BAIL-OUT

Branson said conditions were so bad one or two big carriers may go bust and pleaded with governments worldwide not to bail them out and to allow younger airlines to take their place.

"Carriers with older planes, with a cost base out of control, should not necessarily last forever," he said. "As old trees come down, new saplings start growing."

Branson reiterated his weekend comments that arch rival British Airways (BAY.L) should not be rescued by the government were it to go bust -- a scenario BA dismissed as a fantasy.

The two airlines both operate out of Heathrow on the fiercely competitive trans-atlantic routes and Branson has long been a thorn in BA's side.