Virgin Express [Euronext Brussels: VIRE; OTC Bulletin Board: VIRGY] announces that it is stepping back from its plans to commence flights from Köln-Bonn airport this winter and will instead concentrate on its operations from Brussels Airport. It will continue to strengthen its position as the largest Belgian carrier and to maintain its reputation as an on-time airline, building on its existing profitability.

Earlier this summer Virgin Express said that it would start a low cost operation at Köln-Bonn airport in December 2002. This decision was taken because market analysis showed that the region of NorthRhine Westphalia was deprived of low fare scheduled air travel. Shortly after the plans of Virgin Express became known, both TUI and Lufthansa announced that they would create low fare carriers, also to operate out of Köln-Bonn. They have stated that their subsidiaries will be loss making for the next two to three years, indicating that the German giants are prepared to enter into a severe fares war.

Having taken into account these new developments, the Board of Directors of Virgin Express has decided that to open a second base in such a hostile trading climate would be unwise.

David Hoare, Executive Chairman of Virgin Express, commented:” Our decision to continue our operational focus in Brussels and hold back on Köln-Bonn is based on common sense. We believe that a fares war in the Köln-Bonn market is inevitable, with the new entrants fighting for market share, whilst protecting their base businesses. This will be good for the German travelling public who will at last benefit from low fare scheduled air travel. However, our participation in the changed circumstances existing in the German market would have been unprofitable for us, even with our low cost position. We will continue to keep a close eye on the development of this market. If the new low fare carriers do not live up to the promises they have made, we will review our position.”

Virgin Express is the largest carrier at Brussels Airport and operates 14 Boeing 737s. It offers flights from Brussels to a wide variety of major European destinations: Athens, Barcelona, Copenhagen, Faro, Geneva, Gothenburg, Lisbon, London-Heathrow, Madrid, Malaga, Milan, Nice, Rome and Stockholm. Virgin Express made a profit of EUR 130,000 in 2001 and is again forecasting profit for 2002.

With 90.6% of its flights on time since the beginning of 2002, Virgin Express is Europe`s most punctual airline.

——-