Hub may be off Virgin USA radar

Richard Branson scratched Boston off the list of potential headquarters sites for his US airline start-up, Virgin USA, after a nearly yearlong pursuit by city and state officials.

At a business conference in New York, the flamboyant billionaire named New York and San Francisco as the finalists.

The airline promised to create as many as 1,400 jobs if it started up in Boston.

For months, Virgin USA officials have been saying that Boston, San Francisco, and Dulles, Va., a suburb of Washington, D.C., were the finalists.

Even as Branson said Boston was out of the picture, other company officials said the city's chances were not entirely hopeless. Lori Levin, Branson's spokeswoman, confirmed his statements but said they did not necessarily mean that Boston was out of the running. She said, final word will come from Frederick Reid, the former Delta Air Lines president who was tapped in March to be Virgin USA's chief executive.

"You've got a broad statement from our chairman, but at the end of the day Fred Reid will be heading up this airline in the states, not Richard Branson," Levin said. "Right now were worried about raising the equity, finding the investors and making it the best airline we can."

After the conference, Branson flew out of New York and could not be reached for comment, Levin said.

Officials in Reid's New York office did not return several calls seeking comment yesterday.

Dan Kasper, an aviation analyst at consulting firm LECG LLC in Cambridge, said it appears that Boston has lost. "The fact is that if Branson himself says it's between New York and San Francisco, then that doesn't bode well for Boston," Kasper said.

Boston and Massachusetts officials have spent months trying to win over Virgin executives with a $1.5 million economic incentives package. City leaders and the Massachusetts Port Authority, which runs Logan International Airport, were promising office space in the Boston Marine Industrial Park, on the South Boston Waterfront and near Logan. The space is owned by the Boston Redevelopment Authority. Virgin was interested in building flight simulators near the industrial park.

Local officials yesterday said they don't think Boston is out of the running, saying they've been in contact with Virgin executives in recent weeks and have not been told that the city lost out.

"We have not been notified that we are not in the running," said Susan Elsbree, a spokeswoman for the BRA. The agency is leading a team that included Boston Mayor Thomas M. Menino, representatives of Governor Mitt Romney, and officials from Massport.

"What they had been telling us is that they're working on different parts of the business deal, and that right now, the headquarters search isn't their main focus," Elsbree said.

Sarah D'Souza, a Romney spokeswoman, said the governor's office also had not been told that Boston was eliminated.

Branson's comments came as part of a summit between US and European entrepreneurs hosted by US Treasury Secretary John Snow and his British counterpart, Gordon Brown.

There are other issues for the airline. Branson has not yet disclosed who his partners in the airline might be. Under US law, a foreign citizen cannot own more than 25 percent of a domestic airline and have no more than 49 percent voting control. In addition, Branson said yesterday, he is negotiating with Airbus and Boeing to buy airplanes for the carrier.

Keith Reed can be reached at reed@globe.com.