International Airlines Share News (IAG)

By Sarah Young

LONDON, March 7 (Reuters) - Virgin Atlantic's chiefexecutive said he was confident a deal would be done to secureBritain's flying rights after Brexit, as the airline launched anextra legroom economy seat to try to stand out from the crowdamid intense competition.

British airlines want to be able to continue to benefit fromEuropean Union flying rights after Brexit, and the Britishgovernment has said it will try to secure an open-access deal,but a recent Financial Times report suggested the UK wasencountering problems in its negotiations.

Craig Kreeger, the CEO of Virgin, which primarily fliesbetween the UK and North America, said he believed Britain wouldsecure a deal similar to what it already has under the EuropeanUnion-United States Open Skies agreement.

"I’ve heard from both governments, I remain completelyconfident that we’re on track, to work, through whatever ittakes to have, to be able to fly, in an Open Skies-like way," hesaid in an interview with Reuters.

Kreeger was speaking as Virgin Atlantic on Wednesdayannounced that it would refit the cabins of its Boeing 787Dreamliners to offer a new type of economy seat with legroom of34 inches (86 cms), bigger than the 31 inch economy offering.

Virgin also said it would offer an "economy light" ticketwhich excludes checked luggage.

It gave no information about ticket prices, with the newseats not available for sale until Spring.

The new offering comes amid tough competition on thetrans-Atlantic route, with low-cost carriers such as NorwegianAir Shuttle, Canada's Westjet and Iceland'sWow Air all stepping up expansion between North America andEurope.

"There isn't any question that trans-Atlantic flying hasbeen changing over the last few years and being able to offer anew lower fare is something we think will enhance our ability tocompete," Kreeger said.

IAG, the owner of Virgin's old rival BritishAirways, is also in on the action, launching a low-costlong-haul unit called Level last year, while Lufthansahas been expanding its Eurowings brand, and U.S. carriers haveintroduced fares that don't include baggage or seat selection.

Virgin said the refitting of its cabins was underway and thecost of taking out six seats to make space for the new biggerleg room economy class was "not material".

The new 34-inch legroom seat on Virgin will give passengersan option in between economy and Virgin's premium economy seat.

British Airways and Norwegian also offer economy seats with31 inches of legroom. Both British Airways and Virgin offerlegroom of 38 inches in their premium economy, while Norwegian'spremium cabin has legroom of between 43 and 46 inches.

Last year, Virgin Atlantic said Air France-KLMwould buy 31 percent of the airline from Richard Branson'sVirgin Group, making it the second largest shareholder afterU.S. airline Delta, which owns a 49 percent stake, and reducingVirgin Group's stake to 20 percent. That deal has not yetcompleted.($1 = 0.7206 pounds)(Reporting by Sarah YoungEditing by Adrian Croft and Alexander Smith)