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Virgin Blue eyes South Pacific
By Geoff Hiscock
SYDNEY, Australia (CNN) -- Discount airline Virgin Blue has identified the South Pacific nations of Fiji, New Caledonia, Vanuatu and Papua New Guinea as potential destinations for its international services. Other possibilities include Indonesia, East Timor, Nauru, Tonga and Guam. All told, the airline sees 22 potential international destinations from a variety of airports in Australia and New Zealand. It sent "international expression of interest" documents to candidates throughout the region this week, seeking their response by the end of this month. Virgin Blue, the No. 2 Australian carrier, has been looking for some time at the trans-Tasman route to New Zealand, but is waiting to see if Qantas proceeds with an expected alliance with Air New Zealand. Virgin Blue already operates from 16 airports in Australia, including the key capital cities. It runs a fleet of 26 Boeing 737s and plans to increase this to 46 aircraft by March 2005. Joint ownership
Details for the fleet expansion plan are likely to be unveiled later this month. Virgin Blue is owned 50-50 by the Australian transport and logistics group, Patrick Corp., and British businessman Sir Richard Branson. During a visit to Sydney last Sunday, Branson said that a purchase of 30 to 40 new aircraft was the last issue to be bedded down before he proceeds with a float of his share of the airline in the first half of 2003. (Full story) Not all of those planes would be for Virgin Blue. Some may be for Branson's Virgin Atlantic airline, which plans to fly to Australia next year. Virgin Blue's Australia-based chief executive Brett Godfrey said Monday there was no timetable yet for a float, according to the Australian Financial Review. The newspaper quoted Godfrey as saying investment bank Goldman Sachs had begun documentation for a float, but several issues needed to be resolved, including potential new routes. Always tensionGodfrey, who addressed a group of airport managers in Adelaide on Monday, said there was always tension between airlines and airports. He said some investors had paid too much for airports bought during the government's privatisation program, which culminated with the $3.2 billion sale of Sydney Airport to a consortium led by Macquarie Bank in June this year. (Full story) Virgin Blue and Sydney Airport last week ended their bitter stoush over the cost of access to the former Ansett terminal at Australia's busiest airport. The two parties announced last Wednesday they had reached a long-term agreement which will see Virgin Blue passengers using the terminal, now known as T2, from early next month. (Full story) Godfrey urged airport owners to focus on their costs, their concessions and their efficiencies, rather than their fees. Shares in Patrick Corp are down 1.7 percent at midday Tuesday to A$13.81 on a day the broader market, measured by the S&P/ASX200, is down 0.2 percent. Macquarie Airports Trust is down 7.2 percent to A$0.90. It and other affiliates of Macquarie Bank hold a 53 percent stake in the Sydney Airport consortium.
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