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V Australia kicks off second phase expansion

Virgin Blue CEO, Brett Godfrey
Virgin Blue CEO, Brett Godfrey

V Australia is moving to address the most attractive long-haul routes on which Qantas has had a very powerful and lucrative position. South Africa has performed very well for both Qantas and South African Airways, although V Australia's arrival will significantly undermine the yields that this duopoly has enjoyed. With the Phuket routes from Brisbane and Melbourne, V Australia is throwing down the gauntlet to Jetstar.

The Virgin Blue international offshoot plans to launch services to Phuket (from Brisbane and Melbourne) and Johannesburg (from Melbourne) in Nov/Dec-2009 and Mar-2010, respectively – all routes with no other airline present.

Virgin Blue Airlines Group Chief Executive, Brett Godfrey, stated, “we believe our new destinations offer very exciting opportunities.” The airline is set to take delivery of its fourth B777-300ER aircraft shortly, which will offer a three-class configuration.

V Australia will launch twice weekly Brisbane-Phuket service from 22-Nov-2009, which removes the transit stop for many Australian tourists to the resort destination either in Sydney (to use Jetstar’s three times weekly service) or Bangkok (using Qantas/Thai Airways). Additionally, once weekly Melbourne-Phuket service is scheduled to commence on 03-Dec-2009, in time for the peak Australian holiday season. It will be interesting to see if Jetstar responds.

Melbourne-Johannesburg service will commence on 13-Mar-2010 (in time for the FIFA World Cup in Jun-2010). Frequency plans have not been disclosed. Connecting flights will be available from other key Australian ports to both Johannesburg and Phuket. Qantas operates six times weekly non-stop service on the Sydney-Johannesburg route with B747-400 equipment, codeshared with South African Airways (SAA). SAA offers five times weekly Johannesburg-Perth service, also codeshared with Qantas.

Melbourne-Los Angeles from Dec-2009

V Australia will also step up its trans-Pacific expansion, adding twice weekly Melbourne-Los Angeles service from 01-Dec-2009. Qantas flies daily non-stop service on the route, while United offers one-stop codeshare service with connections via Sydney. V Australia already serves Los Angeles from Sydney (daily) and Brisbane (three times weekly) with B777 equipment. V Australia is confident of approval of its JV agreement with Delta Air Lines on the Pacific route.

Fiji plans brewing

The carrier is also targeting Fiji, although route plans have not been announced.

V Australia last week applied to the International Air Services Commission (IASC) to operate services to Fiji from Dec-2009, requesting an allocation of 1,267 seats per week. The Virgin Blue Group also plans to transfer an additional 1,260 seats from Pacific Blue to V Australia for the service.

The Commission has meanwhile allowed Pacific Blue to transfer 720 seats per week on Indonesian services to Pacific services, provided the carrier utilises the capacity by 01-Apr-2010.

Virgin Blue’s share price has soared in the past week, closing on Friday at AUD0.38 – almost double the discounted offer price of AUD0.20 under its recent capital raising.

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