Virgin In Asia
Virgin in Asian talks
By Michael Sainsbury and agencies
June 14, 2004
VIRGIN BLUE is keen to follow domestic rival Qantas into the developing low-cost Asian market and has already held talks with a number of prospective partners.
"We do want to have a look in this part of the world," Virgin Blue chief executive Brett Godfrey said.
Qantas announced in April that it would invest $40 million for a 49 per cent share in a low-cost Asian airline with Singapore's state-owned investment company Temasek Holdings, and two businessmen, which has been dubbed Jetstar Asia.
Mr Godfrey said: "I have spoken to many airlines and carriers but we are particularly fussy as to what interests us.
"So it may not be today, it may not be next year. It may be within two or three years but I would like to think there are opportunities for us here."
According to International Air Transport Association statistics, the market share of budget carriers in the Asian market is only 2 per cent, compared with 16 per cent in Europe and 23 per cent in North America, indicating a lot of room for growth.
Officials of Malaysia's no-frills carrier AirAsia confirmed discussions with Virgin Blue.
Singapore has become a focal point for low-cost airlines this year this year, with Singapore-owned ValuJet Thai planning to launch ValuJet Singapore and Singapore Airlines laying plans for its own low-cost carrier, called Tiger, later this year.
Qantas will have a head start on Virgin Blue as it is aiming to begin commercial flights by the end of this year.
But Mr Godfrey said "a head start in the airline business never lasts you too long".
"Most of the markets which we would ultimately serve probably don't exist yet because there is no airport, or there is no one that lives there that can afford to fly, but that's all changing."
He said the economies of China, India and other Asian countries were growing at such a rate that people who now cannot afford the cost of a budget airline ticket would be able to do so in five or 10 years.