Virgin Blue is here to stay.
Virgin seeks alliances
From AAP
09dec01
BUDGET airline Virgin Blue is negotiating with a number of international carriers about possible alliances, Chief Executive Brett Godfrey said.
"We're in negotiations with a couple of very interesting overseas players at the moment," Mr Godfrey said today.
"I reckon by Christmas, we'll probably announce a couple of deals with major carriers.
"It will certainly disappoint or surprise the Ansetts of this world who we're talking to."
Unlike traditional international alliances, Virgin is looking at arrangements which will allow the international carriers to handle their own passengers at Virgin terminals in exchange for "a super deal".
Aviation experts consider a lack of an international arm one of the biggest stumbling blocks for Virgin Blue's assault on the dominance of Qantas.
Mr Godfrey was talking to journalists on the inaugural Virgin Blue flight from Melbourne to Perth today.
Virgin Blue will also start flying to Darwin this month, finally giving it status as a national airline.
Part of the Richard Branson Virgin empire, the airline is still targeting a public listing by around September or October next year.
"If we obtain the numbers that I think we can obtain this year at a March year end, then I'll feel comfortable that we can go to the market based on our 2003 earnings," Mr Godfrey said.
He would not give a prediction for 2003 but is confident of meeting market predictions of $30 million in earnings for 2001-2002.
"With the number of planes we have in the air next year, our forecasts are significantly higher than that.
At the moment, Virgin Blue has an agreement in principle to sell a majority stake in the airline to stevedoring group, Lang Corp.
"Lang would allow us to grow more quickly and realise our full potential earlier," Mr Godfrey said.
The deal hinges on whether the Lew-Fox consortium wins control of the Ansett business.
Even if Virgin is unsuccessful in taking control of the troubled airline's assets, Mr Godfrey believes there is still room for a deal between the two groups.
"It's very possible ... they've got a good record and their business ideas are very aligned to us," he said.
"Conceptually there would be something even if this deal doesn't go ahead."
Virgin Blue is also considering branding arrangements with some regional airlines.
"We're contemplating doing that with some of the regional players who are putting consortiums together," Mr Godfrey said.
"We wouldn't own them but we would infuse our culture and our cost base and our management ... and they would pay royalties for that privilege."
The airline has already aligned itself with two parties in WA and South Australia who are bidding for the Ansett regional services.