The Australian
Steve Creedy, Aviation writer
14dec06
FARES across the Pacific are set to fall after Australia's third international airline was cleared for take-off yesterday - but it will be late 2008 before travellers reap the rewards of increased competition.
The airline, owned by Virgin Blue, has yet to set ticket prices but one analyst said it could slash basic fares to the US by 25 per cent and by as much as 40 per cent during sale periods.
The US route is one of Qantas's most lucrative, with only the flying kangaroo and United Airlines currently flying directly to the mainland.
Virgin Blue's board gave the as yet unnamed long-haul carrier the green light after a feasibility study and a strong improvement in the performance by the domestic carrier.
Subject to regulatory approvals and a successful conclusion of negotiations with aircraft manufacturers, the $70million project will see the new carrier initially fly daily services to the US west coast and possibly some Asian destinations.
The new airline is looking at wide-body planes capable of flying non-stop to the US, such as the Airbus A340-600 and the Boeing 777-300ER.
The planes can carry between 420 and 450 passengers more than 14,000km in a two-class configuration, the seating arrangement used by Jetstar International.
Aircraft manufacturers Boeing and Airbus have been holding open slots in their production schedules to supply seven planes, pending final talks.
Virgin Blue chief executive Brett Godfrey told staff yesterday the new airline would probably be set up as a stand-alone operation with its own air operator's certificate.
He said this would allow the company to keep the Virgin Blue domestic airline "corralled" to protect it fromthe long-haul venture's "highly risky and speculative" operations.
"Flying just one rotation from Sydney to Los Angeles will incur a cost of circa $500,000," he said in a staff memo.
"This is the equivalent level of risk we incur every day by flying 50 flights between Sydney and Melbourne."
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http://www.theaustralian.news.com.au...6-2702,00.html