Virgin undeterred by brand blue
Mon "Australian Financial Review"
Virgin undeterred by brand blue
Jul 28
Jane Boyle
Virgin Blue plans to launch international flights later this year under a different brand because of opposition by Singapore Airlines to the use of the Virgin name for its expansion.
The low-cost carrier is also considering setting up a New Zealand subsidiary if mutual recognition of safety regimens on either side of the Tasman puts Australian carriers at a competitive disadvantage.
Virgin Blue boss Brett Godfrey said his airline would fly, or at least sell tickets, to one or more of its target destinations - New Zealand, Fiji and Vanuatu - by Christmas.
Singapore Airlines is believed to have opposed the extension of the Virgin Blue brand to international routes for competitive reasons. It has a say because it owns 49 per cent of Virgin Atlantic, which controls the use of the Virgin brand by airlines in Richard Branson's group.
"We're not going to wait any more," Mr Godfrey said.
He expected that Virgin would secure an international air operator's certificate within six to eight weeks.
The airline was still deciding whether to establish a separate subsidiary or to just use a different trading name for international flights.
Much would depend on whether mutual recognition came into effect at the end of this year. Industry watchers believe it may provide advantages for NZ carriers as NZ rules, for example, require lower cabin-crew-to-passenger ratios than do Australia's.
Qantas is already extending its NZ subsidiary Jet Connect onto Tasman routes from September, taking advantage of NZ's lower labour costs.
"We feel if we are going to go down the path of mutual recognition, we are going to have to play the game as well," Mr Godfrey said.
Mr Godfrey said planning was well under way for a public float of Virgin Blue by the end of the year. Joint owners Patrick Corp and Virgin Group must negotiate a structure after an independent arbitrator ruled new shares in Virgin Blue could not be issued without Patrick's consent.
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