Paul Phelan/CAIRNS
Virgin Group owner Richard Branson unveiled plans in Sydney at the end of November for a low-cost Australian domestic airline in the style of Europe's Virgin Express.
Branson says he hopes to have his new no-frills airline, provisionally titled Virgin Australia, fully operational well before the Sydney Olympic Games in the last quarter of next year. On trunk routes such as Sydney-Melbourne, the proposed A$100 ($63) single fares would more than halve discounted ticket prices. The airline will go head to head with Qantas, and Branson's announcement knocked A$871 million off the Australian flag carrier's share value overnight.
The UK entrepreneur held a secret weekend "lock-up" with tourism and aviation authorities in Sydney before detailing Virgin's plans and then met Australian Prime Minister John Howard and transport minister John Anderson. Branson says he sees "no problems" in obtaining space at Australian airports, and that he has assurances that the Australian Government would invoke anti-competitive activity rules to ensure fair competition.
Virgin plans to start with five Boeing 737-300s on key Australian routes, but to serve virtually every Australian city with a population of over 50,000. Branson says the airline will sell at least half its capacity on the key Sydney-Melbourne and Sydney-Brisbane routes at under A$100, more than halving the cheapest current fares.
After their success in the USA, low-fare airlines have begun to catch on in Europe in recent years with Ryanair, Virgin Express and easyJet leading the way. The concept has yet to be developed in Australasia, however. It is not clear if Virgin will launch with a "clean sheet" or take-over an airline as it did with Virgin Express in Brussels.
Virgin Atlantic does not serve Australia in its own right, although it does have a codeshare via Hong Kong with Ansett Australia. The airline has considered a London-Sydney service, but is wary of going head to head with Qantas and British Airways. "We would love to do it. It's our last big ambition and the most difficult," the airline says.
Source: Flight International
