Pacific Blue stays out of Auckland

By CHRIS DANIELS aviation writer

Unsustainable competition on the Tasman route means Virgin Blue subsidiary Pacific Blue will not be flying from Auckland to Australia any time soon, though New Zealand domestic services may be on their way.

Announcing a full-year net profit of A$158.5 million ($183.2 million), Virgin Blue chief executive Brett Godfrey said that Pacific Blue would start flights from Australia to Fiji and Vanuatu in September, with other new destinations announced in the first half of the 2005 financial year.

Pacific Blue would "continue to expand" its transtasman services, though it would "remain a spectator" on the Sydney-Auckland route, since other routes offered better returns.

The airline flies from Christchurch to Sydney, Brisbane and Melbourne, and from Wellington to Sydney.

Domestic New Zealand operations were "under consideration", Godfrey said, with the company looking at starting up in the fourth quarter of this financial year - early 2005.

This time frame was dictated by new planes coming into the fleet.

"But I'm not raising any expectations there - those two aeroplanes are unallocated and subject to how things pan out in New Zealand with airport access and other opportunities. We will put them into the markets where we see the best opportunities."

As for the financial viability of its New Zealand operation, Godfrey said the company was "reasonably happy with the loads - the loads are better than expected, the yields were softer than expected".


In the past Godfrey has said the competitive transtasman market, particularly from Auckland, was unsustainable. He said yesterday that Auckland was "very messy for all concerned", but this did not matter for Virgin, which did not fly the route. Yet.

"We'll cherry-pick and when the right opportunity comes I believe we'll get into those markets, but it's not today, it's a totally irrational market there and it's smarter to steer clear of those things, for the reasons that you want to maintain your margins.

"That's a market we purposely stepped away from, as we did Sydney to Melbourne to begin with. When the time is right - and the time will become right, we have no doubt that we will enter those markets, and also look at domestic opportunities which we are looking at this stage to be able to offer in the fourth quarter."

The parent of local airline Pacific Blue, Virgin Blue was floated and listed on the Australian Stock Exchange (ASX) in December last year. Since the collapse of the Air NZ- owned Ansett, Virgin Blue has been able to snare 30 per cent of the Australian aviation market, though has only slowly added flights to its New Zealand wing.

Virgin Blue is 25 per cent owned by the international Virgin Group, with another 45 per cent owned by Australian transport conglomerate Patrick Corp.