KEY POINTS:
SYDNEY - Virgin Blue could multiply into three different airlines in the next five years as the carrier expands its capacity.
Virgin Blue yesterday announced a half-year net profit of A$124.3 million ($139.5 million), an 81 per cent rise on the previous first half, and also predicted a full-year result 60 per cent above the previous full-year's net profit of $A112 million.
Virgin Blue chief executive Brett Godfrey said the company was in exclusive negotiations with Boeing to acquire seven long-haul 777-300ER aircraft at a cost of US$2.6 billion ($3.7 billion).
The talks with Boeing were close to concluding, Godfrey said, and were evidence of Virgin Blue's confidence in receiving regulatory approval to fly the US route.
Virgin Blue had begun seriously considering the trans-Pacific route, he said, when the federal Government rejected Singapore Airlines' application to fly the route.
"The aviation review, which was quite a substantive review which was completed in February of last year, was the impetus for us to get going," Godfrey said.
"We said we weren't prepared to invest A$2.5 billion of equipment and many millions of dollars in equity investment if we were going to be squashed in start up, so the Government had given us [an indication] and made it clear that Singapore would not be given access."
Godfrey said it was too early to speculate about fares and destinations, but he said the airline wouldn't necessarily fly to Los Angeles.
He also confirmed that a new brand would need to be launched and the new international carrier would operate independently of Virgin Blue.
On the domestic front, Godfrey confirmed that Virgin Blue would continue courting the corporate market and seek a larger slice of Qantas' customers. But the focus on budget travellers would not cease and the company was considering the launch of a new low cost carrier.
"Virgin Blue has moved off the market being a pure LCC [low cost carrier] and we think it's quite prudent now to consider whether or not Virgin Blue should even establish its own low-cost brand, its own ultra-low-cost LCC."
Godfrey stressed that the LCC proposal was purely conceptual at this stage.
- AAP
