Virgin Blue confirms February launch date from NZ

12.00pm

Virgin Blue said today its trans-Tasman service Pacific Blue Airlines will begin flying from Christchurch on February 1.

Chief executive Brett Godfrey said in a statement today that the airline would start off with an introductory price of $99, plus taxes and surcharges, to Queensland.

Pacific Blue will initially operate daily services between Christchurch and Brisbane, with plans to expand services between New Zealand and other key ports in Australia. The airline will also offer domestic services in New Zealand.

Mr Godfrey said Pacific Blue planned to hire about 200 staff during its start-up phase.

"Clearly the enthusiasm of the (Christchurch) airport, the tourism authorities, and of other key officials in Christchurch has given us the same level of confidence that we have in Queensland.

"There is no reason why New Zealanders should not benefit from the same type of competition that we have in Australia. Clearly Air New Zealand and now Qantas' sudden about-face on airfares would suggest that they know that the days of gouging the travelling public are over.

"While our services won't start today, we are glad to see New Zealanders already getting the benefit of real competition instead of being subject to a cosy duopoly," Mr Godfrey said.

After the launch special is finished, Virgin Blue would offer every day fares of $189, excluding taxes and charges, and flexible "walk-up" fares of $349, one-way.

Virgin Blue's New Zealand airline was called Pacific Blue because it was not allowed to use the Virgin Blue brand outside Australia.

Pacific Blue will operate its New Zealand head office and home base from Aviation House at Christchurch Airport.

Airport chief executive George Bellew said the arrival of Virgin Blue would open up a new travel market and inject millions of dollars into the region.

"We are committed to developing South Island tourism business opportunities and are delighted that Virgin Blue recognised the many benefits of operating from the gateway of the South Island," Mr Bellew said.

"Not only will this new airline improve options for South Island travellers, but it will boost employment, trade and tourism opportunities -- worth over $140 million to the South Island."

The fastest-growing airline down under, Virgin Blue started service in Australia on August 31, 2000, with a fleet of Boeing 737-400s.

Virgin Blue has been expected for some time to begin New Zealand operations, saying it would begin flying the Tasman whether or not the alliance between Air NZ and Qantas was approved.

Virgin Blue received clearance from the International Air Services Commission to fly to New Zealand in July, and began advertising for New Zealand staff this month.

The announcement is the second blow in two days for Air New Zealand, with Qantas announcing yesterday that its new one-way fares would be priced from A$179 ($205.22) excluding charges and taxes of A$64, between Sydney and Auckland, available every day of the year.

That matches the price and conditions set by Air NZ when launching its low cost carrier Tasman Express in August.

Qantas had already increased its New Zealand services in the past month, introducing flights from Queenstown to Auckland and 27 of its lower cost Jet Connect return flights on the trans-Tasman route.

Analysts had predicted Qantas would press on in its bid for trans-Tasman domination after Australia's competition watchdog last week torpedoed its proposed A$500 million alliance with Air NZ.

Air NZ said yesterday it expected its market share on the Tasman would drop below 30 per cent as a result of new entrants and increased competition.

Air NZ shares lost 2c to 53c.

- NZPA