The latest statement by Brett Godfrey:
BRISBANE (Dow Jones)--Richard Branson's cut-price Australian airline Virgin Blue said Monday that talks with Lang Corp. are centered on the stevedoring and transport company possibly becoming a cornerstone investor in the airline.
Speaking to Dow Jones Newswires in an interview, Virgin Blue Chief Executive Brett Godfrey said the talks aren't conditional on Lang succeeding in any move to acquire the terminals of distressed rival Ansett Airlines.
While an alliance with Lang, under which Lang brings with it Ansett's terminals, would allow Virgin Blue to make an early grab for much of Ansett's former 38% share of the Australian market, Godfrey said Virgin Blue has other options to consider.
"They (Lang) felt that if we wanted to double the size overnight we might need to move into those terminals," Godfrey said. "Now that is something we haven't said no to, but it may not be our first option.
"Our existing facilities are ample to enough to deal with our growth for the next 12-15 months at least," he said.
Ansett had 38% of the domestic market when it collapsed, with bigger rival Qantas Airways Ltd. (A.QAN) since boosting its 55% stake to as much as 90%.
Virgin Blue has about an 8% share of the market and is aiming to more than double that.
"A Dozen Parties Interested"
While Virgin Blue and Lang are "keen" to pursue talks, Godfrey said Lang is "far from being the only partner."
"We have spoken to Lang Corp., but we have a dozen parties interested in taking a cornerstone investment in the business," Godfrey said.
Any sale of Ansett's terminals to Lang would be dependent on the administrator failing to secure a buyer for the airline as a going concern.
Arthur Andersen is lobbying the government for a A$195 million grant to cover Ansett workers' entitlements as a way of attracting a buyer. Interested buyers include a buyout group including pilots and engineers, and a consortium led by high-profile Australian businessmen Lindsay Fox and Solomon Lew.
Virgin Blue is seeking a cornerstone investor to take up to 49% of the airline, ahead of a plan to publicly list part of the company late next year. According to media reports, a listed Virgin Blue has been valued anywhere between A$500 million and A$1.6 billion.
A roadshow led by Godfrey and the airline's investment banker Goldman Sachs starts Tuesday.
Godfrey said Virgin Blue is on track to almost double its fleet to 20 aircraft from eleven by mid 2002.
Virgin Blue has four Boeing 737-800s being fitted out in Seattle, with the first of these expected to leave this week, followed by another next week and the other two in early December.
It also has an additional 10 new Boeing aircraft that will be introduced progressively next year, comprising four more 737-800s and six 737-700s.
"We'll be at 20 comfortably before the half year," Godfrey said.
The new aircraft include in-flight entertainment systems that suit them to Virgin Blue's planned new longer-haul routes to Perth, Darwin and eventually New Zealand.
Godfrey said the worldwide downturn in the aviation industry following the Sept. 11 terrorist attacks in the U.S. has allowed Virgin Blue to negotiate cheap lease agreements.
"We've got deals that are about 30% down on where they were before September 11," Godfrey said.
-By Andrew Trounson; Dow Jones Newswires; 61-3-9614-2664; email@example.com