Richard Branson said Virgin Atlantic plans to commence flights between Australia and Hong Kong in 2003.
Speaking to reporters today (Wednesday), Branson said talks were ongoing for Virgin Atlantic to fly from Hong Kong to "one or two major cities in Australia next year".
The move would link with Virgin Atlantic's London-Hong Kong service, providing competition on the Australia-London route dominated by Qantas Airways and British Airways.
Branson said today's agreement on Virgin Blue's access to the former Ansett terminal at Sydney Airport will provide a valuable platform for domestic expansion.
"It really does mean that we can be a head-on competitor to Qantas and our aim reaching 50% of the market one day is a realistic one," Branson said.
He said the terminal's facilities would also strengthen Virgin Blue's pitch for business customers, although it remained committed to its single-class, low-cost model.
Branson said Virgin Blue would send tender documents to 18 Pacific rim airports on Friday then select about six destinations for an expansion program in the region beginning in mid-2003, with Bali "still very much on our list" despite the bombings last month.
"You're as safe in Bali today as you would be in Sydney or Melbourne or London - I for one will be going to Bali on holiday next year," he said.
Virgin Blue chief executive Brett Godfrey said the airline was also keen to expand its services to include New Zealand, but only if New Zealand competition authorities blocked Qantas' bid to buy 25% of Air New Zealand.
"We won't go to a gunfight where there's two people and someone's pointing a gun at our back," Godfrey said.
Branson said he does not expect Singapore Airlines to enter the Australian domestic market.
"I don't think that's a serious likelihood now ... if they were going to do it they probably would have done it by now," he said.