I was going to post this a few days ago... but I forgot. Heheh.
Virgin to head for the west, fares south
By GEOFFREY THOMAS
Friday 27 July 2001
A savage fare war is expected to start on east-west air routes as confirmation comes that Virgin Blue is close to announcing Perth flights.
Insiders at Virgin Blue headquarters in Brisbane confirmed yesterday that Perth flights would start before the end of the year. Chief executive Brett Godfrey said the airline was looking at new cities, including Perth, as new aircraft were being delivered.
Owner Sir Richard Branson promised Perth residents a Sydney-Perth service with one-way fares as low as $167, when he launched the airline in 1999. That fare is $53 below the best sale fares that have been available on that route from Ansett and Qantas.
But Mr Godfrey is keeping an announcement on new routes close to his chest, claiming that as soon as the airline announces something, suddenly Qantas decides it can double the capacity.
"There is no use pre-empting or playing our hand at this stage," he said.
Virgin Blue expects to make an announcement before the end of August on new routes.
Air travel has boomed around Australia and air fares have been at all time lows because of the stimulus of Impulse and Virgin Blue, although most discount passengers have travelled on Qantas and Ansett.
On the Brisbane-Sydney route, traffic has jumped 64 per cent, while Virgin Blue sent traffic soaring by more than 80 per cent on the Adelaide-Brisbane route earlier this year when it started flights.
Virgin Blue is now taking delivery of new Boeing 737-700 NG series aircraft but neither these nor the airline's 737-400s are allowed to fly non-stop between Perth and Sydney. This relates to range and technical issues surrounding the reliability performance of twin-engine operations.
With twin-engine aircraft, airlines are required to demonstrate a history of reliability of an aircraft type in airline operation over several years. While 737s are among the world's most reliable aircraft, each airline must demonstrate reliability in its own operations.
Both Qantas and Ansett have achieved that many years ago.
Virgin Blue's Boeing 737-700 NGs, sport a new wide-look interior and state-of-the-art cockpit.
Westralia Airport Corporation, owners of Perth Airport, has a submission before Virgin Blue for servicing Perth and is ready to discuss incentives to encourage the airline to fly to Perth. These could involved the State Government.
The plan is for Virgin Blue to start with overnight return flights to Perth from Adelaide, with passengers flying on to Brisbane, Sydney and Melbourne.
Mr Godfrey is confident his airline can keep offering budget air fares despite industry criticism that they are unsustainable.
"We have half the costs of Qantas or Ansett," he said.
Earlier this week, the Flight Centre suggested that Virgin Blue would not be able to survive unless it improved its yield. But Mr Godfrey scoffed at that suggestion.
Last month Virgin Blue made $500,000 profit for its first seven months of operation - almost $10 million better than its forecast $9 million loss. And business was only getting better, Mr Godfrey said.