Mar-21-2007  Virgin Blue orders six Boeing 777-300ER jetliners in a 1.5 bln usd ...(topic overview)CONTENTS:
REFERENCES  Virgin Blue Holdings Limited announced it has signed a $2.2 billion deal to buy six Boeing 777-300ER aircraft and options for six additional aircraft. The company said that the transaction represents a significant step in its plans to launch Australia's newest international airline and would eventually create over 1100 new jobs. [1] Qantas, Australia's leading airline, is facing increased competition on its lucrative route to the east coast of the U.S. after Virgin Blue, its domestic low-cost rival, announced Wednesday it would add six Boeing 777 aircraft to its fleet in order to start flying to America.[2] Mr Godfrey denied Virgin Blue had asked for flights from the U.S. three times a day. He said flights once a day at least were a necessity if the airline was to succeed. He said likely routes could be from anywhere along Australia's east coast to anywhere along the U.S. west coast, but declined to talk about airfares.[3] The carrier would launch the new international operation in 2008, focussing initially on flights between Australia and the U.S. west coast, Chief Executive Brett Godfrey said in a statement.' "We will create more Australian jobs, bring more tourists and provide choice and vigorous competition on the Trans Pacific route," Godfrey said.[4] Weve had great success with the Next-Generation Boeing 737 aircraft and we did extensive research into the selection of aircraft type for our new long-haul operation, Brett Godfrey, Virgin Blues chief executive said in a statement. The 777-300ER has proven its economic leadership and reliability, and these traits are crucial as we move out to build our new international product.[5] Virgin Blue chief executive Brett Godfrey described the signing of the contract as a significant milestone for Australian aviation. He said the decision to launch a new airline was based on the recommendations of the Federal Government's aviation review.[3] The 2008 earnings guidance came with the caveat that it did not take into account the impact of increased competition from Tiger Airways or Virgin Blue, as well as possible liabilities from an investigation into alleged air cargo price-fixing. Tiger, the low-cost airline partly owned by Singapore Airlines, received this month clearance from the Australian foreign investment review board to launch a subsidiary to compete with Qantas.[2] The Australian airline company is leasing a 777-300ER, as well as taking further options. Virgin Blue has built a strong reputation as a value-based carrier in Australia, and will apply its business practices to the new international business that will connect Australia with North America and other Asian destinations.[6] Virgin Blue's long haul project team is currently recruiting other key management team members. Within the first twelve months of its operation, the long haul airline will create 1160 Australian based jobs including cabin crew, pilots and ground crew.[7] "We were there from the very start of Virgin Blue operations in August 2000 and we are excited to be standing beside Virgin again as the airline enters a new phase of innovation and growth. These new 777-300ERs will help establish its new value-based, long-haul operation as a winner.[8] Virgin Blue said that it already has the regulator approval process under way. Boeing said the 777 family of airplanes is well-accepted with passengers and airlines alike due to its fuel-efficient twin-engine design, high reliability, low operating costs, and comfortable and spacious interior.[9] Virgin Blue, which had also been considering Airbus A340s, flagged the likely Boeing purchase last month when it released an 81 percent rise in half-year profit.[10] Virgin Blue's commitment "could be a final nail in the coffin for Singapore's hopes on the route in the medium term,'' said Sadubin. With today's orders, Virgin Blue said it has made A$2.6 billion worth of aircraft investments for its new carrier.[11] The discount carrier also said it had signed an agreement with leading global lessor International Leasing Finance Company for a seventh 777-300ER, taking the total aircraft commitment price to $2.6 billion.[1]  The carrier would launch the new international operation in 2008 under an as yet unspecified brand name. Godfrey said he was looking for daily services as a minimum requirement, and was hoping for 10 a week from different cities, such as San Francisco and San Diego. [12] While routes and the name for the new international division are yet to be announced, the airline is due for launch next year and will initially focus on flights between Australia and the U.S. west coast.[13] The agency gave a tentative OK to a revised plan filed in January by Burlingame, Calif. -based Virgin America, saying in a statement that the revised plan "should meet U.S. ownership rules" that cap foreign control of a U.S. airline at 25 percent.[14] Mr Turnbull says other Australian airlines are likely to adopt similar measures. "Virgin's not a big airline but other airlines will follow Virgin and then others, and then this over time will become standard," he said. The airline also plans to direct $500,000 a year to offsetting carbon emissions from its own staff's travel.[15] Ian Thomas of Capa Consulting, an aviation-based consultancy, argued Wednesday that it seemed investors did not "fully understand'' the serious threat to Qantas' profitability resulting from the expansion plans of Virgin Blue and Tiger: "Whenever we have seen more competition, particularly from low-cost carriers, we have seen yields dip.''[2] Customers often get big discounts on published prices. Virgin also plans to launch its own low-cost carrier next year in response to competition from Qantas offshoot Jetstar.[4] Virgin Blue has invited its passengers to pay extra on top of their ticket prices to help offset the airline's greenhouse gas emissions. Customers booking online will be asked whether they want to make a payment that will go towards abatement programs such as planting trees. [15] The range of the 777-300ER has increased by 630 nautical miles since entry into service. With this order, 49 airlines have ordered 924 Boeing 777s.[6] REFERENCES 1. egoli - News & Views 2. Virgin Blue buys six Boeing planes for A$2bn - Financial Times - MSNBC.com 3. Virgin readies for US take off | NEWS.com.au Business 4. Australia's Virgin Blue to Buy Six Boeing Planes - News - MSNBC.com 5. Latest News | News | Hemscott 6. Malaysian National News Agency :: BERNAMA 7. Virgin Blue in Multi Billion Dollar Aircraft Deal as it prepares to Launch New International Airline 8. Virgin Blue Orders Boeing 777-300ERs to Initiate Long-Haul Service 9. Daytrading, Eminis, Forex trading, Swing Trading BREAKING NEWS - 513035 10. Virgin Blue To Buy Six Boeing 777s 11. Bloomberg.com: Australia & New Zealand 12. Australia's Virgin Blue to Buy Six Boeing Planes | Autos & Transport | Reuters.co.uk 13. Australia's Virgin Blue places 2.6 bln aud Boeing 777 order for intl ops 14. Business Briefing 15. Jetsetters can chip in for greenhouse offset. 21/03/2007. ABC News Online 16. Virgin Blue Holdings orders six Boeing 777 planes | newratings.com |