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Virgin Blue Announces Major Expansion Plans


Australia's Second Airline Keeps More Of The Air Fare

Virgin Blue today announced its further expansion, solidifying its position as Australia's number two airline and only true low fare carrier, highlighting the airline's long-term growth plan.

The commitment follows last week's Perth announcement and further demonstrates that Virgin Blue is taking on more aircraft, opening new destinations and increasing frequency, establishing itself as the only airline with a sustainable business strategy to check the looming Qantas monopoly.

The expansion includes:

1) A new direct daily service between the Gold Coast and Melbourne from December 13. The flight will commence in time for the busy Christmas holiday period and will complement the existing Gold Coast service to Sydney. One-way fares from $119*, Fully Flexible fare of $289 one-way compared with the Qantas walk-up fare of $523 one-way, a saving of 45%.

2) New direct service between Melbourne and Canberra as of November 30. Special Launch Offer $50 for 50 seats on every flight for the first 15 days (book by 6 Nov, travel from 30 Nov to 14 Dec). The direct daily service will be the second route out of Canberra following the introduction of Brisbane-Canberra flights 4 months ago and the sixth route out of Melbourne (including the new Gold Coast and Launceston services). Virgin Blue will increase it to two daily services early next year. One-way fares will start from $77* one-way. Virgin Blue will offer $179* one-way Fully Flexible fares compared to Qantas's $286 Fully flexible fare, a saving of 37%.

3) Doubling Sydney-Gold Coast services with a second daily flight to help support this key tourism route serving communities in both Queensland and Northern New South Wales. Virgin Blue will continue with its current every day low fares between Sydney and the Gold Coast starting from $77* one-way.

4) Doubling the soon-to-be-introduced Melbourne-Launceston from one return flight a day to two direct flights a day from December 1 with a third daily flight being scheduled during the holiday peaks.

5) Increasing flights on existing routes to help meet the demand from both tourism and Virgin Blue's growing share of the top 500 corporate market and small business customers:

-Melbourne-Sydney route to 8 daily in November and 9 daily from December 13, up from 7
-Melbourne-Adelaide to 4 convenient daily returns from October 29, up from 3
-Brisbane-Sydney to 9 daily from 26 December, up from 8

6) Improved schedules on the twice-daily Brisbane - Townsville service as well as an improvement in the Mackay schedule that allows tourists to take advantage of low fares to access the stunning Whitsunday Region at a convenient time of day.

The airline also reaffirmed its view today that it did not believe Government handouts to the airline industry was the best method to sustain competition in Australian skies.

While criticising this policy, the airline did suggest that if the government wanted to pursue this course in order to level the playing field, they should at least focus on communities that are trying to break out of a one airline environment.

With this view in mind, the airline has suggested the Government consider routes from Brisbane to Darwin, Cairns and Mt. Isa for support instead of simply throwing money at two airlines competing directly on the same route.

The airline believes such a proposal would help some of the regional centres that have been overlooked and are now being prevented from having jet services by the "turboprop only" policy put forward by the Government this week.

Chief Executive Officer, Brett Godfrey said "By creating an incentive which only offers support to the regions if they use small aircraft, the Government is limiting capacity to these areas. Instead, they should be nurturing tourism and economic growth opportunities that our high capacity low fare jet services have, and will bring to more communities like Townsville, Mackay, Launceston and Mt. Isa."

On the bigger issue of government underwriting, Brett Godfrey reaffirmed "We stand by our view that we would gladly give up every cent of what is being offered if the Government backed the ACCC in doing something about uncompetitive practices in the airline industry. After the collapse of Compass 1 & 2, Impulse and Ansett, the country clearly needs a competition policy with teeth instead of just throwing money at a problem. Airline policy should be developed through a consultative process and not just random initiatives."

Virgin Blue operates the most modern, technologically advanced aircraft in Australia today, with an average age of less than 4 years, compared with Ansett's average fleet age of 11.7 years and Qantas with an average fleet age of 10.8 years (Salomon Smith Barney 2001 Fleet handbook)

* Including GST, excluding levies and taxes. Internet fares, $5 more via Call Centre.