big buy orders just before close, page-4

Virgin slashes fares to Los Angeles

VIRGIN has fired the first shot in a potential trans-Pacific airfare war by significantly undercutting rivals with $1199 tickets to Los Angeles.

V Australia announced the all-inclusive fare between Sydney, Melbourne, Brisbane and Los Angeles yesterday as it moves towards a February 27 launch of its first flights.

The fare, which is good for travel until October 24 next year and on sale until December 29, is more than $600 cheaper than a Qantas March flight obtained yesterday and $500 below than V Australia's previous cheapest offering.

The airline said it represented a 45 per cent discount on normal economy fares.

The move is the latest in a round of cheaper international fares launched by airlines keen to get bums on seats as demand drops.

Figures released yesterday by Qantas showed its international passenger numbers for October were down 7 per cent on the previous year and the percentage of seats filled on overseas flights fell by 2.4 percentage points.

Flight Centre spokesman Colin Bowman said discount fares had continued to be available past the traditional “early bird” season and flights to London for just over $1700 were still available for travel in April.

Mr Bowman said hotel rates were also softening and a number of airlines had reduced fuel surcharges.

“Those sorts of benefits are flowing through and it's all good,” he said.

V Australia is particularly keen to stimulate traffic because it has been forced to launch in the traditionally quiet post-Christmas period.

It had planned to launch on December 15 but was forced to put off operations until the new date because a strike by Boeing machinists delayed delivery of its aircraft.

Passengers from Melbourne and Brisbane will initially connect via Virgin Blue to the Sydney service, which will begin as three flights a week and ramp up to a daily service from March 20.

The airline plans to launch non-stop flights from Brisbane on April 8 - about five weeks later than planned - after it receives its third Boeing 777-300ER. It is also looking at services to South Africa.

V Australia will offering three classes of travel: a business product with lie flat seats and a bar, a premium economy cabin and an economy class it says offers more space than Qantas.

V Australia executive general manager Scott Swift said the airline had promised value for money fares and was delivering with an offering that was almost half the normal price.

Qantas yesterday refused to match the fares but said that that its flights would remain “competitive”.

Qantas operates 43 non-stop flights per week between Australia and the US mainland, including 17 Sydney-Los Angeles services, 14 Melbourne-Los Angeles flights, a daily Brisbane-LA service and five Sydney-San Francisco flights.

The Australian carrier and United Airlines dominate the non-stop market to the US West Coast but there are a number of one-stop alternatives available through New Zealand, Pacific Island airlines and some North Asian hubs.

Jetstar and Hawaiian Airlines also fly directly from Australia to Honolulu and Air Canada flies non-stop to Vancouver.

http://www.theaustralian.news.com.au/business/story/0,28124,24817878-23349,00.html