Recent article talks about this, could this explain today's...

Recent article talks about this, could this explain today's action?



Virgin Blue pumps up Pacific plans after Singapore sting
Steve Creedy
February 22, 2006

VIRGIN BLUE will accelerate plans to start a trans-Pacific carrier after yesterday's decision to shut Singapore Airlines out of the route.

Virgin already has a team working on the concept and has been talking to aircraft manufacturers about planes.

It is understood to have three pairs of cities under consideration, but wants to launch with a minimum daily service.

However, it has yet to decide how it would structure the ownership of the new airline and whether it would be a wholly owned subsidiary.

The airline yesterday welcomed the Singapore decision and said negotiations with US authorities to allow it to fly seven days a week were the next significant step.






"It's very encouraging," spokeswoman Heather Jeffery said. "We think it's the best decision in terms of real competition on that route and in Australia's interests as well."

The Government has already held preliminary discussions with US authorities, and the response is understood to be encouraging.

A launch date for a new airline would depend on when permission was granted, but it could be flying as early as next year.

Ms Jeffery said Virgin's new airline would be dramatically different from present offerings.

She said lower fares would be the best way of stimulating inbound tourism from the US and would provide the benefits of a home-grown operator.

Asked whether Virgin was planning to set up a new company to launch the airline, or would launch a subsidiary, she said: "We're looking at both solutions.

"How we would structure it is not what we're focused on at the moment. It's the type of service we would offer, the economic viability of it, and also the fares, the product."

The decision was a double-edged sword for Qantas; it achieved its major goal of keeping a dangerous competitor off the US route, but it again failed to get the Qantas Sales Act changed.

A Government spokesman said the flying kangaroo's pleas for accelerated aircraft depreciation, which would have given the airline a tax benefit of between $2 billion and $3 billion over the next 10 years, were "not under active consideration".

However, Qantas chief executive Geoff Dixon said the airline would continue to push its case on both issues.

"The removal of foreign ownership limits would have helped Qantas lower its cost of capital, as well as provided parity with other Australian carriers, allowing us to operate competitively while not in any way endangering our role as a major Australian company," he said.

The decision has raised government raises that Qantas will keep its wide-body maintenance work in Australia, rather than sending at least 2500 jobs offshore. http://www.theaustralian.news.com.au/common/story_page/0,5744,18229078%255E23349 ,00.html