VIRGIN BLUE and UNITED A/L TO CODESHARE IN AUSTRA

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SYDNEY, Australia -- Sir Richard Branson's Australian airline Virgin Blue said Wednesday it plans to codeshare with United Airlines of the U.S.

The deal will restore the Australian link United lost when Ansett Australia collapsed last year.

Ansett, then the No.2 Australian domestic carrier and a wholly owned subsidiary of Air New Zealand, was a member of the Star Alliance airline group until it fell into trouble in mid-September.

For Virgin, the discount carrier that began operations in Australia in September 2000, the deal gives it an international passenger flow.

United, the second biggest U.S. airline, flies daily to Sydney and Melbourne, Australia's two main gateways.

"This agreement means we are now able to offer customers access to all points in Australia with easy domestic connections and smoother transfers," Stephen Pearse, United Airlines Australia general manager said in a statement, Reuters news agency reported.

Qantas dominant
The agreement gives Virgin a better chance of winning passengers from the dominant Australian airline Qantas Airways, which has about 85 percent of the $6 billion Australian market.

Qantas, which has British Airways as a 22 percent stakeholder, is a member of rival airline alliance OneWorld.

An attempt by a Melbourne-based consortium to revive Ansett was aborted in February, leaving Virgin as the only competition to Qantas.

There has been speculation since then that a third carrier would enter the Australian market, with market talk focusing on Air New Zealand, its discount subsidiary Freedom Air or Singapore Airlines.

But Air New Zealand has been all but ruled out after Qantas confirmed last week it was looking at taking a stake of up to 25 percent in the New Zealand carrier.

The Virgin-United tieup will make it harder for another carrier to come into the Australian market, although Virgin's own success shows that a discount carrier can win market share.

Partner with Patrick

Branson is a 50-50 partner in Virgin Blue with Australian logistics group Patrick
Branson owns 50 percent of Virgin Blue. Australian logistics group Patrick Corp Ltd owns the rest after a $145 million deal in March.

Patrick shares are up 10 cents or 0.58 percent to A$17.49 at midday. Qantas is up 0.23 percent to A$4.45, while the broader Australian market is 0.1 percent higher.

Reuters reports that Virgin plans to float off about 20 percent of the discount carrier within one to two years, leaving 40 percent each in the hands of Virgin and Patrick.

In its bid to cope with its rapid expansion in the wake of the Ansett collapse, Virgin Blue is planning a A$3.6 billion fleet upgrade and is trying to get access to various former Ansett terminals on the east coast.

Virgin Blue now has a fleet of 17 Boeing 737 aircraft and is looking to acquire 30 to 40 new aircraft -- either more Boeings, or the rival Airbus A320.

Asian regional members of the Star Alliance include Singapore Airlines, Thai Airways International, Air New Zealand and All Nippon Airways. South Korea's Asiana Airlines is about to join the group.

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Original post

Member for

24 years 2 months

Posts: 2,956

RE: VIRGIN BLUE and UNITED A/L TO CODESHARE IN AU

This is tremendous news! I myself, was just thinking the other day about a possibility of United codesharing with VirginBlue for connections throughout Australia. But then I was thinking, they could just connect with AirNewZealand through Aukland, but ANZ only serves 5 destinations to Australia from Aukland, so they are rather limited there. I fly to Australia quite often from LAX, and I fly either United or ANZ. In April, I flew to SYD via AKL and MEL. UA841 does LAX-AKL-MEL. They had always done that, even when Ansett was around. I guess the load factors on the AKL-MEL portion justified it. On my flight, it was pretty full. After the Ansett callapse, UA861 did SFO-SYD-MEL, so they had 2 continuation flights to MEL. I was on UA862 MEL-SYD. Let me tell you, that's the emptietst flight I've ever been on. It was a 747-400 with maybe 50 people on board. That's a generous estimate. Operating a jumbo with that load factor has to be killing you econonomically! But what can you do? You want to serve the market and not lose customers to QANTAS. For a short time back in late 2000/early 2001, UA served MEL nonstop from LAX, but that flight did not last long. They just went back to serving them from AKL. But then Ansett collapses, and they start serving them from SYD, as well. Hopefully this thing gets finalized quick because I'm going to be down there in July and I'm going to make a Melbourne trip from Sydney and I'm definitely going to fly VirginBlue, and hopefully I'll get my mileage now. The only thing left to happen now, is for United to Codeshare with Virgin Atlantic! I think I'm asking a bit too much for that to happen though!

GD1

Member for

24 years 2 months

Posts: 2,956

RE: VIRGIN BLUE and UNITED A/L TO CODESHARE IN AU

Sorry for bringing up an old thread, guys. Especially one that nobody responded to. Does anybody with Australia connections know exactly when this codeshare agreement is set to begin? I went on to ual.com and there was nothing. Or is it just speculation? That press release sounded pretty official to me.

GD1

Member for

24 years 2 months

Posts: 6,208

RE: VIRGIN BLUE and UNITED A/L TO CODESHARE IN AU

In about a month is what I heard on the news.

Leave no-one behind!

Member for

24 years 2 months

Posts: 2,956

RE: VIRGIN BLUE and UNITED A/L TO CODESHARE IN AU

Thanks Ja

GD1