Australian carrier plans low-cost flights to the U.S.

Virgin Blue Holdings, the parent of Australian low-cost carrier Virgin Blue, has announced plans to create a new long-haul subsidiary that will offer low-cost transpacific service. Called V Australia, the new airline “will initially operate flights between the east coast of Australia and the west coast of the United States…with the first flight operated by a brand-new B777-300ER,” the company said. Subject to government approvals, V Australia is expected to start flying in late 2008. Virgin Blue currently handles about a thid of Australia’s domestic air travel market, and company officials told reporters that the new V Australia plans to acquire six long-range Triple 7s. They did not identify specific destination cities in the U.S., but Australian media have speculated that Los Angeles is high on the list. Officials said they expect the new airline to eventually capture 12 percent of the Australia-U.S. market, putting it into competition with Qantas and United, the main carriers between those two countries. Richard Branson’s Virgin Group holds a 25 percent stake in Virgin Blue.