ATW Daily News

Virgin Blue sees downturn as expansion opportunity

Tuesday September 22, 2009

Virgin Blue is hoping to take advantage of the global downturn to order up to 50 new 737s at "bargain prices," CEO Brett Godfrey told ATWOnline.

"Now is a great time to buy. We are in the market because the market is right and we don't want to miss the opportunity," he said. Blue operates 65 aircraft comprising 50 737-700s/-800s and 15 E-Jets. It now is considering the -900ER, which can seat up to 215 passengers, 26 more than its largest current aircraft.

Godfrey said he is not satisfied with Blue's 30% share of the Australian domestic market and hopes to boost it to 50% in the long term. That goal is one of the objectives of Blue's "Airline of the Future" project, which he said may include subdividing the cabin into more classes.

The 737s would feature premium economy and classic economy seats up to the over-wing exit rows and lower-cost seating with reduced pitch toward the back of the aircraft. "This would give us virtually a three-class configuration," he said. "Just putting an extra row of seats in the back lowers costs by 3%."

Blue had been looking at starting a new airline to combat Jetstar Airways, but Godfrey said that option is fading and the airline favors introducing a third class onto its existing fleet. It also is planning more premium features offering greater differentiation from its standard economy product. He told this website that the premium economy product also will be rolled out across the regional international fleet, which operates under the Pacific Blue brand.

The carrier suffered a company-record A$160 million ($138.7 million) loss in its fiscal year ended June 30 (ATWOnline, Aug. 28).

by Geoffrey Thomas

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