The Australian

Giant US carrier United Airlines is urging US authorities to use Australia’s new international airline, V Australia, to pressure the federal Government for an open-skies agreement across the Pacific.

Virgin Blue chief executive Brett Godfrey revealed yesterday that United was opposing a submission by Virgin to the US Department of Transport seeking 10 flights weekly.

United and Qantas are currently the only airlines to fly directly to the continental US and the entry of V Australia would break up the duopoly.

Virgin needs approval from US and Australian authorities to fly more than four services per week and already has permission from Canberra for the additional flights.

It has yet to get US Transportation Department approval, however, and there are worries the application could become a political bargaining chip.

Speaking at the unveiling of V Australia’s new name and livery, Mr Godfrey said United had opposed Virgin’s submission on the grounds that the US authorities should use the new airline to press the Australian Government to negotiate an open-skies agreement.

United tried a similar tactic when Jetstar International applied to fly to Honolulu. “I think they’re fairly clear in their submission that they’re not so concerned about us coming on the route,” Mr Godfrey said.

“It’s the fact that they see this as another opportunity for their government to pressure our government on open skies, at least on the trans-Pacific route.”

Mr Godfrey said Virgin had no problems with an open-skies agreement that allowed carriers on both sides of the Pacific unlimited access to each other’s markets.

Virgin’s new airline would serve the public interest, he said.

“It’s a public interest issue, which is why our Government has supported it, and I would be disappointed if the Americans didn’t also see it that way,” he said. Officials chose the V Australia moniker after reviewing almost 6000 entries in a nationwide competition.

The Australian carrier is prevented from using the Virgin brand on international services by an agreement between Virgin Group and Singapore Airlines, which owns 49 per cent of Virgin Atlantic.

Mr Godfrey also announced that the first plane would be called Didgeree Blue and unveiled a red and white livery with the Southern Cross emblazoned across the tail.

If its US application succeeds, V Australia expects to start flying late next year and to capture about 12 per cent of the direct US market using Boeing 777-300ER aircraft.

It expects startup costs to be about $70 million over and above lines of credit needed to secure aircraft and believes it will lose money in the first 18 months.

Mr Godfrey said the airline would probably link up in the US with Virgin Atlantic and Virgin America.

The new airline’s launch was welcomed yesterday by politicians and tourism bodies, which said it would provide a much-needed boost on the route.

Some 456,000 Americans visited Australia last year and the market is worth about $2 billion.

Tourism operators have complained that tight availability of seats on the route means business is being turned away.

“V Australia will deliver a shot in the arm to aviation capacity on the Pacific route,” Tourism Minister Fran Bailey said.

“Far too many Americans have missed out on a holiday to Australia due to a lack of capacity on the Pacific route.”

Tourism lobby group TTF Australia said V Australia would bring more tourists and create more jobs.