Branson to take Virgin Atlantic to Australia in 2003!

SYDNEY (Reuters) – Travel and retail mogul Richard Branson said on Sunday his Virgin Atlantic would fly to Australia via Hong Kong in 2003 and he would float Australian airline Virgin Blue, which he half owns, in the first half of 2003.

“Virgin Atlantic, I hope, will be flying all the way to Australia next year,” Branson told Australian television.

“We will finally be able to connect up Virgin Blue with Virgin Atlantic,” he said.

London to Australia via Hong Kong would be the longest haul flight Virgin Atlantic [VA] operates.

Branson said he had gained permission from the Australian and British governments for Virgin’s “Kangaroo route” and expected Hong Kong authorities to be “flexible”.

However, he said an alternative stopover could be Shanghai, where Virgin Atlantic already flies, or Bangkok.

“We are talking about big investments in big route expansions and making sure we can fill in the gaps in Australia and overseas that we are not already flying to,” Branson said.

“There are still plenty of routes where the public are over paying,” he said, adding Virgin Blue would expand from a domestic carrier to fly international routes to tourist destinations such as Bali and Fiji.

The Sunday Times newspaper reported the Virgin Blue float would have a likely value of up to 520 million sterling ($828 million). It said Branson had hired Goldman Sachs investment bank for the float.

Virgin Blue is half owned by Branson and the other half is owned by Patrick Corp PRK , an Australian transport and logistics group.

“The idea is to bring the public into Virgin Blue sometime in the first half of next year,” Branson said.

“It will be a stand alone float of Virgin Blue and I think we have pretty well got everything in place to get that float away.”

Branson said he had set Virgin Blue staff a target of A$100 million net profit this year. “I am absolutely confident they can achieve that,” he said.

Branson, who owns the larger Virgin Atlantic airline with Singapore Airlines SIAL Ltd., was expected to announce the float when he unveils a 400 million sterling order from U.S-based jet maker Boeing Co BA , said the Sunday Times.

Branson said the last issue to be bedded down was the purchase of 30 to 40 new aircraft. “The plane order is the last thing to lock up before the float,” he said, adding the order would be announced in the next four to five weeks.

“It is the best time perhaps in the history of aviation to be buying new planes because after September 11 there aren’t many airlines expanding, most airlines are contracting,” he said.

“We are confident that by once again by ordering 30 or 40 new planes we can drive our cost base even lower.”

On November 6, Branson signed a deal to rent terminal space at Sydney airport, Australia’s largest, for Virgin Blue, ending months of wrangling. He had been campaigning for months to get Sydney Airport to stick to a handshake deal on terminal space.

The cut-price carrier had been operating out of an overcrowded, temporary building with no covered gateways that sits hundreds of metres from the main terminal buildings.