Virgin gets clearance to form discount Australian carrier

Airline Industry Information, Dec 8, 1999

AIRLINE INDUSTRY INFORMATION-(C)1997-1999 M2 COMMUNICATIONS LTD

Virgin Atlantic Airways has received foreign investment clearance from the Australian federal government that allows it to establish a new, discount carrier in Australia.

The federal Assistant Treasurer Rod Kemp said that the clearance had been given because `the government believes it is in the national interest for Australia to have a third major airline.` The federal Transport Minister meanwhile has indicated that Virgin Atlantic Airways will have to meet the same safety conditions as Australian carriers Ansett and Qantas. The carrier also has to earn its Air Operators Certificate before it can commence services according to the Australian Associated Press.

The issue of access to terminal space has apparently already been examined with the British-based carrier having already commenced negotiations with Australian airport operators as well as receiving provisional landing and departure allocation slots for Sydney airport.

In related news, a decision by British Airways (BA) to sell Australian carrier Qantas eight Boeing 767 aircraft has been seen as a means of helping the Australian carrier to counter the threat posed by Virgin Atlantic Airways` entrance into the domestic aviation market according to The Guardian, a British newspaper. The sell-off is also seen as being part of Qantas` strategy to cope with increased demand during the Olympic Games in 2000, as well as being part of BA`s strategy of rationalising its fleet.

BA holds a 25% stake in Qantas.