Airports jostle to attract Virgin flights

By YOKE HAR LEE and LIBBY MIDDLEBROOK

At least two New Zealand airports want Sir Richard Branson's Virgin Express no-frills airline to use their terminals.

Aviation experts in Australia doubt the airline will fly to New Zealand straight away, because of the small size of its market.

But a Virgin spokesman said yesterday: "The company has had preliminary discussions with a number of airports in New Zealand with regard to possible introduction of a transtasman service."

Auckland and Hamilton Airports have contacted Virgin Airlines seeking to be its New Zealand base.

Auckland's operations manager, David Hansen, said the airport approached Virgin a few weeks ago after news that it was setting up in Australia.

"From our point of view, we are purely interested in having another customer," he said.

"We have similarly contacted other airlines, looking for such business opportunities."

Hamilton Airport's chief executive, Barry O'Connor, said the Hamilton City Council and Tourism Waikato had sent Virgin an information pack covering potential customer numbers and airport facilities.

It is understood Virgin has yet to respond.

Virgin is sure to meet tough competition from the Australian market dominated by Qantas and Ansett Australia.

The managing director of the Australia-based Centre for Asia Pacific Aviation, Peter Harbison, said: "It is unlikely Virgin would start operations in New Zealand in the short term."

At best, the earliest move would come after Virgin's first year of operations in Australia.

The small size of the New Zealand market would also make it unattractive for Virgin.

"There is nothing in New Zealand, really," Mr Harbison said.

"It is much more competitive in the Australian market. You have got Sydney, Melbourne and Brisbane - that's what they are really talking about. Melbourne's [population is] 2.5 million, Sydney three million and Brisbane's a couple of million. What's Auckland? A million?

"Auckland is 21/2 to 31/2 hours [from Australia], whereas Melbourne, Sydney and Brisbane are an hour each way.

"I don't see a lot of value in flying to New Zealand."

Another Sydney-based analyst also doubts Virgin will fly to New Zealand, saying the markets it is likely to start with were the profitable routes between Sydney, Melbourne and Brisbane.

While the Australian Government is keen to break the market hold of Qantas and Ansett, Qantas has vowed to put up a strong fight to compete with Virgin.

Mr Harbison said Virgin's record showed it was more likely to use its brand in Australia but scout for investors to share the startup cost.

"This is typical of Virgin's operation; as well as paying attention to volume, it tends not to be a 100 per cent investor.

"It will use its brand, but get investors to fork out the lion's share of the cost."

Investors were unlikely to come up with money for more than five aircraft.