Virgin Blue could be here by August

12.10 pm - By VERNON SMALL deputy political editor

Virgin Blue could be operating here by August if the New Zealand and Australian governments waive rules that would prevent it flying across the Tasman, chief executive Brett Godfrey said today.

The no-frills Australian-based airline, owned by British entrepreneur Sir Richard Branson, can carry
passengers in New Zealand's domestic skies anytime.

But it wants to fly across the Tasman and feed planes through Australia rather than set up a new headquarters and maintenance base here.

As a British-owned company it would need the permission of both governments to fly trans-Tasman.

Virgin Blue has indicated a public float, to bring about Australasian ownership, was at least two years away.

At a joint press conference Mr Godfrey and Transport Minister Mark Gosche said more work would be needed between Virgin and Civil Aviation Authority officials.

Canberra had giving the company "fairly strong overtures" it would support the bid, Mr Godfrey said.

"The Australian government was very supportive in bringing us to Australia and subject to their discussions with the New Zealand government on the issue, at this stage there is no problem."

But Mr Gosche flagged New Zealand's interest in better access to the UK airlines market as a possible trade off for allowing a British-owned carrier to fly the Tasman.

"We are very keen to see competition in the New Zealand market with the demise of Tasman Pacific. Virgin Blue are keen to look at a trans-Tasman and domestic operation and that creates some difficulties that we have to work our way through," he said.

"We don't have a very good relationship .... we would like to improve the relationship with the UK for instance which is our second biggest market, so there are those considerations to be dealt with. We have to look at the broader picture as well as the immediate issues."

But Mr Godfrey said as an Australian-based airline, albeit with a British owner, Virgin Blue had little influence in the UK. He would raise the issue with Sir Richard.

Mr Godfrey said the airline was still aiming to be flying here before Christmas. Safety issues would
take at least three months to address.

Earlier Prime Minister Helen Clark said she would be surprised if there was any barrier to Virgin Blue entering New Zealand.

"If an overseas airline presents with a good safety record and general track record, I don't think you'll see the New Zealand Government standing in the way of that," she said.

Mr Godfrey said when Virgin Blue started flying its 737-700 and 737-800 planes in New Zealand $500 fares between Auckland and Christchurch would be "a bygone era".

Meanwhile, cut-price airline Freedom Air has fielded thousands of calls for its domestic service which begins tomorrow.

The Air New Zealand subsidiary will fly six flights on Tuesday between Auckland, Wellington and Christchurch.

Freedom Air began taking calls this morning, and general manager Wayne Dodge said hundreds of bookings have been made.