UPDATE:Virgin Blue In Boeing Deal, Links With US Counterpart
April 01 2010 - 2:03PM
Dow Jones News
Virgin Blue Holdings Ltd. (VBA.AU), parent of Australia's
second-largest airline, Thursday reached a deal to acquire up to
105 new aircraft from Boeing Co. (BA).
The company also said it would enter a frequent-flyer pact with
its U.S. counterpart.
The Boeing deal includes firm orders for 40 737-800 aircraft
destined for the Virgin Blue brand, with deliveries running from
June 2011 through 2017.
Virgin Blue Holdings, which also operates international flights
under the V Australia brand, additionally said it would link
loyalty programs with Virgin America. U.K. entrepreneur Richard
Branson founded both carriers, and entities that he controls retain
minority stakes.
Meshing the frequent-flyer programs is one of the first results
of efforts to create synergies among Virgin-branded carriers, which
include U.K.-based Virgin Atlantic Airways Ltd. The U.S. and
Australian carriers already allow cross-booking of passengers and
also plan a crew exchange.
Virgin Blue and its counterparts aren't members of any of the
three alliances that dominate the global airline industry, but the
Virgin Blue brands are awaiting regulatory approval for a tie-up
with Delta Air Lines Inc. (DAL), a leading member of the SkyTeam
group.
Australian regulators gave the proposed deal antitrust immunity
in December, but U.S. authorities completed their initial review
only in March, triggering a six-month timetable for a final
decision.
Virgin Blue last year dropped UAL Corp.'s (UAUA) United Airlines
as a partner on transpacific routes to the U.S. in favor of
Delta.
Virgin Blue's Boeing order is in line with the company's own
previous indications, replacing existing aircraft and providing
capacity for expansion.
The deal, which potentially could involve a total 105 aircraft,
includes 10 737s with cancellation rights, 25 options for firm
delivery positions and 30 future purchase rights.
The 40 firm orders lifted Boeing's gross bookings for the year
to 100 aircraft, though it has also had 17 cancellations, including
two 777s for unnamed customers announced Thursday.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135;
doug.cameron@dowjones.com -By Bill Lindsay, Dow Jones Newswires;
61-2-8272-4694; bill.lindsay@dowjones.com
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