V Australia Coming to the US

You may have heard of Australia’s second largest airline, Virgin Blue, but you probably haven’t heard of V Australia. That’s because until yesterday, it didn’t really exist.

08_04_01 vaustraliaV Australia is Virgin Blue’s new long haul arm. It launched officially yesterday as the US and Australia signed an open skies agreement which allowed the airline to start flights between Australia and the US. First up will be a daily Sydney – Los Angeles trip beginning on December 15, 2008, just in time for high summer season in Australia.

US-Australia flying has always been an interesting market. There are really only three nonstop options, and only two are major players. Of course there’s Qantas, Australia’s largest airline, and then there’s also United. The third player? Hawaiian flies from Honolulu to Sydney, but that’s not a strong option for many people on the Mainland.

Air New Zealand used to fly the route, but they abandoned it several years back. And Singapore has been trying to fly it for years as well, but Australia’s protectionist policies won’t let them in. This has led to high fares and not nearly enough competition. Now, there will finally be a third major option.

You might expect V Australia to come in with a torrent of low fares, but really they aren’t. Their lowest published fare starts at just 16% below the current lowest published fare (if you believe their own press). They have been touting a sale fare, but it’s already sold out for the first two months. Then again, this is high season, so I wouldn’t expect many deals.

We’ll see how much competition really does to lower fares once the shoulder and low seasons come around, but in a market that has previously been so restricted as this one, it should only be good news.

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