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Branson launches trans-Pacific airline to join fare war
A new airline started by flamboyant British billionaire Richard Branson inaugurated service between Los Angeles and Australia on Friday, launching the latest volley in a trans-Pacific fare war that has cut the price of a round trip ticket by half.
- By Peter Pae, Los Angeles Times/Washington Post News Service
- Published: 23:01 March 1, 2009
Los Angeles: A new airline started by flamboyant British billionaire Richard Branson inaugurated service between Los Angeles and Australia on Friday, launching the latest volley in a trans-Pacific fare war that has cut the price of a round trip ticket by half.
The first flight of V Australia, carrying about 300 passengers from Sydney, landed at Los Angeles International Airport on Friday morning, greeted on the tarmac by fire trucks with water guns and then at the gate by Disney characters Mickey Mouse and Goofy.
But the festive atmosphere - a Branson trademark wherever he goes - masked a troubling global air travel slump with no end in sight.
Although the fall-off in demand has meant lower fares with airlines struggling to fill their planes, a prolonged downturn could ground weaker carriers and leave travellers with fewer choices and eventually a return to higher fares, analysts and industry officials said.
"The industry is in a global crisis, and we have not yet seen the bottom," said Giovanni Bisignani, chief executive of the International Air Transport Association. The airline trade group said Friday that international airline passenger traffic fell 5.6 per cent in January, the fifth consecutive monthly drop. "Alarm bells are ringing everywhere."
But Branson, in an interview after a welcome ceremony at Los Angeles airport, said that he was confident his new airline could weather the economic turbulence.
"There are plenty of people who still got to fly, and the market across the Pacific is still very big," Branson said. "I wouldn't necessarily say every airline in the Pacific will survive, but if you make sure you've got the best carrier flying, the chances are you'll do well."
Branson said the new airline can "afford to be price competitive" because it flies newer planes that are more fuel-efficient and less expensive to maintain than those flown by competitors. The planes also have several unusual amenities, including two bars, a women-only toilet and mood lighting.
In addition to more choices in travelling to Australia - for years only two airlines, Qantas Airways and United Airlines, offered nonstop flights - V Australia's entry has led to a dramatic drop in fares. Nonstop roundtrip economy tickets that averaged about $1,500 (Dh5,505) to $2,000 (Dh7,340) - last year are now below $1,000 and on some days have dropped to as low as $700.
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