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Virgin Blue needs Singapore Airlines' nod to fly here

By Nick Stride

Friday 14th February 2003

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Virgin Blue, Sir Richard Branson's Australian domestic airline, doesn't have the right to use its name here, despite boasting it could capture a third of the market.

A Virgin Blue spokeswoman confirmed yesterday that Virgin Atlantic, the international carrier 49% owned by SIA, has the rights to the Virgin name for any operations outside Australia.

Under a clause in the contract signed in 1999 when SIA bought into Virgin Atlantic, any other Branson airline company operating under the Virgin brand would effectively have to secure SIA's permission to use the name.

It is understood the clause was insisted on by SIA because it wanted to avoid the confusion of two international operators using the same word in their name.

Virgin Blue last week claimed it could take a third of the transtasman and domestic New Zealand market if it was given "a fair chance" to compete against Qantas and Air New Zealand.

The claims came in submissions to be lodged with Australian and New Zealand regulators opposing the Air New Zealand and Qantas' proposed alliance. It said it was also looking at short-haul flights to other southwest Pacific destinations.

The Virgin Blue spokeswoman said the company was negotiating with Virgin Atlantic "to see if there is any way of seeking approval for us to use that name or if there is any other way to go about it." Virgin Blue's commercial manager David Huttner is visiting Singapore this week.

Aviation industry sources said approval was unlikely to be forthcoming without a substantial payment from Virgin Blue, which it could ill afford.

They said Virgin Blue would be loath to fly across the Tasman and within New Zealand without the Virgin name.

Establishing a new brand would be expensive and synergies would be lost because the brand already has a high recognition among Australian travellers, and to a lesser extent among New Zealanders, as a reliable low-cost carrier.

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