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Last Updated: Thursday, 15 May, 2003, 05:31 GMT 06:31 UK
Virgin Blue triples profit
Richard Branson
Richard Branson promises a Virgin Blue investment opportunity
Richard Branson's Australian budget airline, Virgin Blue, has beaten the worldwide travel slump and seen its pre-tax profits triple.

The good result has strengthened Mr Branson's resolve to float parts of the company on the Australian stock exchange soon.

"As much as anything is definite, it is very likely that we will float before the end of the year", Mr Branson said in Adelaide during a tour of his Australian operations.

During the past financial year ending in March, Virgin Blue managed to make a pre-tax profit of 158m Australian dollars ($102m , 63m), up from A$47m a year earlier and well above its A$100m target.

The carrier's chief executive, Brett Godfrey, said the figures proved that the firm's low-fare model worked even in times of global uncertainty, war, terrorism and fears over the respiratory disease Sars, all of which have hit airlines around the world.

Holidays 'closer to home'

Most budget airlines, however, have managed to escape the downturn, and Virgin Blue's performance mirrors the success of carriers like Ryanair and Easyjet in Europe, and Southwest Airlines and Jet Blue in North America.

In the case of Virgin Blue, terrorist attacks like those on mainly Australian tourists on the island of Bali actually boosted its business. According to Mr Godfrey, the "situation overseas has encouraged many Australians to take their holidays closer to home during the past year."

Virgin Blue launched in Australia three years ago, and has seen its business grown rapidly.

In January this year, the airline said it would buy 10 more Boeing 737 aircraft, with an option to acquire an additional 40 planes during the next decade.

Until Virgin Blue's arrival, Australian air travel had been dominated by domestic carriers Qantas and Ansett.

Ansett, however, went bankrupt and stopped flying in 2001, providing an opportunity for Virgin to expand its foothold in the market.

To raise capital for his expansion course, Mr Branson sold half of Virgin Blue to Australian freight company Patrick in March last year.

Back then he reserved himself the right to sell up to a further 20% of the airline's shares on the stock market.

Branson's Virgin Blue boosts fleet
16 Jan 03  |  Business
Virgin Blue seeks new airspace
30 Aug 02  |  Business
Watchdog takes Qantas to court
07 May 02  |  Business
Branson mulls Virgin Blue float
15 Apr 02  |  Business
Branson beefs up Virgin Blue
12 Mar 02  |  Business

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