Australia's Virgin Blue to Buy Six Boeing Planes

Australian airline Virgin Blue has signed a A$2.2 billion (US$1.8 billion) deal to buy six Boeing planes as it accelerates plans for long-haul flights to the U.S..

Virgin Blue, the nation's second-largest airline, said it would buy six Boeing 777-300ER wide-body aircraft, with an option for six additional aircraft.

It also signed an agreement with International Leasing Finance Company (ILFC) for a seventh 777-300ER, taking the total commitment price to A$2.6 billion.

Virgin Blue, which had also been considering Airbus A340s, flagged the likely Boeing purchase last month when it released an 81% rise in half-year profit.

The carrier would launch the new international operation in 2008, focussing initially on flights between Australia and the U.S. west coast, Chief Executive Brett Godfrey said in a statement. "We will create more Australian jobs, bring more tourists and provide choice and vigorous competition on the Trans Pacific route," Godfrey said.

Virgin Blue, which is 62.3% owned by Australian transport group Toll Holdings, has been expanding aggressively as it competes with larger rival Qantas Airways. It currently flies to 22 Australian and eight international destinations, including New Zealand, Fiji and Tonga.

The carrier said in February a seven-plane Boeing order had a list price of US$2.6 billion. But customers often get big discounts on published prices.

Virgin also plans to launch its own low-cost carrier next year in response to competition from Qantas offshoot Jetstar.

Virgin shares, which have risen sharply over the past six months, were higher in Sydney's afternoon session, in line with the overall market.