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WORLD BUSINESS

Virgin Blue picks up Samoa flights

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Virgin Blue's international arm Pacific Blue will run the Polynesian services.

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SYDNEY, Australia (CNN) -- Australian discount carrier Virgin Blue said Thursday it has agreed with the government of Samoa to take over some of the jet services now operated by state-owned Polynesian Airlines.

A joint venture company named Polynesian Blue is being set up, owned 49 percent each by Virgin Blue and the Samoan government, with the remaining two percent held by an independent Samoan shareholder.

Virgin Blue said the venture was expected to start flying from the Samoan capital Apia to Australia and New Zealand from late October, using Boeing 737-800 aircraft.

It said Polynesian Airlines would continue to operate its other turboprop services and support operations.

Polynesian Blue will be operated by New Zealand-based Pacific Blue, the international arm that Virgin Blue set up in 2004 year to fly from Australia to New Zealand and South Pacific destinations, including Fiji.

In a statement issued Thursday, Virgin Blue CEO Brett Godfrey called the venture an "exciting project" and said the airline was happy to be partnering with the Samoan government to offer a viable airline option to tourists and the Samoan people.

Samoan Prime Minister Tuilaepa Sailele Malielegaoi said Virgin Blue had begun the low fare revolution in the region.

"We want to ensure that Samoa has competitive air services and participates fully in the growing tourism market to the Pacific Islands. Virgin Blue has understood this from day one and is clearly the best partner for our government and our people," he said.

Godfrey said Virgin Blue had demonstrated its ability to grow the market in the South Pacific region, with a 50 percent increase in the number of people traveling to Fiji from Australia since Pacific Blue launched services there.

Virgin Blue, set up by British entrepreneur Richard Branson, has expanded rapidly since entering the Australian domestic aviation market in 2000.

Australian transport group Patrick Corp. moved to majority control of the airline earlier this year, though Branson's Virgin Group retains a stake of about 25 percent.

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