Budget Carriers Plan Global Flight Alliance

JANUARY 2, 2007. Virgin plans to team up with AirAsia and easyJet to form a Malaysia-based alliance that will fly long-distance routes for low fares.According to Malaysias Star newspaper, Branson is in discussions with AirAsias CEO Tony Fernandes and easyJets Stelios Haji-Ioannou. Quoting unidentified industry sources the report says that the new joint venture will first fly between Kuala Lumpur and Manchester in Britain and Amritsar in India. Later plans are for flights to Hangzhou near Shanghai, China and Tianjin near Beijing. The Star newspaper said that a source familiar with the discussions as saying that fares on the long-haul network will be as low as 100 ringgit ($27) for destinations in China. Fares to Britain will be between MYR300 ($83) and MYR2,500 ($695), about half the price of a ticket on a regular airline. The alliance - if it decides to fly to London as well - could also use the Luton airport as a hub because Virgin already operates a rail link from there to central London. It said that the alliance will give Virgin and easyJet access to Kuala Lumpurs low-cost airport terminal. However, a spokesman for easyJet told Reuters news agency that the British low-cost airline had not discussed any such alliance with AirAsia. "We are not in any talks with AirAsia or Virgin," he said. A Virgin spokesman refused to deny Virgin Atlantic has held talks with AirAsia.

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