VIRGIN BLUE AND MELBOURNE AIRPORT REACH TERMINAL DEAL

23 July 2002

Melbourne Airport and Virgin Blue have reached a 10-year agreement for the airline to operate from the former Ansett/Southern Domestic Terminal, providing Virgin Blue with much needed room to expand as well as a more efficient, comfortable facility for the increasing number of Virgin Blue Guests.

Rapid expansion has seen Virgin Blue outgrow the Domestic Express Terminal, which Melbourne Airport built for them and Impulse Airlines back in December 2000, when all existing domestic gates were controlled by Ansett and Qantas. 

Once Virgin Blue moves up to the Southern Domestic Terminal, which could be in the next 30 days, there will be no terminal or gate constraints on the growing low fare carrier. The Domestic Express Terminal currently provides Virgin Blue with five gates. The new terminal will initially provide seven, an increase of 40%, with further gates to be made available as required. 

Virgin Blue Chief Operating Officer, Rob Sherrard, said "The agreement means we can forge ahead with our accelerated growth plans which involve more flights in and out of Melbourne, and more low fares for people travelling to and from Melbourne. We are excited to have reached a mutually beneficial agreement with Melbourne Airport which will allow Virgin Blue to move in to the bigger terminal at a reasonable cost, providing our Guests with a more convenient, efficient and user-friendly facility."

He continued, "It also means that we've moved towards addressing the needs of our growing number of corporate and business travellers in two out of three of Australia's biggest airports."

Melbourne Airport's CEO Chris Barlow is also pleased to be welcoming Virgin Blue back into the main terminal building. "It seems like only yesterday that we officially opened the Domestic Express Terminal. Virgin Blue has expanded rapidly while running a well managed on-time airline and I'm so pleased that we are in a position to provide them with the extra space they need to continue to grow. And it's wonderful to welcome them back into the main terminal building, this time with surety of expansion potential. 

"We also have plans to refurbish our domestic terminal to provide a totally seamless experience for passengers connecting to and from international flights. 

"Additionally, now that we have a multi-user domestic terminal in Melbourne, it means that no airline will face the same difficulty Virgin Blue and Impulse Airlines did in trying to obtain terminal space. We will be able to offer space to any airline wishing to fly to and from Melbourne. It's a great outcome for the travelling public," he said. 

Virgin Blue will operate from Gates 1 - 7 on former Ansett Concourse A. Virgin Blue will share the Southern Domestic Terminal with Kendell Airlines.

NOTES

· Virgin Blue operates 70 flights per day to and from Melbourne. 

· Virgin Blue now flies non-stop from Melbourne to Adelaide, Brisbane, Cairns, Canberra, Gold Coast, Launceston, Perth, Sydney and shortly Hobart.

· Melbourne Airport acquired the former Ansett Terminal - now known as the Southern Domestic Terminal - in May this year at a cost of $25 million, and is currently assessing plans for a multi-million dollar upgrade program for the terminal. The upgrade will not interfere with airline operations and passenger convenience. 

· Melbourne Airport built the Domestic Express Terminal in December 2000 for Virgin Blue and Impulse Airlines at a cost of around $9 million. When Virgin relocates, the terminal is likely to be used as a freight facility. The forward lounge will be dismantled and put up for sale. 

· Melbourne Airport handled just over 13.5 million domestic passengers in financial year 2000-2001.