Virgin Blue Airlines Pty founder Richard Branson said the Australian discount carrier's profit will top A$100 million (US$55 million) this business year, aided by the failure of rival Ansett Holdings Ltd.
The closely held company, which hasn't published net income for previous years, said in June it had pretax profit of at least A$35 million in the year ended March 31, 2002.
"The results are going to be very, very good" for the year ending March 31, 2003, said UK entrepreneur Branson in an interview. The carrier will probably sell shares to the public in the first half of next year, he said.
Brisbane-based Virgin Blue survived a price-cutting campaign in the Australian market that left dominant Qantas Airways Ltd as its only competitor. The no-frills carrier wants to build on its success by selling shares to the public early next year.
"That's maybe a bit earlier than we expected," said Greg Goodsell, an analyst at BT Funds Management Ltd. "It is a reflection of the business going very well." In March, Branson sold a 50 percent stake in Virgin Blue to Australia's Patrick Corp. for A$260 million. Patrick shares rose 0.2 percent to close at A$15.97.
Rival Qantas last week raised A$600 million by selling new shares to institutional investors and plans to raise A$200 million more by selling new stock to individual investors. After posting net income of A$428 million for the year ended June, Australia's largest airline, with an 80 percent local market share, said it received "excess demand" for the share sale.
Virgin Blue's capital-raising plans may be hindered by its lawsuit against Sydney Airports Corp over terminal access at the airport serving Australia's biggest city.
"It will be important to get this resolved before we go ahead with an IPO," Branson told reporters in Sydney.
Virgin Blue earlier this week said it's suing Sydney Airports in a bid to secure access to gates at Australia's busiest airport.
Branson said the airport wants "considerably more" than the A$18 million Virgin Blue is prepared to pay to use part of a terminal vacated by failed Ansett.
Branson said Sydney Airports has reneged on an earlier agreement with Virgin Blue and is seeking court endorsement that the previous understanding is legally binding.
"We need to at least double the current size," said Branson. "If possible, even triple the size of it," Virgin Blue also said it will decide within two weeks whether to buy more planes from Boeing Co or switch to Airbus SAS as it seeks almost to double its fleet to 40 planes, he said.
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