Virgin Eyeing US Flights by 2008

Budget airline Virgin Blue Holdings Ltd hopes to have long haul services operating from Australia to the United States in 2008.

But Virgin Blue chief executive Brett Godfrey said while a recommendation on the US option will be put to the company board before Christmas there are some difficulties to resolve.

''We clearly have some issues with daily access rights and the type of aeroplane and we still have work to do in that area,'' he said.

''But as soon as we can get everyone happy then everyone will know about it.''

Mr Godfrey said the new service was likely to be up and running in 2008, ideally in the first quarter.

''The US has been pushing for open skies and the Australians appear to be more receptive about it now,'' he said.

But the high cost of jet fuel was still causing the airline some concern.

Mr Godfrey said the company was using forward selling and options to hedge against further rises and would only drop a fuel surcharge on its ticket prices when world oil and jet fuel prices fell further.

''If we see fuel continue to decline and . . . if we see it in the high fifties we will be happy to start cutting, because we think it will stimulate to actually lower that surcharge,'' he said.

The price of crude oil was $US58.85 a barrel yesterday.

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