Branson steps up Kiwi dogfight

SIR Richard Branson's no-frills Australian airline Virgin Blue is to broaden its challenge to Qantas after today unveiling a service to New Zealand.

The service - called Pacific Blue - will begin between Brisbane and Christchurch in February, with an initial one-way fare of NZ$99 (£36.50).

Fares will later revert to NZ$189 one-way, compared with the NZ$243 single fare offered by BA affiliate Qantas and Air New Zealand after recent discounts.

'Clearly Air NZ's, and now Qantas', sudden about-face on air fares would suggest that they know that the days of gouging the travelling public are over,' said Virgin Blue chief Brett Godfrey.

The move by Virgin, partnered in Australia by Patrick Corporation, could help Qantas and Air New Zealand with their proposed A$500m equity alliance, rejected by Australian regulators on competition grounds last week. They will appeal against the decision - using Virgin's entry into the market to justify the deal.