THE Virgin Group is set to invest £2m in terminal infrastructure to support its start-up budget airline in Australia.
Virgin Australia chief executive Brett Godfrey is reportedly unhappy with plans from Melbourne Airport to build a new terminal for several airlines to use.
Instead, Virgin plans to construct its own dedicated terminal, which it claims would allow it to keep costs down in keeping with starting a low-cost airline.
Virgin is expected to base its new carrier in Melbourne in time for flights to start in June to Sydney, Brisbane and Perth.
Singapore Airlines is considering investing in the Australian venture following it taking a 49% stake in Virgin Atlantic. The Asian carrier would aim to feed services into Australia to boost passenger numbers on the new low-cost airline.
Qantas and Ansett Australia have promised to fight the UK carrier on price. Virgin is promising one-way £40 fares, significantly undercutting current prices.