Virgin in talks with Boeing for $3.5 billion plane deal

AustraliaÔÇÖs second largest airline, Virgin Blue, is reportedly in talks with Chicago-based aircraft manufacturer Boeing for a fleet upgrade that could be worth $3.5 billion.  According to Australian newspaper The Age, the Brisbane, Queensland-based low-cost airline is seeking to make upgrades to its 65-strong fleet of Boeing 737s. The purchase of between 30 and 50 single-aisle aircraft could be worth $3.5 billion to the US company. The new planes would replace the 737s that Virgin Blue has on lease until 2011. Virgin BlueÔÇÖs chief executive, Brett Godfrey, said that the past year has been the most difficult for the aviation industry since World War II, with the recession, high oil prices and swine flu combining to impact heavily on the sector. He also said that he could not yet see any firm indicators that demand for air travelling was starting to increase, despite signs of stabilization in the economy globally. The biggest risk for airlines in the coming years would be speculators pushing up oil prices while travel remained stagnant, he predicted. Despite this, Godfrey said that now was the ideal time to take advantage of lower prices set by manufacturers in order to encourage sales, especially in the light of a recent spate of orders being cancelled by airlines.  Godfrey went on to confirm that the company would be able to finance the purchase of new planes, despite financial pressures. "We are in the market because the market is right and we don't want to miss the opportunity," the newspaper quoted him as saying.  Virgin is not in talks with Airbus about buying new aircraft, the paper said. Virgin Blue was founded in 2000 as part of the global Virgin Group and flies to 27 destinations. * ┬á┬á┬á┬á┬á┬á┬á*┬á┬á┬á┬á┬á┬á┬á *