Australian airline Virgin Blue Holdings Ltd said it planned to invest A$70 million (US$62 million) in a new long-haul carrier it hopes will be fl ying on lucrative US routes by late 2008.

The new airline, called V Australia, still needs US regulatory approval for its plan to operate 10 weekly services between Australia and the US, which requires changes to existing bilateral air service agreements.

Virgin is spending more than A$2 billion on six B777-300ER widebody aircraft for the new airline, which it said would be profi table in the second year of operation.

Virgin Blue, which has about one-third of the Australian domestic market, expects V Australia to initially take about 12 percent of market share on Australia-US routes, where it could compete on some routes with United Airlines and Qantas.

Virgin Blue chief executive Brett Godfrey said he expected V Australia to lose money in the fi rst 18 months of operations and he declined to say which cities the airline would fl y to. Local media reports have said it has targeted Los Angeles. The airline may also fl y to some destinations in Asia.

Virgin, which is 62 percent owned by Toll Holdings, also fl ies to New Zealand, Fiji and Tonga, under the Pacific Blue and Polynesian Blue names.