Virgin to start holiday airline

RICHARD BRANSON'S low-cost carrier Virgin Express is set to expand its UK operations by launching a package tour airline.

Reports suggest that the Brussels-based Virgin Express is preparing to take over the small charter carrier Sabre Airways and merge it with the independently-owned Virgin Holidays to launch a new holiday airline, Virgin Sun.

Speaking at the start of Virgin flights from London Stansted to Brussels, Mr Branson said he expected to make an announcement on the acquisition "in the next week or so." He confirmed recent reports that he was also seeking an operating licence in Ireland.

He denied this meant Virgin was preparing to move out of Belgium, where it is still campaigning for a cut in the country's high employment taxes, but warned that growth in British services might not be handled by the Belgian-based carrier if the tax issue was not resolved.

Meanwhile, Mr Branson said Virgin's new Stansted flights would compete with British Airways' low-cost airline Go, which is due to launch its maiden services from London's third airport on Friday.

Virgin Express is not competing directly on any routes but is offering fares from Stansted via Brussels to Rome, Milan, Copenhagen, Madrid, Barcelona and Nice for around pounds 98 return.