Mr Godfrey said likely destinations included Japan, northern China and parts of south and South-east Asia, which could be serviced by its current fleet.

'I think the Asean region is looking at opening up its borders among those member nations, so I think that's probably the next big opportunity,' Mr Godfrey told CNBC business television on Monday, referring to the 10-member Association of South-east Asian Nations.

He said Virgin Blue expects to lose between A$50 million and A$80 million (S$64 million and S$103 million) in developing V Australia, adding that the startup costs would be funded out of working capital.

His comments come after Australia and the United States on Friday signed a bilateral 'open skies' aviation agreement, clearing the way for Virgin Blue to continue its plan to begin flights to the United States by the end of 2008. -- AP