New Sydney-Los Angeles route aboard Virgin

SYDNEY, Australia -- Virgin Blue Holdings Ltd., Australia's second-largest airline, has announced a new budget service between Sydney and Los Angeles.

The new flights, under the title of V Australia, would begin in mid-December and be up to 16 percent cheaper than existing services, the company said.

British mogul Richard Branson, chairman of Virgin Group, said the new services were a logical extension of the company's existing air operations.

"With Virgin Blue flying within Australia and to New Zealand and the South Pacific and Virgin Atlantic between Australia, Hong Kong and London, V Australia flights to the United States are the obvious last piece of the puzzle," Branson told reporters in Sydney at the launch.

The announcement comes eight years after the launch of the budget carrier and weeks after the Australia and U.S. governments signed an open skies agreement, allowing Australian or U.S.-owned airlines to fly freely between the two countries.

The Brisbane-based airline will offer return economy fares from $1,740, a 16 percent discount to the current lowest available published fare on the route, Virgin Blue said.