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These could be converted from three seats in economy configuration to two seats for premium economy.The premium product offered priority check-in, larger baggage allowance, lounge access, priority boarding, increased legroom and all-inclusive in flight entertainment, meals and beverages on board.

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In 2006, in an effort to compete with Qantas, Virgin Blue started exploring these relationships, forming frequent flyer agreements with Emirates, Hawaiian Airlines and Malaysia Airlines.

Virgin Blue also has an Interline Agreement with Regional Express Airlines for travellers to and from smaller regional centres in the eastern states of Australia, and operates its own two routes with Virgin Australia Regional Airlines in Western Australia.

It also gave Virgin access to terminal space without which growth would have been significantly limited.

Delays in negotiating access to the former Ansett terminal at Sydney Airport however, forced Virgin to use its original terminal there—a collection of prefabricated buildings without aerobridges—longer than was needed.

In 2011 it took this strategy further by introducing new uniforms; new catering options on board; new widebody aircraft to compete with Qantas on Perth–Melbourne–Sydney services; and the concurrent introduction of business class in January 2012; Initially offering seven return flights a day between Brisbane and Sydney, this has since been expanded to cover all major Australian cities and many holiday destinations.

The Virgin Blue name was the result of an open competition; it was a play on the predominantly red livery and the Australian slang tradition of calling a red-headed male 'Blue' or 'Bluey'.The timing of Virgin Blue's entry into the Australian market was fortunate as it was able to fill the vacuum created by the failure of Ansett Australia in September 2001.Ansett's failure allowed Virgin to grow rapidly to become Australia's second domestic carrier, rather than staying just a cut-price alternative to the established players.By the closure of the offer, Patrick held 62% of the company, giving it control. In May 2006 Toll Holdings acquired Patrick and became the majority owner of Virgin Blue.In July 2008 Toll sold its majority holding via a special dividend to hold 1.7% of the company.These were placed on limited-frequency services before full-scale operations were launched on 4 February 2008 with services from Sydney to Canberra (branded as 'Capital Jet' services), The flights to Canberra and the regional centres signified an effort to compete more directly with Qantas and its subsidiary Qantas Link operation, which flies to all three cities, and with independent Regional Express Airlines.

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