Sir Richard Branson's Australian budget airline Virgin Blue has announced a major expansion of its fleet.

It has placed an order for up to 50 Boeing 737 aircraft at a total potential cost of $3.1bn.

Sir Richard Branson's airline has become the second largest in Australia

The airline says it has requested 10 jets to be delivered by 2004 and may buy 40 more within 10 years.

The purchases will help the company "seize new domestic and international growth opportunities", said Virgin Blue chief executive Brett Godfrey.

The airline is planning to move beyond the realms of domestic carrier and serve cities across the Asia-Pacific, including Singapore, Shanghai, Tokyo and Bali.

Investor opportunities

Created three years ago, Virgin Blue is currently competing with Australia's national airline Qantas for a share of the domestic market.

It has gained increased access to Sydney Airport following a six-month dispute with the airport owners.

The newcomer has seized 15% of domestic market share and is aiming to capture a third of the market this year.

It is the first time that Virgin Blue has bought rather than leased aircraft.

US manufacturer Boeing beat Europe's Airbus in supplying the aircraft after 10 months of negotiations.

Sir Richard has announced plans for a $1.5bn flotation of Virgin Blue on the Australian stock exchange this year.

He sold half of his airline to Australia's Patrick Corp in March last year, gaining a new injection of capital.