SYDNEY, Feb 20 Australia's Virgin Blue Holdings Ltd. VBA.AX said on Tuesday it wa

SYDNEY, Feb 20 (Reuters) Australia's Virgin Blue Holdings Ltd. said on Tuesday it was close to signing an order for new Boeing planes worth up to US$2.6 billion ahead of the launch of long-haul flights to the United States next year.

Virgin, the nation's second-largest airline, also firmed up orders for new planes from Brazilian planemaker Embraer as it expands in Australia and the South Pacific.

Virgin, which earlier reported an 81 percent jump in first-half profit, at the upper end of analysts' estimates, said it expected to sign off on a order for seven Boeing 777-300ER widebody aircraft within weeks, with options for a further six.

Virgin, which had also been considering Airbus A340s, said the orders had a list price of US$2.6 billion. But customers often get big discounts on published prices.

The carrier, which is expanding aggressively as it competes with larger rival Qantas Airways , also exercised options for three Embraer E-190 and three Embraer A-170 planes for delivery in 2008/09.

The orders are on top of the 14 Embraer planes it ordered last year to be used on routes to islands in the South Pacific.

Virgin shares initially fell almost 7 percent before recovering to trade flat at A$2.66 by 0208 GMT.

Analysts said investors were jittery as Virgin ramped up its capital spending and ahead of the possible introduction of a rival domestic airline by Singapore's Tiger Airways.

''The result was strong and in line with expectations but the challenge for Virgin has been accentuated by the proposed entry into the market by Tiger,'' Fabian Babich, an analyst at brokerage BBY said.

''Every time Virgin commits additional capital to the business the stock price is going to be that much more sensitive.'' Virgin Blue said net profit for the six months to Dec. 31 was A$124.3 million ($98 million), compared to A$68.7 million a year ago.

It also tipped full-year earnings to be more than 60 percent higher than a year ago on the back of greater protection against higher fuel prices and more business travel.

Chief Executive Brett Godfrey said the airline wanted to start long-haul flights in the second half of 2008.

He told reporters the new service would be ''U.S. centric.'' but was also looking at flying to Asian destinations such as Hong Kong and Japan and possibly Canada.

''Don't be surprised if we don't serve the traditional markets is all we can say today on it,'' he said, adding Virgin had applied for access rights to fly to the United States.

He also said Virgin was considering launching its own low-cost carrier in response to competition from Qantas offshoot Jetstar but nothing had been decided.

Godfrey told reporters the Boeing orders were ''pretty well there'' with a formal announcement expected within weeks.

Australian transport group Toll Holdings Ltd. owns a 62.3 percent stake in Virgin Blue which it inherited when it launched a takeover for ports operator Patrick Corp.

Godfrey said the company was not currently considering a management buyout but did not rule it out if shareholders decided they wanted to exit the airline.

Virgin shares have gained more than 40 percent since Qantas confirmed it had been approached by a private equity consortium in November last year.

Virgin said it had 95 percent of its fuel requirements hedged at US$70 a barrel for the rest of the current fiscal year.

($1=A$1.27) REUTERS CS KN1107