Virgin Australia CEO John Borghetti, in an Open Letter to the Australian Government, stated (29-Nov-2013) if Australia truly wants a “level playing field”, then any measures that the Government plans to take to support Qantas should be offered to Virgin Australia. Mr Borghetti said: “We believe that this country needs at least two strong airlines, in order to ensure the travelling public are not faced with high airfares and restricted choice”. He continued, "Virgin Australia has succeeded against the odds, in a very difficult marketplace with a major and dominant competitor three times its size that appears intent on flushing it out of the market. If any Government support was given to the dominant player, we would expect the same level of support. There have been media reports that the Government offered comfort letters to Qantas’ credit rating agencies, prior to our capital raising. I would also note that if Virgin Australia had been afforded the benefit of such a letter, it would have enabled us to achieve superior outcomes from both the recent debt bond issue undertaken in the US market and the capital raising that is underway". [more - original PR]
Virgin Australia CEO asks for same level of support from the Federal Government
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South Pacific aviation markets will be defined by China’s expansion
The nature of the South Pacific's geography makes finding the right partners for its airlines essential for their survival in international long haul markets – as most are.
The region is characterised by relatively liberal access regimes and by partnerships of varying levels – in New Zealand especially, where Air New Zealand’s international network is dominated by JVs. Virgin Australia has built a ‘virtual alliance’ alongside HNA, Singapore Airlines, Etihad and Delta, with very little of its own metal flying outside Australia. At Qantas Group, international performance has improved markedly following its Emirates partnership, as its operating focus has shifted from Europe toward Asia and North America, with local JVs, and close partnerships with American Airlines and China Eastern continuing to grow and mature.
For all airlines in the region, the China market will define much of the growth over the coming decade. (This report is taken from the Jul/Aug-2016 issue of CAPA's Airline Leader)
Air New Zealand defends Australia-USA transit market as Qantas plans further USA growth with 787-9s
Air New Zealand is turning up the volume. For years the airline had a tidy, under-the-radar business carrying transit passengers between Australia and the US over its Auckland hub. Air NZ is now directly targeting the Australia-USA market with a sales and marketing push that includes an advertising campaign called "Better Way to Fly". CEO Christopher Luxon said in a statement that "capturing just a little bit more of that market would see hundreds of thousands more Aussies flying with us to North and South America...Many Australian travellers still think of us as a trans-Tasman carrier and that’s a perception we’re determined to change."
The shift that Air NZ envisages is being sought now – and not five or even 10 years earlier – largely because of external factors and competition. Air NZ's marketing may suggest an opportunistic push, but the reality is Air NZ is on the defensive. In the Australia-Americas market competitors have lowered their costs, adding city pairs, product improvements and significant capacity growth. 2017 and 2018 are expected to mean even more growth as a resurgent Qantas adds 787-9 services between Australia and the US, and in particular – to Dallas.