Jetstar warns of dangers of Virgin Blue strategy

Jetstar CEO Bruce Buchanan stated Virgin Blue's strategy to reposition the brand and forge international alliances "has the potential to backfire" (Australian Financial Review, 17-Jan-2011). As Virgin changes its target market, Mr Buchanan stated Jetstar "is happy to expand into the void" left by Virgin Blue in the leisure market, and leave the premium segment to Qantas.

Jetstar: "It's a real double-edged sword. If Virgin succeeds in shifting the brand and value proposition to a premium proposition, they're going to alienate the leisure customer and that's going to be good for us. Or if they don't succeed that's good for Qantas, so it's a win-win for us as a group. I can't see any downside here." Bruce Buchanan. CEO. Source: Australian Financial Review, 17-Jan-2011.