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Weak consumer confidence validates 'game change' strategy: Virgin Blue

24-Feb-2011 9:57 AM

Virgin Blue CEO John Borghetti stated that the airline’s strategy of capturing a larger share of Australia’s corporate travel market is validated by increased competition at the leisure end of the market and weak consumer confidence (Australian Financial Review/The Australian, 24-Feb-2011). The CEO does not expect leisure traffic to pick up until the domestic market sheds capacity and there is a strong return in consumer confidence. Mr Borghetti noted that Qantas’ results were boosted by the resilience and strong return of the corporate travel market. The airline plans to launch new uniforms, a new business-class product and new airport lounges in a bid to lure more corporate travellers. It currently has about 10% of the corporate market, which it plans to increase to 20%.

Virgin Blue: “In difficult times, when interest rates go up, discretionary expenditure is the first thing that gets hit and people cancel their holidays. The economy needs to strengthen.” John Borghetti, CEO. Source: Australian Financial Review, 24-Feb-2011.

Virgin Blue: “Look through their [Qantas’s] financials and you can see where the profit came from. We can jump on this corporate market wave and position ourselves very appropriately.” John Borghetti, CEO. Source: Australian Financial Review, 24-Feb-2011.