Virgin Airlines Winning The Battle Against Qantas

Posted on August 30th, 2012 by in Aviation News

As far as invincible airlines go, it was believed that Qantas was quite the market leader for the aviation industry of Australia. But recently it seems that the dynamics have drastically changed. The battle began when a choice had to be made for Qantas’s new chief executive. The two individuals for the task were John Borghetti and Alan Joyce. Joyce ended up with the position and Borghetti chose to resign.

Borghetti went on to become the chief executive of Virgin Airlines and can be attributed as a contributing factor to its recent rise to power. In any case he had ample experience to rejuvenate the airline’s fallings earnings as he had spent a very long time working for Qantas in a senior capacity. The discount model that Virgin came out with a few years ago proved to be an utter disaster and it took quite some time for the airline to bounce back from its losses.

Borghetti who was well versed in the high profit and high overall revenue techniques that Qantas so frequently uses was just what Virgin needed. The new chief executive started almost immediately to revamp Virgin’s scale of operations and bring them to par with the market leaders in the industry. The benefits of coming up with frequent flier passes, business class flights and other such perks has been a boost for Virgin so far. So much so that Qantas is worried about losing its superior market share.

When Borghetti was under Qantas’s employment he was particularly enthusiastic about one specific deal with UAE airline Etihad. When Joyce took over he did not go through with the deal so Virgin Airlines could think of nothing better than to capitalize on it themselves. Etihad is buyer of Virgin shares but the chances of a takeover are minimal and in no one’s best interest.

Qantas appears to be in something of a tough spot now and is facing heavy competition from Virgin. Borghetti has a vision of Virgin Airlines as being something more than just a budget option. But he is however very keen to keep prices down for economy class seats to boost the company’s competitiveness.