Qantas in "deep shit", says Branson

Qantas in "deep shit", says Branson
By admin


Virgin Australia founder Richard Branson has bristled at reports that Qantas will this week lobby the federal government to help “level the playing field” with its rival in the domestic aviation market.

Qantas chief executive Alan Joyce will enter into talks with treasurer Joe Hockey and transport minister Warren Truss tomorrow. Joyce is likely to reiterate his belief that Virgin’s levels of foreign investment gives the carrier an unfair advantage in the domestic market, contributing to Qantas' forecasted $300 million underlying loss for the six months to December 2013.

But Branson insisted that it would be unfair for the government to assist Qantas financially.

“Every company in Australia will come begging to the government if the government allows that to happen,” he told journalists in Dubai as reported in the Sydney Morning Herald.

He attributed Qantas’ current financial woes to its determination to maintain a 65% share of the domestic aviation market.

“Alan Joyce is in deep shit because he drew a line in the sand,” he said.

However, Qantas implied his comments were an attempt to draw attention away from Virgin's revelation last week that it is on track to post a loss of $49 million for the half year.

“Virgin Australia often roll out Mr Branson to distract from their bad news," a spokesperson said. 

“Suggesting that Qantas should change its strategy so that Virgin can simply take our customers to reduce their financial losses is ridiculous.

“As we’ve said many times, Qantas is not asking the government for money. This is in contrast to Virgin, which has been cap in hand to the three foreign government owned airlines to fund its loss making strategy.

“What we’re asking the government for is a level playing field in the domestic aviation market, because as the Prime Minister and Treasurer have acknowledged there is currently one set of rules for Qantas and another for its competitors.”

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