Virgin chief slates Qantas debt plea

Virgin chief slates Qantas debt plea
By admin


Virgin Australia will seek financial help from the Government “within 24 hours” should Qantas be offered a debt guarantee, as hostility over the issue continues to escalate.

John Borghetti, Virgin’s chief executive, accused Qantas of peddling myths in order to secure Government assistance and rejected the suggestion that such a handout was appropriate and in the national interest.

To say the debt guarantee was appropriate it was necessary to believe Qantas was about to fold, he said.

“And Qantas is nowhere near folding,” Borghetti told ABC Radio this morning. “Now the only thing that’s happened here is that Qantas has lost some of its credit rating. It’s been downgraded.

“Well, welcome to the world of aviation.”

Asked whether Virgin would ask Canberra for a debt guarantee should Qantas’s request be granted – as seems likely – he said: “Oh, within 24 hours”.

The comments came ahead of those from Treasurer Joe Hockey who accused Sir Richard Branson of being motivated by his own interests in attacking the debt guarantee. "I am looking after the national interests," Hockey said.

Borghetti described the notion of financial help for Qantas as “bizarre”. Was it not so serious an issue for aviation and the wider free market, it would be “laughable”, he said.

“It is really quite bizarre that a government would even consider such a move to the largest player in that particular industry – a player that is anything from going under, by the way.”

Borghetti dismissed the assertion that services to regional and rural Australia would be damaged without Qantas and said Joe Hockey was wrong to suggest Qantas was an essential national service which flies to parts of Australia not served by Virgin Australia.

Without Qantas, Virgin Australia would launch flights on rural and regional routes “in a heartbeat”.

“He (Hockey) is wrong in the sense that it isn’t just Qantas now that can come to the needs of the Australian people,” Borghetti said. “You know, the thought that Qantas is the only carrier that can come to the rescue of the nation is bizarre because we not only have the capability but have helped the Government, and by the way free of charge, as opposed to be being charged by Qantas."

Asked by ABC Radio whether he was accusing Qantas of peddling myths to convince the Government of a national interest issue, Borghetti said: “Is there any doubt?”

The Virgin Australia boss repeated his backing for a repeal of the Qantas Sale Act, branding it outdated, but argued it was a separate issue to the debt guarantee.

“Just because the Qantas Sale Act is wrong, making another wrong by providing a debt guarantee does not make the situation right”, Borghetti said.

Qantas said there is "widespread agreement" that it is disadvantaged because of "current policy settings".

"We’ve said many times we don’t want a handout – what we want is fair fight, which is very much in the best interests of the travelling public," a spokeman said.

Click here for full transcript of the ABC interview with John Borghetti.

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