Virgin seeking profit, not share

Virgin seeking profit, not share
By admin

Virgin Australia chief executive John Borghetti has remained unruffled at huge capacity hikes from Qantas, again insisting he is interested in profits, not market share.

Responding to a move by its major competitor to add 900,000 seats a year on key east coast routes, Borghetti said such growth mattered little to his own strategy.

“As I keep saying, you can’t bank market share, what you bank is profits,” The Australian quoted Borghetti as saying at a business lunch yesterday. “So for us, it’s all about yield and our yield growth has been consistent. We’ve finished the first half of the financial year with over 13% yield growth. So far in the second half we’re still in double digits so I’m very confident in our strategy.”

He admitted the leisure sector was soft which he said was “understandable given the state of the world economy”.

Business travel was holding up however.

The Qantas capacity hike at a time of softening demand is likely to put further downward pressure on fares. But Borghetti said because its revenue mix had changed he was “less worried” that he would have been had Virgin not began targeting higher-end and business traffic.

Shifting from a low cost airline was “absolutely the right thing to do”. The carrier would have been “very exposed” otherwise, he said.

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