Virgin stands firm amid Qantas investment rage

Virgin stands firm amid Qantas investment rage
By admin

Virgin Australia has hit back at Qantas’ objection to its $350 million foreign capital injection by three state-owned airlines, insisting the investment will ensure it continues to bring “much needed” competition to the Australian aviation market.

Yesterday, the Australian Financial Review reported that Qantas chief executive Alan Joyce had demanded the Federal ­Government halt the $350 million raising from Air New Zealand, Singapore Airlines and Etihad Airways, branding it the “final act” by carriers determined to bring it down.

In a letter to the prime minister, transport minister and all state governments, Joyce insisted the deal amounted to a staggered foreign takeover of its rival airline, flouting restrictions on foreign investment. He also urged for the Qantas Sale Act to be revisited as part of the review.

However, Virgin claimed its five-year strategy was designed to deliver competition to the aviation sector and claimed that Australia had benefited as a result.

A statement released yesterday afternoon pointed to its expansion as a boon for the Australian economy, contributing more than 3000 jobs and lowering airfares.

The airline insisted its actions had ended Qantas’ “monopoly” on the corporate travel market, with its capacity increases restricted to routes that were in need of further competition.

“The capital raising announced on 14 November 2013 is designed to enhance Virgin Australia’s liquidity and gearing position to ensure we are in a stronger position moving forward, so that we can continue to bring much needed competition to the Australian aviation market and continue to grow jobs in Australia,” Virgin said.

Even with the three major airline shareholders assuming board representation, the board would continue to be mainly independent with an independent chairman, it maintained.

“We know we have chosen the right partners with the right intentions. They are all aligned in the common goal of wanting Virgin Australia to provide strong competition in the Australian aviation market.

The landscape of Australian aviation has changed forever. It is no longer a monopoly.” 

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