Branson puts boot in over Qantas strategy

Last updated 10:23 12/02/2014

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Virgin Australia founder Richard Branson claims Qantas boss Alan Joyce is suffering for sticking to his strategy of maintaining a 65 per cent share of the domestic air travel market.

Renewing his attacks on Virgin's main rival, Sir Richard has told journalists in Dubai that it would be unfair for the federal government to provide financial assistance to Qantas.

"It would be incredulous if the government can hand over money to him [Mr Joyce] and they don't hand over money to Virgin Australia," he told Arabian Business magazine. "Every company in Australia will come begging to the government if the government allowed that to happen."

Australia's two largest airlines have been embroiled in a public spat since November when Qantas demanded the federal government step in to stop Virgin's big-three airline shareholders - Etihad, Air New Zealand and Singapore Airlines - from tightening their grip on the carrier.

Sir Richard has also told journalists in Dubai that he did not have plans to sell his remaining 10 per cent stake in Virgin Australia. It differs to his position last year when he would not commit to keeping his holdings in the airline, emphasising that the branding agreement he has with Virgin was far more crucial to him.

Qantas will renew its lobbying in Canberra this week when Joyce meets senior politicians.

The airline has been seeking financial assistance in the form of a standby debt facility from the government, a move so far met with reservations from Prime Minister Tony Abbott.

Sir Richard said Qantas had lost hundreds of millions of dollars by sticking to its strategy of holding its share of the domestic market at 65 per cent, and "now [Mr Joyce is] appealing to the government to give him money and holding his hat out like a begging bowl to the government".

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

Qantas hit back at the English businessman's comments, saying Virgin often rolled him out to the media to "distract from their bad news".

"Suggesting that Qantas should change its strategy so that Virgin can simply take our customers to reduce their financial losses is ridiculous," a spokesman said on Tuesday.

"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 their loss-making strategy. What we're asking the government for is a level playing field in the domestic aviation market."

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Sir Richard's British airline Virgin Atlantic said last week that it will stop flying between Sydney and Hong Kong in May, blaming increasing costs and a weaker Australian dollar. He put the airline's losses on the route at about A$10 million ($11 million) a year.

"I love going to Australia and the idea of having to go on Qantas or British Airways is going to be very, very painful. But hopefully we'll be back one day," he said.

- Sydney Morning Herald

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