Virgin Australia has lashed out at Treasurer Joe Hockey for calling it a “3000-pound gorilla”, saying it’s a “bit rich” to accuse it of being a bigger market player than Qantas.
Hockey took a veiled swipe at the foreign-backed airline last week when considering Qantas’ call for government assistance and revisiting legislation which shackles the national carrier from foreign ownership.
He said the arrival of a “3000-pound gorilla” meant the Qantas Sale Act put the smaller “800-pound gorilla” at a disadvantage.
Virgin Australia CEO John Borghetti says it is “beyond belief” to claim the airline, which is backed by Singapore, New Zealand and Middle Eastern investors, is deliberately running at a loss in order to increase its market share and send its rival broke.
“Let’s look at the facts: Qantas is much bigger than us, has chased the dominant position in every aspect of the domestic market and is hell-bent on adding two aircraft for every one we add,” he told ABC radio on Tuesday.
“And, I think it’s a bit rich turning that around.”
The federal government reportedly is looking at a two-pronged response to help the national carrier with a debt guarantee and, in the long term, repealing the Qantas Sale Act which restricts the level of foreign ownership in the company.
But it will wait until after February 27 when Qantas releases its half-year results, Fairfax Media reports.
Borghetti said any government-backed debt guarantee should be extended to all airlines, including Virgin.
He said he would be “perplexed” if the government gave Qantas a debt guarantee and repealed the Qantas Sale Act.
“All we’ll be doing is making two wrongs and that won’t make a right.”
Virgin’s Sir Richard Branson also attacked the gorilla reference in full-page newspaper ads at the weekend, in which he also warned the government of waning foreign investment if it proceeded with helping Qantas.
Borghetti said that warning was “hard to refuse”.
“Anytime the government interferes in a free market environment on publicly-listed companies, it conjures up all sorts of questions … along the lines of retrograde.”
