18 Feb 2014

Aust eyes NZ Govt role in Virgin

10:50 pm on 18 February 2014

But that's being strongly disputed by Virgin chief executive John Borghetti.

The Australian Treasurer Joe Hockey says that New Zealand Government ownership of Air New Zealand - Virgin Australia's biggest shareholder - means that it's rival Qantas needs state support.

But that's being strongly disputed by Virgin chief executive John Borghetti.

Qantas is lobbying for Government help and Virgin Australia is lobbying against Qantas.

Virgin Australia chief executive John Borghetti.

Virgin Australia chief executive John Borghetti. Photo: AFP

Mr Hockey suggested Virgin Australia was a "3000-pound gorilla" because it is largely owned by three government-backed airlines - Air New Zealand, Etihad and Singapore Airlines.

The New Zealand government has a stake of more than 50 percent in Air New Zealand, but Mr Borghetti disputed Virgin was backed by foreign governments.

"That is clearly false. Singapore and Air New Zealand are publicly listed companies. In New Zealand's case, of course, the New Zealand government owns part of it but it operates as a private company," he said.

Free ride

"This is all about Qantas trying to get a free ride, and there's no doubt about that," Mr Borghetti said.

"Let's look at the facts: Qantas is three to four times bigger than us; it has hundreds and hundreds of millions, in fact it's got almost $3 billion in cash.

"It has dominant positions in every single sector of the domestic market; it is hell bent, and by their own words by the way, of adding two aircraft for every aircraft that we add irrespective, irrespective of the financial outcome, so I think it's a bit rich turning that around."

Mr Borghetti argues Qantas is not about to collapse, and that Virgin can do its job just as well.

"It isn't just Qantas now that can come to the needs of the Australian people," he said.

"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 being charged by Qantas."