Virgin Blue To Remain Independent04/09/2001
Richard Branson today rejected a $250 million offer for Virgin Blue by Air New Zealand, following strong support from a number of key politicians, the travelling public, and the entire Virgin Blue Staff.
In Melbourne today, he issued the following statement:
"Australians have benefited dramatically since Virgin Blue cut airfares in half over 12 months ago. Four million more people flew this year than last. People who literally couldn't afford to travel by air before are now flying often. Although we could have walked away with a $250 million net profit on our investment, I felt it would be selling out both the Australian public and our delightful staff at Virgin Blue. Instead we will invest many millions more in expanding our fleet and flying new routes. If Ansett feels that some regional routes are not viable due to their higher costs, we would be happy to assist by offering seats to them on flights we would operate. This will make sure the regions don't suffer. For many years the Virgin Group has had an excellent relationship with both Ansett and Air New Zealand. Air New Zealand assists us in heavy maintenance of Virgin Atlantic's 747's while Ansett International and Virgin Atlantic jointly provide the highest quality service on the Kangaroo route.
Because Virgin has the youngest fleet of planes in Australia, our costs are a fraction of the competition. Fuel costs are lower while maintenance and reliability are the best. This enables us to keep our fares low."
Today I have also spoken at length with Professor Alan Fells of the ACCC who confirmed to me that he considered issues relating to airline competition to be one of his highest priorities and that he has the resources and determination to pursue these matters aggressively. I understand that he has a special team investigating our complaints regarding Qantas's predatory practices. Additionally, over the last few days I've talked to senior politicians of all major parties. I am confident that they appreciate the benefits of lower fares and more competition and will do something after the election to give the authorities more powers to act against the blatant anti-competitive behaviour that was used to drive out Compass, Impulse and hundreds of other small companies in other industries.
Premier Peter Beattie has written letters today to both the Prime Minister and the Leader of the Opposition urging them to take prompt action on this matter. We've also had tremendous support from many political leaders including Premier Bob Carr, Premier Bacon, Chief Minister Clare Martin, and Senator Natasha Stott Despoja of the Democrats"
This week Virgin announced new routes to Launceston, Tasmania and Darwin.
Virgin Blue will carry over 4 million people over the next year and will create another 1000 jobs in its own right. This figure does not include the 1000's of more jobs that are being created by the boosts to tourism and the savings on company bottom lines.
Virgin Blue operates the most modern, technologically advanced aircraft in Australia today, with an average age of less than 5 years, compared with Ansett's average fleet age of 11.7 years and Qantas with an average fleet age of 10.8 (Salomon Smith Barney 2001 Fleet handbook)