Grabbing headlines on a recent tour of Australia, Sir Richard Branson, head of the Virgin Group, outlined plans to challenge the alliance partners Qantas and British Airways on several fronts.
Leading the charge is Virgin Atlantic, which Branson says next year will launch services on the so-called Kangaroo Route between Australia and the UK. Virgin Atlantic already has approval from Canberra and London, and is seeking clearance from Hong Kong, Branson's preferred stopover for the route. Barring that, the carrier will use Shanghai or Bangkok.
With Virgin Atlantic planning to compete with BA and Qantas on the Kangaroo Route, Branson is complaining to the Australian Competition and Consumer Commission (ACCC) about the BA-Qantas joint service agreement due for renewal next year. That agreement, which the ACCC reluctantly approved in 1995 and extended two years ago for less time than BA and Qantas wanted, is Australia's equivalent of antitrust immunity. Virgin warns: "We will urge competition authorities to look more closely at the options which enhance competition - not consolidate it into fewer hands."
The Virgin Group is raising the level of its rivalry with Qantas on other fronts. Virgin Blue has settled its Sydney airport dispute, clearing the way for it to move into the former Ansett terminal by mid-December and resume its domestic growth. It soon expects to announce an order for 30-40 new aircraft.
Virgin Blue has also unveiled a frequent-flyer plan aimed at luring domestic passengers away from Qantas. It has also questioned further Qantas route awards to Hong Kong. Finally, Branson warns that Virgin is likely to oppose any Air New Zealand- Qantas deal.
Virgin's rivalry with BA-Qantas is shaping up to become the Asia-Pacific equivalent of Virgin's long-running battle with BA and its partners over the North Atlantic.
DAVID KNIBB BRISBANE
Source: Airline Business
