Regional deregulation delay causes angst
The airline wanted to tender for several regulated and subsidised routes in regional Queensland when contracts with QantasLink, Rex and Skytrans expire next year, but said it was told the Department of Transport was rolling over the agreements for two years.
Virgin said that contrary to some reports, it had no intention of pulling its 1200 staff out of Brisbane.
"Competition brought about by deregulating markets will no doubt bring lower fares and deliver better access to regional communities, reduce costs to business and boost tourism," said Virgin's head of corporate affairs, Danielle Keighery. "If regulation is to continue on certain routes, they need to be put out to tender in a transparent process."
The Queensland Premier, Campbell Newman, said the government was not favouring Virgin's rivals.
"The point is that we are a government that believes in deregulation of air routes and that's what's going to happen," he said.
The Deputy Premier, Jeff Seeney, said Virgin had a legitimate claim, as some regional routes such as Cairns to Weipa and Brisbane to Roma had become commercially viable. The Brisbane to Roma route served about 150,000 passengers last year, with a return fare of about $730.
Virgin's chief executive, John Borghetti, is to meet Mr Newman to discuss the matter.
Meanwhile, Virgin has stepped in to help fill a void in funding for Tourism Australia's marketing campaigns, sealing a $12 million, three-year deal with the tourism body after Qantas's surprise decision to cut financial ties.
Qantas severed its 40-year partnership with the tourism agency in November, saying its chairman, Geoff Dixon, who ran the airline from 2001 to 2008, was in a position of "untenable potential conflict" in being linked to a rebel group agitating for a change of direction at the national carrier.
Frequently Asked Questions about this Article…
Virgin Australia expressed frustration after the Department of Transport rolled over existing agreements for two years, delaying the planned opening up of regulated and subsidised regional Queensland air routes that Virgin wanted to tender for when current contracts expire next year.
The current contracts cover services operated by QantasLink, Rex and Skytrans. The article mentions specific regional routes such as Cairns to Weipa and Brisbane to Roma as examples of routes that have become commercially viable.
According to Virgin’s head of corporate affairs Danielle Keighery, competition from deregulating markets is expected to bring lower fares, better access for regional communities, reduced costs to business and a boost to tourism. She also said any routes that remain regulated should be put out to tender in a transparent process.
No. Virgin said it had no intention of pulling its 1,200 staff out of Brisbane, contrary to some reports.
Queensland Premier Campbell Newman said the government supports deregulation of air routes and is not favouring Virgin’s rivals. Deputy Premier Jeff Seeney acknowledged Virgin’s claim as legitimate for some routes that are now commercially viable, and Virgin CEO John Borghetti was scheduled to meet Mr Newman to discuss the matter.
The article states the Brisbane to Roma route served about 150,000 passengers last year, with a return fare of roughly $730, indicating it has become commercially viable.
Virgin stepped in to fill a funding gap for Tourism Australia’s marketing campaigns, signing a $12 million, three-year deal after Qantas unexpectedly cut its financial ties with the tourism body.
Qantas severed the long-standing partnership in November, saying its chairman Geoff Dixon was in an 'untenable potential conflict' because of his association with a rebel group agitating for change at the national carrier.
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