Borghetti rubbishes Qantas's capacity claims

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Virgin Australia’s chief executive John Borghetti has attacked claims by rival Qantas that the carrier has been on an offensive adding capacity to the domestic market.

Speaking at the airline's release of its half-yearly results, he described his rival's claims that Virgin was flooding the market as "laughable."

The airline presented data that shows that in the 2013 financial year Virgin added 900,000 seats to the market, while the Qantas Group added 3 million seats.

Borghetti adds that it has been a consistent theme for the last three years as Virgin has worked to re-position itself as a business-focused airline.

“Whether you look at it on an annual or a cumulative basis... Qantas increased over the last three years 7.1 million seats, we increased 2.8 million seats,” he says. “So I think the accusation of us flooding the market with capacity, I think you can draw your own conclusions."

Virgin says that the majority of its additional capacity has come from launching new routes, including a number of regional services that were previously monopolised by Qantas. By comparison, Qantas added 520,000 seats on existing routes last year, with only 50,000 seats on new routes.

Borghetti also rejected Qantas’s claims that his airline is bent on seizing market share.

“We’re not in a race here to see who’s got the biggest market share,” says Borghetti. “We’re here to deploy a strategy that says that we need frequency of a certain amount, capacity of a certain amount to be relevant to certain markets. That’s all we’ve done and that’s all we’ll continue to do.”

Qantas has announced that it will add 3-4% capacity to the domestic market over the six months to 30 June, which it claims is about countering the expansion of Virgin.

By contrast, Borghetti refused to give any guidance on capacity or its fleet plans for the year ahead, citing the competitive tensions with Qantas as the reason.

“When you have a competitor that quite clearly says they are going to put on two planes for every plane you’re going to put on, why would I tell my competitor how many planes I will put on? So that’s not going to happen again,” he says.