VIRGIN AUSTRALIA ISSUES A STATEMENT

The playing field is not tipped in Virgin Australia’s favour.

The proposition that Virgin Australia has access to cheaper capital by virtue of our shareholder base is completely false.

Virgin Australia is currently in the process of a capital raising, which is a standard way that publicly listed companies raise funds.

In fact, Air New Zealand and Singapore Airlines, two of Virgin Australia’s cornerstone investors, are both publicly listed companies, not state-owned enterprises, that are expected to make a profit and a return on their investments.

The vast majority of Virgin Australia’s transformation over the past three years has been funded from its own balance sheet, not from foreign government capital as stated by our competitor.

As a listed company, Qantas also has the ability to undertake capital raising activities. Qantas has regularly raised equity capital from global investment markets – in fact it has done so nine times over the past decade, generating funds of over $1.2 billion. Large globally-focussed institutional investors represent over half Qantas’ share register, which have tens of trillions of dollars available to invest in debt and equity markets.

Virgin Australia’s capacity increases since 2010 have been limited to routes that have been in need of further competition and frequencies, such as trans-continental routes and important regional routes throughout Australia. It is important that Australia recognises that during the 2013 Financial Year, Qantas Group domestically added double the capacity to the Australian domestic market, to maintain its own 65% market share strategy, that Virgin Australia added*.

Virgin Australia’s strategy is, and always has been, to bring strong competition to all sectors of the Australian market, not to destroy the competition.

We want to operate in a competitive environment and will continue to serve the interests of the Australian public.