Virgin Blue restructure to stimulate change at home, as Qantas and Tiger sharpen their attack

Virgin Blue Group CEO, John Borghetti, on 16-Aug-2010, announced the first phase of the group’s network review aimed at “delivering increased competition and capturing growth opportunities”, including Pacific Blue's exit from the New Zealand domestic market. The move is probably a good indicator of where the Virgin Blue Group will be heading in coming months, as it develops into a more corporate entity under the new leadership. [3309 words]

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This report contains the following subheadings:

• Pacific Blue expands SE Asia/Pacific network, exits NZ domestic market
• V Australia to focus on long-haul with US, South Africa and Thailand
• An increased focus on partnerships
• 490,00 seats added to domestic network
• Virgin Blue to restructure to double business market share; intensifies competition with Qantas
• To redesign network, product and branding
• Joint ventures and new staff
• Virgin Blue to integrate with V Australia as part of restructuring efforts?
• Plans criticised by Singapore Airlines – a potential partner?
• Virgin Blue twice issues profit warning for FY2010
• Expects tough market conditions to year-end; witnessing “really radical decline in yields”
• Tiger Airways Australia creating significant pressure on incumbents
• Qantas benefiting from two-brand strategy
• Qantas determined to hold its line in the sand; there will be pain ahead for all

This report contains the following charts and tables:

• Virgin Blue Group route changes: 16-Aug-2010
• Virgin Blue int’l pax numbers and domestic pax numbers growth: May-2009 to May-2010
• Virgin Blue domestic PLF and Int’l PLF: May-2009 to May-2010
• Domestic Air Fare Index – Best Discount (July 2003 = 100): Aug-2005 to Aug-2010
• Domestic Air Fare Index – Business Fares (July 2003 = 100): Aug-2005 to Aug-2010
• Qantas and Virgin Blue share price index: Jan-2010 to Aug-2010