GOVERNMENT support for a Qantas debt guarantee would entrench “an age of entitlement” that was counter to free enterprise and a free market, Virgin Australia chief executive John Borghetti has warned.
Mr Borghetti launched a scathing attack on his bigger rival’s attempt to secure government aid as he unveiled a first-half net loss of $ 83.7 million in a “tough trading environment” that combined too much capacity with an economic slowdown.
Mr Borghetti said the issue facing the nation was much bigger than a debt guarantee.
“Do we want to go back to the days of the 1980s, when there was a regulated market and government-supported airlines were cumbersome, expensive, bureaucratic and airfares were high?” he said at the airline’s annual results.
“Or do we want to continue what was started in the 1990s, following the path of other countries such as the US, Europe and Japan, in deregulating the market and encouraging competition, choice and innovation for the benefit of customers?
“Over the past two decades we have all seen Australia develop from a highly regulated aviation market into a more open environment where airfares are lower, consumers have more choice and quality is higher.
“In this environment, those airlines that do the best by their customers and manage their businesses effectively will prosper and those that do not will fail.”
Hopes of a debt guarantee plummeted yesterday after Tony Abbott suggested it would be unfair to give support to one business and not to others.
Mr Borghetti, who praised the Prime Minister as “being particularly thoughtful in this process”, said the decision was an important crossroad in the aviation industry’s history. “Aviation is the biggest enabler of globalisation and we cannot take a decision on its future lightly,” he said.