Virgin Australia To Match Market Pricing If Qantas Cuts

Virgin Australia Ltd. (VBA.AU) said Tuesday it will continue to compete aggressively on ticket prices with Qantas Airways Ltd. (QAN.AU) even if its rival offers lower fares to win back customers lost through its damaging industrial dispute.

Qantas said this week that it's considering "customer engagement opportunities" after the shock grounding of its fleet on the weekend left many passengers stranded, and furious with Australia's flag carrier.

"The thing with aviation is that it's very competitive. And in particular with Virgin Australia we are a very competitive company, so we will always meet market pricing," Chief Executive John Borghetti told reporters after addressing an Australia Israel Chamber of Commerce lunch.

Although he said the number of people passing through Virgin Australia's lounges went "through the roof" on the weekend and that the airline had carried about 30,000 disrupted passengers, Borghetti was reluctant to put a measure on how much market share it has taken from Qantas.

"Let's not forget it's only been two days. It's kind of a bit early to tell," Borghetti told the business lunch.

"The market share is what it is because you've got capacity there and you can only fill it to the top of that capacity. And we've got about 30% of the capacity in this country plus or minus half a point or whatever it is and that's your market share," he said.

Borghetti told reporters the airline is still aiming to grow capacity in the six months to Dec. 31 by 4%-6% compared to the same period last year and that it's currently at about 5% growth.

-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692; [e-mail]