If it wasn’t for some nastiness in Virgin Blue concerning the undesirability of pregnant employees, its new CEO John Borghetti would be having a pretty good day.
Virgin Blue’s net profits after tax in the December 31 half year were clobbered by its second-rate computer reservation system crash last year, down to $24 million net after tax compared to $62.5 million in the corresponding previous half, but on the underlying profit before-tax basis airlines are fond of using these days, the overall performance was sound.
Where the former executive general manager at Qantas was scoring points was in the partial revelation of new product initiatives that will cause a lot of problems back at his old stomping ground, apart from for those he has recruited from Qantas to join him at Virgin Blue, which he is about to rebrand as Virgin “something else”.
He is showing a presentation to analysts this afternoon, which includes a domestic business class in a new fleet of Virgin Blue A330s that Qantas can only answer by ripping out everything it currently has in its wide-body fleet, apart from the A380s, and getting serious about quality.
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There will also be an all-new business class for the large existing fleet of Virgin Blue 737s announced by this December. Make that the Qantas 737 fleet, which is also going to have to be redone to remain attractive.
Is Borghetti being “too ambitious”? The market will decide. Some of the features he is talking about sound very much like what Ansett did in its final moments of glorious excess, with expensive cabin fittings and domestic loyalty lounges, that rendered short inter-city flights into an experience akin to being transported on a royal barge.
The flipside of this golden coin is whether or not his counterpart in Qantas, its CEO Alan Joyce, is overestimating the tolerance of business travellers for the Jetstar experience and the frustrations of the Qantas full-service experience in domestic and international travel.
In the presentation Borghetti will give later today, the opportunities described for the alliance (of sorts) that begins with Etihad tomorrow — when Virgin Blue’s V Australia long carrier inaugurates flights to Abu Dhabi — sit uncomfortably over the current news images of the Arab world in flames, including nearby Bahrain, and rising concerns about Saudi Arabia and even the UAE.
Which in terms of the big picture, the Middle East, and the local picture, the anti-paternal leave behavior of some of its executives, leaves Borghetti standing in a spotlight bracketed by some dark shadows.