Virgin Australia has fired another salvo in an ongoing war of words with its main rival, demanding that any Federal Government support offered to Qantas also come its way.
Virgin chief executive John Borghetti has written an open letter to the Government calling for the same support, if the Commonwealth offers the national carrier a debt guarantee.
“There have been media reports that the Government offered comfort letters to Qantas’s credit rating agencies, prior to our capital raising,” he said.
“I would also note that if Virgin Australia had been afforded the benefit of such a letter, it would have enabled us to achieve superior outcomes from both the recent debt bond issue undertaken in the US market and the capital raising that is underway.”
Treasurer Joe Hockey has refused to rule out using taxpayers money to prop up Qantas.
Labor says it would consider supporting the Government buying a small stake in Qantas to send a clear signal to the markets that it is not just any other company.
Last week, Virgin announced announced a $350 million dollar capital raising, under written by its major shareholders Singapore Airlines, Air New Zealand and Etihad.
The move provoked Qantas to call on the Government to examine the “virtual takeover of Virgin by foreign airlines”.
Virgin responded to the comments by threatening legal action against Qantas.
Virgin has ‘no issue’ with changing Qantas Sale Act
Mr Hockey has reportedly also flagged the prospect of ditching foreign ownership rules that prevent overseas companies controlling more than 49 per cent of Qantas.
Mr Borghetti says Virgin has “no issue with the act being repealed”.
“Furthermore, we have no issue with any amendments to the legislation which would allow Qantas to mirror the current structure of Virgin Australia by separating its international and domestic operations,” he wrote.
He says the country needs two strong airlines and a level playing field.
“Virgin Australia has succeeded against the odds, in a very difficult marketplace with a major and dominant competitor three times its size that appears intent on flushing it out of the market,” he said.