Originally Posted by
krismiler
Virgin started out as a low cost carrier and came close to going under, only being saved by the demise of Ansett. It then rapidly ramped up to fill the void, changed to a full service airline, and is now looking like Ansett did before the collapse. An unnecessary mix of aircraft types, bloated office structure, unprofitable routes and a series of "why on earth did they do that ? " decisions have all added up.
With the benefit of hindsight, they would probably have been better of had they stuck to the low cost formulae of one aircraft type and strict cost control. Qantas would have let them have 1/3 of the domestic market and everyone would have been happy. Customers would have been able to choose between a premium carrier or an Australian version of Southwest Air, with the appropriate price differential.
I'm not sure that's quite right. Qantas invested heavily in setting up Jetstar to 'pincer' Virgin Blue with an even lower cost product, leaving Qantas itself free to specialise as a full service carrier. JB's move to the current VA model was a response to the fact that
VB was caught in the middle, and not winning.
The alternative wouldn't have been to leave
VB as it was - it would have been to strip it back to a ULCC model, and JB's view at the time was that there wasn't space in Australia for two, full-size LCCs, and that they stood a better chance of taking corporate marketshare from Qantas.
That's not a defence of JB - I think he lost sight of the need for cost control - but I do think he was right that there wasn't space for multiple LCCs. SQ learnt that with Tiger (and then JB bought it...), and NZ seem to realise this - hence their complete disinterest in entering the domestic market (well, that and having been burnt by Ansett).