Jetstar was started up because QF had to respond to Virgin undercutting them on price because of a lower cost base. Simple solution was to subsidise JQ to beat Virgin at their own game. Secondarily JQ could replace mainline QF operations where there was little demand for business class. QF has been ruthless in managing yield and put the screws on Virgin. Borghetti responded by trying to compete for the premium market and bingo, cost went through the roof and we are now where we are. That means that QF will keep JQ , keep its cost base as low as possible and make sure nobody is stupid enough to try and replace Virgin when it fails.