Virgin made money early on, but then Qantas expanded JQ and started squeezing Virgin hard from below, while dominating the corporate market from above. JB moved upmarket to get out of that pincer (because it would have been harder to cut costs enough to compete head on with JQ, while QF free to keep reaping in corporate accounts). QF dumped capacity on them while matching VA on enough product and service metrics to keep and win back accounts.
Nothing new about this scenario. Braniff airlines based in Dallas had the same thing happen to them with american Airlines squeezing them from the top and an upstart airline called Southwest squeezing them from the bottom. In the end they couldn't compete against both. If you can ever get hold of a book "splash of Color" it is well worth the read. What is truly amazing about the whole Virgin debacle is that they didn't learn from this as they were the upstart airline undermining Ansett who at the same time were trying to compete with Qantas. What did the VA management do? They put themselves into the middle ground! They then proceeded to take another page out of the failed airlines playbook and operate with too many different types of aircraft Now they are just going to be another case study for future Aviation Management graduates.