Following the collapse of Ansett and the Tesna rescue, a rumour went around that the Federal Gevernment was uncomfortable with Qantas having 80% market share domestically. Over the next 2-3 years Virgin Blue growth was way beyond anyone's expectations (including RB and BG). What amazed the QF domestic check-in staff was why Qantas was not putting on extra capacity because almost all flights were full and potential passengers had to fly with Virgin just to get a seat (paying top dollar, not the $29 discounted fare). This was accutely pointed out during the SARS crisis when Qantas had taken capacity off the international operation (mainly B767's normally flying to Asian destinations) but failed to make any significant increase in domestic flights. During this SARS period there were some one-off events involving many thousands of visitors from overseas that had to fly some domestic sectors but Qantas did not put on any additional flights - thus forcing passengers to fly with Virgin. Circumstantial evidence strongly indicated that the rumour was true and that John Anderson (or as the QF bashers call him - The Minister for Qantas) had dictated the maximum market share that Qantas would be allowed to have.
Virgin has acquired the government dictated market share and as Geoff Dixon stated when he delivered the 2004 Profit results - he has drawn a line in the sand and he would do everything possible to prevent any further erosion of market share. Using QF mainline to protect the higher yield market and Jet* to penetrate the low yield market has forced Virgin to fight harder for market share. With the future now not looking as rosy, Brett Godfrey has suddenly gone media shy and a large number of Virgin executives have moved to greener pastures. Virgin is in a solid financial position and will generate good profits in the forseeable future but they won't experience the amazing growth that we saw during their first few years of operation.
One thing that I find amazing now is the interest of Patricks (& now Toll) is in boosting the air freight revenue, which makes sticking with B737's in lieu of changing to A320's a few years ago a wrong decision. The B737 holds are probably the worst for carrying freight on regular passenger services. Richard Branson probably didn't care about air freight as he was only interested in using Virgin Blue as a "market leader" for his other Virgin branded products which is why he was happy to sell down and become a minority shareholder.