Virgin Blue - Who's Telling the Truth?
From today's press:
Airline Chief contradicts Branson on fuel hedging
by Geoff Easdown
Virgin Blue chief Brett Godfrey has turned the tables on former boss Sir Richard Branson by giving a markedly different account of why the carrier was $150 million out of pocket because of soaring fuel prices.
A report in Aircraft and Aerospace Asia Pacific magazine published yesterday quoted Mr Godfrey as saying the decision not to take hedging insurance against changes in oil prices was made by Virgin Blue's major shareholders.
Sir Richard had previously insisted it was Patrick Corp and its chief executive Chris Corrigan who held out as the airline's controlling shareholder from a decision to take hedging cover.
Mr Godfrey said: "We have four shareholders who control 92% and three of them are on the board".
"The four major shareholders were well prepared to take the risk".
Patrick Corp, with a 62.4 per cent stake, has four seats on the board.
Mr Corrigan holds a casting vote as chairman.
Sir Richard, who has never attended a meeting of the Virgin Blue board since the carrier floated, has two seats with a 25.6% stake.
"Chris Corrigan is an astute businessman, but he is not used to running airlines" Sir Richard said in a phone call last week.
"One of the biggest disagreements we have had with Chris over the last six months was his absolute reluctance to hedge fuel.There has been a heated debate at the board about it.
It has cost the airline about $150 million" Sir Richard said.
But Mr Godfrey told Aircraft and Aerospace Asia Pacific that he, Mr Corrigan and Sir Richard bet that nothing would happen and had not paid a hedge premium. " We lost," he said.