Plan was to run Virgin out of cash, create a monopoly, make big profits.
Utter rubbish!
It was/is a simple game of who blinks first. QF want (need) the 65% line, they thought they could sustain capacity growth to hold the line until DJ blinked and backed off. Joyce admitted as such that he would be very very happy to keep it that way with zero domestic growth. The problem is that DJ now has more capital backing to crack the 65% line and QF can no longer afford to hold it; as less than 65% causes a lot of problems to QF.
Joyce cannot accept less than 65% because Jetstar makes up a significant part of that 65%. Jetstar has gotten so big that the 65% is necessary to keep frequency of QF against DJ for the business (super profit) market. Joyce is trapped, he wants to grow Jetstar, but he cannot because that would mean giving up more QF market share as DJ adds capacity. He cannot shrink Jetstar as the cost base for domestic then goes up as it has been neglected for too long. It's a lose lose situation for Joyce.
I actually think the whole Dixon v Joyce spat comes down to this. Dixon knew that growing Jetstar too much domestically was a mistake. It is the domestic market that matters, as the international market contains too many unknowns for even Dixon. The idea that the Dixon/Joyce spat was over the Emirates deal is just a smokescreen. It is all about the domestic market and Dixon could see where it was headed. Dixon knows Borghetti very very well and could see how he would lead Joyce into the trap with Joyce believing Jetstar would solve everything.
Virgins interest in Tiger just reinforces the paranoia at QF. There is no way Tiger will ever be but a small player in the Virgin arsenal. Borghetti is way too smart to let Tiger grow the way jetstar did.