Dr BURNS - 2001-10-18
What benefits will Virgin Blue’s arrival bring to the Territory?
ANSWER
I thank the member for Johnston for his question. Madam Speaker, at a time very early in the life of this government - in fact on the fifth day following our swearing-in on the Monday - the Chief Minister met with Sir Richard Branson and signed off on this deal to bring Virgin Blue into the Territory. It was something that had been underway, under discussion and under negotiation with the previous government for at least months - perhaps as long as six months - and we simply could not understand how the CLP were not able to come to an arrangement with such a professional, new, fresh-approached company such as Virgin Blue represent.
This deal was struck, as I said, on the fifth day of us coming into government. We had, at that time, Ansett and Qantas flying in and around the Territory on a daily basis, and we thought that it was just too good an opportunity to get a deal with Virgin Blue because of the low-cut, no-frills nature of the airline, the low overheads that they run, that they would be able to come into the Territory with very, very competitively-priced packages. We had to appreciate, at the same time, that they are a small airline - seven aircraft.
There is enormous pressure on them now to grow and get big as quickly as possible, to help fill the void left by the loss of Ansett. We also understand that they have serious reservations about that themselves. All of us would appreciate, those companies that get big really quickly, tend not to be around for too long. So, they have a mind to their own infrastructure, their own management, their own operating style, and they certainly do not want to head down the way of having those massive overheads that we saw bring Ansett back to earth, and which Qantas, of course, is enormously mindful of. Qantas are heading for a critical meeting with all of their unions on 22 October to address work practices and other matters, given the trade-offs that the workforce is offering Ansett too, to remain competitive.
We do welcome Virgin Blue into the market when they come. The $499 return airfare between Darwin and Brisbane is exactly what we want. We think that will be attractive to the marketplace. We capped a deal at $2m with Virgin Blue to purchase 50 seats per flight and for them to be sold down by the Tourist Commission. We appreciate that may have come at some cost to government when this deal was struck, given that we had Ansett and Qantas and the whole rationale behind this was to keep those major players to the mark in offering absolutely competitive fares to Northern Territorians and, indeed, to visitors to the Territory. We are very confident now, of course, that that won’t cut through the bottom line on a budget effect at all, because we are confident that those seats will be sold down on each flight.
It was interesting dealing with Virgin Blue because it was clear that they were keen to talk. They were keen to do business and, as I said, within five days of being sworn in as ministers, the Chief Minister herself sat in the room with Sir Richard Branson and signed that deal off. To this day, we simply remain puzzled as to why the previous CLP government would not talk turkey with them. They will bring benefits to the Territory, we welcome them, we hope that they will be - and they will be - a permanent player in aviation in the Northern Territory. We expect them to be around for a long time, bringing low fares and benefits to Territorians and business alike.
ANSWER
I thank the member for Johnston for his question. Madam Speaker, at a time very early in the life of this government - in fact on the fifth day following our swearing-in on the Monday - the Chief Minister met with Sir Richard Branson and signed off on this deal to bring Virgin Blue into the Territory. It was something that had been underway, under discussion and under negotiation with the previous government for at least months - perhaps as long as six months - and we simply could not understand how the CLP were not able to come to an arrangement with such a professional, new, fresh-approached company such as Virgin Blue represent.
This deal was struck, as I said, on the fifth day of us coming into government. We had, at that time, Ansett and Qantas flying in and around the Territory on a daily basis, and we thought that it was just too good an opportunity to get a deal with Virgin Blue because of the low-cut, no-frills nature of the airline, the low overheads that they run, that they would be able to come into the Territory with very, very competitively-priced packages. We had to appreciate, at the same time, that they are a small airline - seven aircraft.
There is enormous pressure on them now to grow and get big as quickly as possible, to help fill the void left by the loss of Ansett. We also understand that they have serious reservations about that themselves. All of us would appreciate, those companies that get big really quickly, tend not to be around for too long. So, they have a mind to their own infrastructure, their own management, their own operating style, and they certainly do not want to head down the way of having those massive overheads that we saw bring Ansett back to earth, and which Qantas, of course, is enormously mindful of. Qantas are heading for a critical meeting with all of their unions on 22 October to address work practices and other matters, given the trade-offs that the workforce is offering Ansett too, to remain competitive.
We do welcome Virgin Blue into the market when they come. The $499 return airfare between Darwin and Brisbane is exactly what we want. We think that will be attractive to the marketplace. We capped a deal at $2m with Virgin Blue to purchase 50 seats per flight and for them to be sold down by the Tourist Commission. We appreciate that may have come at some cost to government when this deal was struck, given that we had Ansett and Qantas and the whole rationale behind this was to keep those major players to the mark in offering absolutely competitive fares to Northern Territorians and, indeed, to visitors to the Territory. We are very confident now, of course, that that won’t cut through the bottom line on a budget effect at all, because we are confident that those seats will be sold down on each flight.
It was interesting dealing with Virgin Blue because it was clear that they were keen to talk. They were keen to do business and, as I said, within five days of being sworn in as ministers, the Chief Minister herself sat in the room with Sir Richard Branson and signed that deal off. To this day, we simply remain puzzled as to why the previous CLP government would not talk turkey with them. They will bring benefits to the Territory, we welcome them, we hope that they will be - and they will be - a permanent player in aviation in the Northern Territory. We expect them to be around for a long time, bringing low fares and benefits to Territorians and business alike.
Last updated: 09 Aug 2016