John Borghetti - interview at UNSW Business School

[Steve Dyer]

Quiet an interesting interview

Meet the CEO - John Borghetti, CEO and Managing Director, Virgin Australia - YouTube

 

[eastwest101]

Yes - I can't do it but I wish I could stick up the two responses to John Duries Top 100 CEO Q&A (paywalled by the The Australian)

Cookies must be enabled. | The Australian

I read the hard copy a few days ago and it was really interesting to see how both Alan Joyce and John Borghetti answered the exact same questions that were:

1. Has the corporate outlook improved, and if so what investment plans do you have for next year and why?
2. What do you see as the biggest opportunities/challenges facing your company?
3. What opportunities do you see for your company and the country in Asia and how do you plan to exploit them? 4. What is the biggest technology threat or opportunity for your company?
5. What are the key national issues and how should they be solved?

Now I am paraphrasing here, but in answer to question 4 John Borghetti admitted that his biggest technology challenge/threat in 2014 would be getting Sabre/the VA web site to play nicely with its customers and staff....:shock: - something I think we are aware of already...


By comparison Alan Joyce's answer to the questions can be summarized as:

1. complain about fuel prices/costs (what else is new)
2. talks about partners and lack of level playing field (no plan B to VA restructure and hamstrung by QF Sales Act)
3. spruiks JQ Asia franchises JQ Singapore/Vietnam, JQ HongKong, JQ Japan ets etc (very predicatble)
4. talks about B787 (wonder which part of the business got them?)
5. talks about stability/policy & emission trading/carbon tax issue, policy certainty and some good points about infrastructure (2nd SYD airport but interestingly does not return to the problem of costs/industrial relations)

 

[Supersonic Swinger]

Thanks for posting, interesting interview with some good insights from a CEO who seems to have a different focus to another airline CEO.

 

[CeeJayOz]

Here you go:
Virgin Australia CEO John Borghetti says having an IT system that supports seamless booking and travel is essential to the airline. Source: News Limited
"WE will continue to invest where it improves our efficiency as a business and enhances the customer experience."

1. Has the corporate outlook improved, and if so what investment plans do you have for next year and why?
We did see some improvement following the election, however, conditions remain challenging. Now that the election is out of the way, there is more certainty which is necessary for business to be able to invest for the medium to long term.

We have just completed a major transformation program, however, we will continue to invest where it improves our efficiency as a business and enhances the customer experience.

2. What opportunities do you see for your company and the country in Asia and how do you plan to exploit them?
Asia presents a huge opportunity for the travel and tourism industry in Australia - it is the fastest-growing region in the world in terms of both economic development and population, with China recently taking over Britain and the US as Australia's second largest source of international visitors.

Our alliance partnership with Singapore Airlines gives us access to the most comprehensive network across the Asia Pacific - in China alone, they fly into 10 major airports. We are working closely with Singapore Airlines to promote Australia across Asia and create a seamless travel experience flying from Asia throughout Australia and we have invested in IT systems that improve our visibility and accessibility across the region.

3. What do you see as the biggest opportunities/challenges facing your company?
The economic environment - it presents a challenge as the economic health of the country is directly linked to travel spend, however, it is also an enormous opportunity for Virgin Australia as many companies are looking for more value in their travel arrangements, so there is significant potential upside for us.

Building an even stronger customer-led business - as we grow as a business, ensuring that we maintain the strong focus on the customer that differentiates us from others in the market. Technology and continuing to develop our people will be key to us achieving this.

4. What is the biggest technology threat or opportunity for your company?
The distribution capability of our business - having the right IT system that supports seamless booking and travel with our airline is essential and we have recently implemented a new system that significantly improves access to our flights across the world. Working to extract advantages from this system is a major priority and will help us to promote Australia as a destination in overseas markets.

5. What are the key national issues and how should they be solved?
Infrastructure - we are lagging behind other parts of the world such as the Middle East and Asia where they are developing massive infrastructure projects to support population and economic growth. Key stakeholders such as government, business and community groups should work together to fast-track infrastructure projects in Australia so that we can maximise our country's productivity and our attractiveness as a destination for business and leisure travellers.

 

[CeeJayOz]

Qantas CEO Alan Joyce says infrastructure, such as a second Sydney airport. is a key national issue, with timely decisions vital. Source: AFP
"I EXPECT 2014 to be another challenging year marked by economic volatility, record fuel prices and a fierce competitive environment."

1. Has the corporate outlook improved, and if so what investment plans do you have for next year and why?
Not significantly. I expect 2014 to be another challenging year marked by economic volatility, record fuel prices and a fierce competitive environment. Our investment continues to be focused on improving the customer experience but we also remain vigilant in managing costs.

2. What do you see as the biggest opportunities/challenges facing your company?
There are two big opportunities. First, the potential for aviation partnerships to shape the new traffic flows emerging from global economic change. Second, the potential for new technology to unlock better service for airlines employees and customers. The biggest challenge is the lack of a level playing field for investment in Australia's aviation market - a gap that is allowing government-owned foreign airlines to unfairly reshape the market in their favour.

3. What opportunities do you see for your company and the country in Asia and how do you plan to exploit them?
We don't see Asia as a single region but rather a group of quite different markets. That's been the driver between us seeking out the best partners we can in each part of Asia, either for codeshare purposes or for joint ventures in the case of the Jetstar airlines in Singapore, Vietnam, Japan and Hong Kong. What the Jetstar brand has achieved in Asia in 10 years is just remarkable. We still have some hard yards to go, but in terms of strategic partners and brand presence, we're very comfortable with how we're placed in Asia.

4. What is the biggest technology threat or opportunity for your company?
I see technology as a huge opportunity. The new Boeing 787 is a perfect example of how the aviation industry thrives on it. Quite apart from how customers feel about these new aircraft, they use 20 per cent less fuel than similar-sized alternatives, which is an amazing opportunity.

Of course, keeping up to date with technology also requires a lot of capital, so there's a balancing act involved.

5. What are the key national issues and how should they be solved?
The need for stable economic leadership and policy certainty. Emissions trading is one example. Timely decisions on key infrastructure like a second Sydney airport is another. As an economy in transition, this is what will help to drive economic growth and unlock productivity.

 

[Steve Dyer]

Very different answers coming from two CEO's with very different airlines, one looking at growth, the other looking to point fingers as to why they can't grow.

Reading JB's comments, there has been much specula;at ion about VA using some of the A330-200's to fly to Singapore. Question, Does the A330-200 have the capacity to reach China? He specifically mentions it..... He talks about Brand recognition ext through his interview...

 

[notzac]

Question, Does the A330-200 have the capacity to reach China?

Certainly does ... CX fly a stack of them to Australia, as do CZ and MU.

 

[mannej]

Certainly does ... CX fly a stack of them to Australia, as do CZ and MU.

Don't CX fly the 333, so with that in mind, the 332 has more legs...

 

[notzac]

Don't CX fly the 333, so with that in mind, the 332 has more legs...

True story - the 332 can fly a bit further than the 333 - didn't QF fly one non-stop TLS-MEL?

 

[Fruitcake]

True story - the 332 can fly a bit further than the 333 - didn't QF fly one non-stop TLS-MEL?

Yes, QF conducted a direct TLS-MEL delivery flight about ten years ago. JQ flew a little longer - TLS-SYD - on one of their later delivery flights.

VA conducted a TLS-MEL delivery flight last year, although they took a "scenic route" across SA and VIC in order to lengthen their ground track to record a longer flight than JQ, which I think they achieved.

 

[markis10]

Yes, QF conducted a direct TLS-MEL delivery flight about ten years ago. JQ flew a little longer - TLS-SYD - on one of their later delivery flights.

VA conducted a TLS-MEL delivery flight last year, although they took a "scenic route" across SA and VIC in order to lengthen their ground track to record a longer flight than JQ, which I think they achieved.

All the VA delivery flights have been direct, not that it stands for anything, range sans passengers and cargo is always significantly greater.

 

[Fruitcake]

All the VA delivery flights have been direct, not that it stands for anything, range sans passengers and cargo is always significantly greater.

Good point re 'direct', I should have said that VH-XFE's delivery was non-stop (as well as direct) TLS-MEL. Whereas VH-XFC was delivered direct TLS-KUL-MEL and XFD was delivered direct TLS-KUL-SYD.

XFG and XFH were delivered non-stop TLS-MEL.

And I agree these trips are completely meaningless in practice but it can make for interesting PR if the airline is desperate for attention. But other than enthusiasts' forums I don't think anyone really talked about the ground distance record that VA set with XFE's flight (perhaps the record wasn't "official"?).

 

[eastwest101]

Its interesting that the Alan Joyce responses to the Duries Top 100 CEO Q&A questions just pre-dated the PR noise around the Qantas Sales Act and Moody's downgrade, but when Joyce answered those questions he would have well and truly known about VA's restructure and the capital raising/investment by NZ/EY and SQ.