Virgin Blue is on track to deliver capacity growth this financial year but warns the outlook remains volatile.
Chief executive John Borghetti said he expected capacity in the airline's core domestic market to grow by about 6-8 per cent in 2011. He told shareholders at the company's annual general meeting in Brisbane on Nov. 24 that V Australia "remains on track for break-even or close to break-even by the end of financial year 2011."
But chairman Neil Chatfield was more cautious, saying the "market remains volatile and continuing competitive pressures, along with stress on consumer spending, is constraining our ability to significantly improve yields in the short term.
"If the positive trends do not strengthen, we have the flexibility to adjust our capacity and defer aircraft purchases and other expenditure to meet market conditions."
Mr Borghetti said Virgin Blue was "over-reliant" on the leisure and SME (small and medium enterprises) end of the market and needed to diversify into corporate and government business.
"Today we have approximately 10 per cent of the corporate and government business so we are well poised to do what Virgin does best -- challenge incumbents and challenge near-monopolies."
He has targeted to double its 10 per cent share of the high-yield corporate market to between 15 and 20 per cent over the next two years.
"Our strategy is simple and logical -- we need to hedge our revenue base. We have to continue to attract the leisure and SME market and use our cost advantage in pursuing the corporate sector."
Chief executive John Borghetti said he expected capacity in the airline's core domestic market to grow by about 6-8 per cent in 2011. He told shareholders at the company's annual general meeting in Brisbane on Nov. 24 that V Australia "remains on track for break-even or close to break-even by the end of financial year 2011."
But chairman Neil Chatfield was more cautious, saying the "market remains volatile and continuing competitive pressures, along with stress on consumer spending, is constraining our ability to significantly improve yields in the short term.
"If the positive trends do not strengthen, we have the flexibility to adjust our capacity and defer aircraft purchases and other expenditure to meet market conditions."
Mr Borghetti said Virgin Blue was "over-reliant" on the leisure and SME (small and medium enterprises) end of the market and needed to diversify into corporate and government business.
"Today we have approximately 10 per cent of the corporate and government business so we are well poised to do what Virgin does best -- challenge incumbents and challenge near-monopolies."
He has targeted to double its 10 per cent share of the high-yield corporate market to between 15 and 20 per cent over the next two years.
"Our strategy is simple and logical -- we need to hedge our revenue base. We have to continue to attract the leisure and SME market and use our cost advantage in pursuing the corporate sector."
