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V Australia to be folded into Virgin Blue

Virgin Blue Chief Executive John Borghetti has signaled his intention to bring V Australia under Virgin Blue’s management and operations structure in a memo to staff yesterday.

VirginBlueV Australia has struggled to gain a foothold in the international long-haul market since its launch in February last year. While operating primarily on the Australia to United States routes since Australia signed an ‘open skies agreement’ with the United States, V Australia has failed to gain significant market share or expand its business to other lucrative long-haul destinations like Japan or China. After posting significant losses, V Australia earlier this year entered into an agreement to code share with Air New Zealand in an effort to stem the flow of cash bleeding from the airline.

Virgin Blue Holding Group, in a complete overhaul of its management structure will fold V Australia into Virgin Blue, and appoint one head of both network and revenue management within the executive team according to a memo from Virgin Blue Chief Executive John Borghetti.

Virgin Blue will also be appointing a new group executive for government relations, in an attempt to extract maximum value from being awarded a contract to The Virgin Blue Airlines Group as one of four airlines appointed to supply domestic air travel to the Federal Government agencies and V Australia and Pacific Blue among 13 airlines appointed to supply international air travel services in May this year.

The new contractual arrangements take effect from 1 July 2010. Virgin Blue said the appointment as an approved air travel provider supports the company’s continuing aim to secure a greater share of Australia’s $500 million annual Federal Government travel spend.