Virgin Australia's Rio Tinto Win Helps Business Travel Push
October 06 2011 - 12:21AM
Dow Jones News
Virgin Australia Ltd. (VBA.AU) said Thursday it has won part of
mining giant Rio Tinto Ltd.'s (RIO.AU) global contract for air
services, a sign the airline is gaining traction in its push to
secure a larger slice of Australia's lucrative business travel
market.
At the same time, larger rival Qantas Airways Ltd. (QAN.AU) said
it has also won some more business from Rio Tinto by signing a new
three-year agreement with the miner. Qantas said the new agreement
will see it continue to be Rio Tinto's "major air services
provider" for both its Australian and international operations.
Spokeswomen for Virgin Australia and Rio Tinto declined to
comment on the proportion of the contract each company has won. A
Qantas spokeswoman declined to comment immediately.
In separate prepared statements, Rio Tinto said Qantas's recent
purchase of resource charter airline Network Aviation will support
a range of the miner's projects in Western Australia state. But it
also said the agreement with Virgin Australia will provide greater
flexibility to travelers, particularly in the highly-contested
Western Australian market.
Virgin Australia said the contract is "our most important
business win yet".
Both airlines are competing for customers in what's known as the
"fly-in, fly-out" market for miners temporarily staying on
site.
Virgin Australia Chief Executive John Borghetti, a former senior
Qantas executive, is overhauling the airline by putting business
class seats in its aircraft for the first time and forging
alliances with international carriers to expand its global reach.
He wants to boost its share of Australia's business travel market
to 20% from just over 10% currently.
The airline won 39 new corporate accounts last financial year
including Google Inc. and said in August it has gained more
accounts since June 30 including construction giant Leighton
Holdings Ltd.
-By Ross Kelly, Dow Jones Newswires; 61-2-8272-4692;
Ross.Kelly@dowjones.com
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