v australia launch this wk - interesting read, page-11

It's almost priced for failure at the moment. There is a bit of panic out there. Most likely the market figures that if a price war broke out on the pacific route, Qantas will kill Virgin. With the recap, Qantas a bit more on its war chest as well. And Qantas has a history of doing that with Compass I and II.

However, my view is that Virgin is here to stay. Operating cash is neutral with a steady $600m cash in bank. The lower end domestic market is holding up and businesses are looking for the cheapest airfares. Virgin's fleet is also much younger than Qantas. And really, is Richard Branson going to allow VBA to go under? Not only that, SIA has an interest as well through its 49% holding in Virgin Atlantic. I think potential suitors are still staying on the sidelines because they know that there will be a significant control premium for VBA. Afterall, it's effectively a duopoly in the Australian market.