Qantas- S African code share criticised

Virgin Group founder Sir Richard Branson says a lack of competition in the African skies should have barred Qantas Airways and South African Airways from code-sharing on routes.

The billionaire industrialist and minority owner of Virgin Blue Holdings said the code-sharing agreement was odd given the previously monopolistic characteristics of the South African air transportation market.

"It doesn't really make sense on a route where there's no competition that the two principal competitors are allowed to collude and work as one airline," he told Sky Business Channel in an interview on Sunday.

Now that Virgin Blue had entered the market, it may make more sense, he said.

"But that's for governments to decide."

Virgin Blue's international offshoot, V Australia, commenced direct flights from Melbourne to Johannesburg on March 13, causing fares on the route to nosedive by over 30 per cent.

Asked if discounting on its other routes would cease, Sir Richard said discounts over the last two years meant "the consumer has never had it so good."

"Virgin Blue has done relatively well ... so you can do well in difficult times if you keep your costs under control and fill your planes," he said.

Earlier this month Virgin Blue's outgoing chief executive Brett Godfrey flagged domestic airfares in Australia would rise in 2010.

"The long-term standoff fares in Australia, I think we all agree, will likely rise as the economy improves, going forward," he said on March 2 after chairman Neil Chatfield announced former Qantas executive John Borghetti as Mr Godfrey's successor.

Mr Borghetti, 54, notched up 36 years' experience in a wide range of senior roles at Qantas prior to leaving the company in May 2008 after losing out to Alan Joyce for the Qantas chief executive post.

Sir Richard, who last year celebrated the 25th anniversary of his creation of global long-haul carrier, Virgin Atlantic, said Mr Borghetti's industry experience made him highly sought after.

"Everybody that I talked to said if you could persuade him to come and run our airline, we would have a very good catch."

Sir Richard owns 26 per cent of Virgin Blue.

Virgin Atlantic is owned by the Virgin Group and Singapore Airlines, and an agreement between the two prohibits the use of the Virgin name outside Australia, forcing Virgin Blue to adopt the name Pacific Blue for its short-haul international carrier.

Virgin Atlantic is now the official flag carrier of the UK, and Sir Richard said he would like the same master brand to apply to all airlines in the group.