Virgin Blue to absorb V Australia

In the first step of a wide-ranging reorganisation, V Australia will be brought back under its parent's direct control after operating as a separate company since it began services to the US last year.

The long-haul offshoot poses the biggest challenge to Mr Borghetti in his first year because of the stiff competition it faces from Qantas, United, and Delta Air Lines on the Australia-US route. Its cabin and operational crews have been working separately from Virgin's.

Mr Borghetti also unveiled to staff in Brisbane yesterday his new management team, and a structure whereby the number of executives who report directly to him increases from six to eight.

Virgin's chief operating officer, Andrew David, has announced that he will leave the airline by the end of the year. A former Air New Zealand executive, Mr David lost out to Mr Borghetti for the top job.

The changes also leave V Australia's general manager, Scott Swift, without a defined role, although he will report to Mr David as the long-haul carrier is brought closer to its parent.

As flagged earlier this week, Virgin has poached two Qantas executives, Will Owens and Jane McKeon. Ms McKeon will become head of government relations, while Mr Owens oversees yield management.

However, the big winner from the shuffle is Liz Savage, a former Easyjet executive who will take on the combined roles of network and revenue management. Her team is in charge of a review of Virgin's international and domestic networks.

Keith Neate remains chief financial officer and Richard Tanner as human resources chief.

Virgin shares closed 1? down to 29.5?.