Borghetti joins the Blue

In what is likely to be a gamechanger, Virgin Blue has named former Qantas luminary John Borghetti as its new CEO.

This has the potential to dramatically alter the competitive landscape in the local airline industry - particularly in the domestic market.

Borghetti brings to the Blue an intimate, if perhaps slightly outdated , knowledge of Qantas' strengths and weaknesses. And he has the vision to take the airline into the new direction it needs to break the constraints that currently hinder it.

Retiring chief Godfrey reported only last week that the airline is in better shape than it might have been, given the external and self-imposed challenges it has faced over the last 12 months.

So Borghetti will inherit (in May) a business that has a solid foundation and opportunities aplenty. But he is likely to take it in a very different direction in many aspects, so long as he has the board running with, and not against, him.

The fact that it took so long for Borghetti and the airline board to reach agreement on this (the airline was hoping to name Godfrey's successor in January) suggests that there was a lot to negotiate; and JB's acceptance of the role in turn suggests that consensus has been reached on most if not all of the points of difference.

Significant shareholder Richard Branson has recorded his ardent support for the new appointment.

And John Borghetti said today that the Blue's culture was one of the main things that drew him to the company.

This is a big-time win for the Blue, but if it is to get maximum benefit from the appointment it will need to give Borghetti some free rein to pursue his vision.