Picture: The West Australian/Mogens Johansen

Virgin Australia chief executive John Borghetti was warned Australia may slip back to the highly regulated and uncompetitive airlines of the 1980s if the Government guarantees Qantas' high-cost structure.

As he announced Virgin's underlying $49.7 million first-half loss, Mr Borghetti said the airline "brought real competition and much lower fares" to Australia.

"Over the past two decades we have all seen Australia develop from a highly regulated aviation market into a more open environment where airfares are lower, consumers have more choice and quality is higher," he said.

"In this environment, airlines that do the best by their customers and manage their businesses effectively will prosper."

Mr Borghetti said aviation was the biggest enabler of globalisation and decisions on its future could not be taken lightly.

In the past three years, Virgin Australia's workforce increased from 6400 to more than 9500, its fleet expanded from 87 planes to 135 and it injected more than $11 billion into the economy, he said.

He was happy with the company's underlying performance, saying once "excess market capacity" rights itself the airline would be in a strong position.

Virgin had a statutory loss after tax of $83.7 million, which includes buying Tiger Airways.

The West Australian

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