Price war: Virgin boss means business

BUSINESS class fares in Australia have dropped by 25 per cent in an airline price war and might drop further, Virgin Australia's chief executive John Borghetti says.

Already competing for domestic economy class capacity, Mr Borghetti has declared plans to target Qantas' business class travellers and capture at least 20 per cent of the corporate travel market.

He said prices had remained very high in business class, increasing at the top end as economy fares dropped by more than half in the past decade. But he would not be drawn on whether the reduced business fares had stopped that part of the company being profitable.

''There was no competition at the top end since Ansett stopped flying,'' Mr Borghetti told ABC TV's Inside Business, adding that it was right there was a price war.

''So we deliberately entered that market and we know that the fares were very high and we could bring competition at lower fares with better service and that's exactly what we have done.''