Virgin Blue’s confirmed appointment of John Borghetti as the successor to its founding CEO Brett Godfrey this morning piles the pressure onto Qantas to radically change and improve its business.

Borghetti’s 36 years at Qantas don’t just come with clear insights in what makes an airline successful. In the early years after Virgin Blue began flying on August 31, 2000, Godfrey used to tell his close associates that the movers and shakers at Qantas, which always included Borghetti, knew more about the new carrier’s business than it did.

“Qantas scrutinised us in such detail we used to joke about trying to get them to tell us how we were doing,” Godfrey says.

Now with Godfrey keen to hand over the controls, and Borghetti keen to oblige, Virgin Blue is headed deep into the same new territory that Qantas has only recently acknowledged as crucial to its success.

And that is into the “middle”, the place where most of the frequent fliers actually fly, which is in economy class at fares at which a lower cost airline like Virgin Blue can make seriously good money, and a higher cost airline like Qantas continues to struggle as shown in their recent half yearly financial reports.

Jetstar has to fight Tiger to hang onto bargain hunters with no loyalty except to the lowest price. But Virgin Blue only has to deal with Qantas, a brand in decline domestically because of its own emphasis on growing Jetstar in order to undermine the inefficiencies it seems incapable of otherwise removing from its main line operations.

With Borghetti at the helm, it will be a single branded Virgin Blue group versus a dual branded Qantas/Jetstar group, and he knows better than anyone in Virgin Blue how and why the Qantas strategy is vulnerable in its current form.

In a fairly low key media conference call this morning, Borghetti acknowledged that financial and cultural strengths of Virgin Blue. He is the only senior Qantas executive since James Strong to have credibility as really caring about staff engagement.

Not that the way ahead will be smooth. Virgin Blue is as tenacious as Qantas about curbing labour costs, it just seems to have managed to enlist its staff more broadly on its side.

A very sharp divide is now evident as one of the brightest senior executives at Qantas takes over the running of its only successful competitor in Virgin Blue.

One brand versus two brands. One cabin with different amounts of space on offer, versus cabins divided with curtains and attitudes. Virgin Blue now flies to more places in jets in Australia than Qantas.

Borghetti is going to make life very tough for Alan Joyce, the man who beat him to the job of CEO on Geoff Dixon’s departure. Will Joyce have any option but to hack deeply and urgently into the costs and inefficiencies of Qantas main line, and if he does, will this back fire and convince even more customers to seek Virginity?

Life in the middle looks like getting “interesting”.