Virgin Group founder Sir Richard Branson will wheel himself out in Sydney on Wednesday to add glitz to the decision by the southern hemisphere outpost of his empire to “rebrand” itself. The airline business’s human headline will add valuable minutes to the international TV news media coverage of the launch of Virgin Australia, which is expected to be the new name of the Virgin Blue group.
Virgin Blue was the irony-rich Aussie name for the carrier when it started operations from its Brisbane base in 2000 with backing from Sir Richard of just $10 million, which he has turned into an investment worth billions. After buying and selling parts of his Virgin Blue shareholding over the years, he retains about 26 per cent.
Wednesday will be another slick marketing of the Virgin brand’s trademark “coolness”, with lots of glamorous models and trademark flashes of red with Sir Richard’s broad smile in the foreground.
The nerdy part of the exercise is to help unify the various Virgin franchises in the public mind, with Virgin Australia and Virgin America giving regional focus to the operation started 27 years ago by the original Virgin Atlantic Airways.
The messy bit is that, when Sir Richard sold half of Virgin Atlantic to Singapore Airlines in 2000, SIA extracted an undertaking that he would not use the Virgin brand on any new venture flying international routes. That’s why the new Virgin Blue subsidiary airline connecting Australia and the US is called V Australia and the 737s connecting Australia with Bali, Phuket, Thailand, New Zealand, Papua New Guinea and the Pacific islands are flown under the name Pacific Blue.
Ultimately, however, the group’s Boeings, Airbuses and Embraers, while trading on the Virgin brand’s “cool”, differentiate themselves from the competition in only a few respects:
A young fleet: Virgin Blue founder and former chief executive, Brett Godfrey, declared that he didn’t want to own a plane more than eight years old – the age at which maintenance commitments start to grow.
Customer service: The VB group trains its flight attendants in the Southwest Airlines style of low-cost service, with lots of humour, but with a strong emphasis on youth.
A loyalty scheme: Virgin Blue’s Velocity program has a reputation as one of the easiest for redeeming points.
Added frills: Within five years of its foundation as a low-cost carrier, VB had started adding frills, such as live in-flight TV and valet parking. Now the airline is on the verge of flying its first separate business class section on two new Airbus A330 widebodies which will begin up to three Sydney-Perth flights a day in the next few months. The airline is adding even more frills, but still has to announce details of its 737 business class rollout.
The media dripfeed that has been used to announce the airline’s transition from budget carrier to an all-things-to-all-people airline has been slow, deliberate and stage-managed to within an inch of its life.
What the small industry of Australian airline analysts are now debating is whether the costs the airline has added to attract more business flyers (double the 10 per cent of seats currently filled by corporates) are justified.
Will a name change make any difference to the way you view Virgin Blue? If you’re a regular flyer, have you taken notice of Virgin’s new domestic product upgrades, such as kerbside lounge access and trans-Nullabor business class? Is Virgin winning the battle to entice you to change sides? Is Qantas’s advantage too strong, with offerings like its large frequent flyer program? Are other factors, like Qantas’s leadership in punctuality, decisive for you?