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Virginisation Of The World

Fri Nov 21, 2003 2:01 pm

Ok, now that I've got your attention, What do people think of Virgin's increasing success. I am particularly amazed at Virginblue's stellar run in Australia, where Richard Branson started with just a few million dollars (10-20?) and is now floating the airline for over 2 billion aussie dollars. Pretty amazing. (this was no doubt helped, though, by the collapse of Ansett from AirNZ's #### up).
Anyway-with Virgin Atlantic holding it's own against BA and the impending launch of hopefully of Virgin Pacific and Virgin America, will Virgin be the first truly global airline when their networks connect?
What do people think.

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RE: Virginisation Of The World

Fri Nov 21, 2003 2:07 pm

I don't think it would happen. Nothing against Virgin but I just cannot see it happening. Have you flown Virgin?

Must be daytime in Australia as I've seen a few new posts rescently by you.  Smile/happy/getting dizzy

Would would not happen to be from Canberra would you?
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RE: Virginisation Of The World

Fri Nov 21, 2003 2:10 pm

I suppose one thing i forgot to mention is that Virgin blue in oz and Virgin USA are Low cost carriers as opposed to Virgin Atlantic which is a full-service international carrier. It would be nice I suppose for the group to unify their product somehow. In Australia, although Virgin and Qantas compete head to head, they are not really offering the same thing as QF provides full service whereas Virgin is a LCC with a low cost base and hence, their phenomenal success.
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RE: Virginisation Of The World

Fri Nov 21, 2003 2:27 pm

What can be next is VIRGIN ASIA with HQs in either HKG or KUL or SIN or BKK or PHK and VIRGIN AFRICA (v v v unlikely) HQd in LAGOS or NBO.
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RE: Virginisation Of The World

Fri Nov 21, 2003 2:30 pm

Don't also forget that Virgin Atlantic is half owned by Singapore Airlines and Virgin Blue is half owned by Patrick Corporation.

Branson is selling a brand and an image, I don't think he's really into the whole forming a global airline thing. He's more likely to keep minority holdings in all the airlines and let them run as successsful franchises on their own. Plus Branson can only own about 25% of his airline in the USA??? (Not sure on the foreign ownership limits there) But there are formidable regulatory barriers to overcome before he can connect the group worldwide.

Not to mention he'll face far more competition setting up in the USA then he did in Australia.
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RE: Virginisation Of The World

Fri Nov 21, 2003 2:41 pm

Thats a good point, Sydscott. Yes, it's very much a brand and an image with Virgin. It's a generally successful formula that conveys a sense of fun and also confidence in their marketing. Some of their adds in Oz, especially when they make fun of Qantas have been nothing short of brilliant. Kinda mirrors their antagonism of BA in the UK i guess. Virgin seems to thrive when it's the underdog. Good on them.
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RE: Virginisation Of The World

Fri Nov 21, 2003 8:17 pm

I think Virgin Africa (if it ever happens) would be based in JNB or CPT. SA is the only African country that can sustain a reasonably sized and reasonably deregulated domestic and regional air transport market that is not entirely dependent on foreign tourists to keep it going.

Nigeria may have a domestic market, but it is serviced very haphazardly and the infrastructure is nowhere near what it should be - that plus the bureaucracy and corruption that is rife in that country would put paid to anyone from abroad investing in the airline market there. SAA will only do so if specifically requested to do so by the Nigerian Government and with guarantees in place about who gets paid what and when. If I was SRB, I wouldn keep flying LHR-Nigeria routes but I would avoid any kind of domestic arrangment (even codeshare).

Kenya and Tanzania have domestic networks, but run mostly for the benefit of tourists. They could not sustain a low-cost carrier network dependent on point-to-point traffic, and the governments of both countries would actively discourage anyone from trying to muscle in on their national carrier's territory (especially Kenya). Tanzania has already sold out to SAA, but that venture remains to prove itself a success.
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RE: Virginisation Of The World

Fri Nov 21, 2003 10:36 pm

How advanced are the plans for VIRGIN Africa? I wasn't aware that it was on branson's horizon. It would be "Virgin" territory for them (harhar).
I kinda think that Australia would be a great place to launch a second Virgin international airline to complement the intersecting points of Virgin Atlantic. For example, Virgin Pacific could connect Australia with Asia and the US to meet Virgin Atlantic flights from the UK. Seamless network-no alliance needed! SQ would have something to do with it i guess, seeing as they own half of the parent company.
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RE: Virginisation Of The World

Fri Nov 21, 2003 10:49 pm

Not to offend anyone. But Branson has taken the Virgin label where it was needed. In Australia the collapse of Ansett was a huge benefit. I am not sure he will make it in the USA tho. Southwest, Jet Blue, AirTran,Frontier,ATA,and Spirit do a good job on the LCC front. And Southwest is not going to stand by and let Virgin come in with a red carpet welcome. But then again. It could be a fun way to get Herb out on the line again. To watch Branson and Herb go at it. Now that would be a good and funny site to see .  Smile
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RE: US Airways Vision?

Fri Nov 21, 2003 11:44 pm

I think the Virgin Africa might have been in jest...

SRB has been pretty clear as to why he has minority holdings in Australia and will have in the U.S.--legality. If the ownership rules are relaxed, I think you would find SRB owning the airlines in their entirety. I think he went with SQ for the clout in the South Asia area. They are a high quality airline that would be easier to work with than the other "flag carriers" in the region. JMO, though.

I'll say again about LCC's in the U.S.--they will run out of steam when the nework carriers can start competing on a cost basis. That hasn't happened yet and there's plenty of market share to be had from AA, U and UAL. Americans are still voting with their pocketbooks. Virgin USA's entrance will be interesting.TC
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RE: Virginisation Of The World

Fri Nov 21, 2003 11:55 pm

Yes, it's always interesting whenever Virgin's around  Wink/being sarcastic (sorry!). Virgin has a culture of 'shaking uo the establishment'. They have shown that in Australia and also, I'm sure they are a constant pain in the arse for BA. The US is, as you say a very different market. many many more players...but the market is so much bigger. Interesting times indeed....
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RE: Virginisation Of The World

Sat Nov 22, 2003 1:28 am

SRB can and did own 100% of Virgin Blue under Oz laws.

He sold 51% to Patrick so that a local business would have skin in the game.

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RE: Virginisation Of The World

Sat Nov 22, 2003 1:52 am

One thing to point out is, he raised a huge voice about the "No way BA/AA!" it was painted on the side of his planes. Who thinks for a minute that AA and other majors and also LCC's will not raise there collected voices to give Sir Richard back some of his grief he inflicted on the AA/BA proposed code sharing. Also no denying the success of VS and Virgin Blue, tho VirginExpress as I believe it is called has not been a run away success, as it is hardly ever mentioned.

Also if he bring the same formula as Virgin Blue, you pay for everything on board, well right now all the US LCC's do not charge for beverages and most snacks, some do have food for purchase, tho for the most part it is no charge.

I do think he should do something to make all his brands somewhat similar in scope and what they offer on board.

Time will tell in the end.
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RE: Virginisation Of The World

Sat Nov 22, 2003 2:17 am

Ill tell you though, ive been on airlines where you pay for food on board (Buzz and Ryanair) and i LIKED it. I got a whole can of soda and my favorite candy bar for I think 1.50 UKP- I didnt feel like i was getting ripped off, I could have something if I wanted to and if i didnt then no big deal, and I got what I wanted instead of the prison-like peanut issue. Some flights are short enough where its almost foolish to serve food/beverage. Just sit down and get the plane to the destination. Watching the British Midland F/As chucking sandwiches about the cabin on a flight from MAN-LHR was a form of entertainment- I think i got mine as we were on final!

As for Virgin Express- they are slightly strange, they operate mostly out of London City and with a base in Brussels its more for business people I think and for intra Europe trade. I was looking to book on them to BOD i think and I would have to buy one RT ticket to Brussels and then another down to BOD- I couldnt book straight through.

Virgin Africa though- even if in jest, thats an intersting idea! Africa doesnt seem to have too much good, decent, continuous air service- and there must be some demand given all the people who do work there.
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RE: Virginisation Of The World

Sat Nov 22, 2003 11:16 am

What about Virgin Asia-perhaps SQ could use this franchise for it's new LCC in SE asia-Asia post SARS has HUGE potential: Large, populated cities, plenty of money, fantastic airport infrastructure and new airports, cities that are close to each other. I reckon a new LCC could really eat into the major's market share quite quickly. The worry, is of course SQ's profit.
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RE: Virginisation Of The World

Sat Nov 22, 2003 2:11 pm

A couple of you have said that Virgin should standardise the onboard product but I disagree. Virgin has become successful through differentiation, eg offering a first class service for a business class price (VS Upper Class) or offering a no frills service in a market with a traditionally high-priced duopoly (Virgin Blue). If Virgin USA is to succeed then it will need to differentiate from the majors and the other LCC's or it won't get very far.

Re Virgin Express they are based in Brussels and don't operate any flights ex the UK (apart from Belgium). I think they codeshare on some VLM flights from London City. They were formed when SRB bought Euro Belgian Airlines in the mid-90's....something which he has been quoted as saying was his worst business decision to date!  Nuts

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