Virgin Blue rebrands as ‘no-frills chic’ Virgin Australia


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We have reported before on the plans by Australian hybrid low-cost airline Virgin Blue to reposition itself as a more direct competitor to Qantas and double its share of Australia’s corporate travel market from 10 to 20 percent. Virgin Blue has just officially unveiled its new name – Virgin Australia – and new livery. The rebranding completes 10-year old Virgin Blue’s revamp into a ‘no-frills chic’ airline. Says Virgin Australia CEO John Borghetti, “We will still offer low airfares, keeping the competition in the sky high.”

Virgin Australia
Virgin Blue and its associate airlines—V Australia and Pacific Blue—will be rebranded Virgin Australia after the Virgin Group reached an agreement with Singapore Airlines (SIA) regarding the use of the Virgin name on international services to/from Australia. As part of its acquisition of a 49 percent steke in Virgin Atlantic back in 2000, SIA was given a veto on the use of the Virgin brand in the Asia-Pacific region outside of Australia, forcing Virgin Blue to brand its international operations Pacific Blue for regional services and V Australia for long-haul operations. Virgin Australia (tagline “Now You Are Flying”) will replace the domestic Virgin Blue brand immediately and international brands V Australia and Pacific Blue by the end of 2011.

B737-800 Sky Interior
Virgin Austalia also showcased the widebody and narrow-body versions of its new product on an Airbus A330 and Boeing 737. The new makeover, both exterior and interior, is styled after the carrier’s U.S. sister airline Virgin America.

Virgin Austalia ‘s newest 737-800 comes in Boeing’s new Sky Interior, which features mood lighting, larger overhead lockers and sculpted sidewalls designed to provide a feeling of spaciousness. Virgin Australia’s 737-800 also debuts a new business class cabin with eight leather seats with a 37-inch seat pitch. A purple plexiglass dividing panel, also found on Virgin America’s jets, separates the business and economy sections and the LED lighting will be purple and white. The new Boeing 737-800 interiors will be rolled out across the majority of Virgin Australia’s current domestic fleet by the end of the year. Virgin Australia also said it will announce an innovative entertainment option shortly, which suggests it may be looking at iPads or similar devices.

Trans-continental A330
On domestic coast-to-coast trunk routes, Virgin Australia will introduce A330 widebody aircraft, starting with Sydney to Perth in May 2011. The A330s, obtained from Emirates, feature a full business class product with video on demand, an amenity kit, espresso coffee and celebrity-chef food prepared on board. Although the leather seat in Business Class is not lie-flat, it offers a deep recline and a seat pitch of 62 inches (see here for a virtual tour. Virgin Australia has already unveiled aggressive trans-continental business fares using its lower cost base to ‘attack’ Qantas, which has responded by introducing Boeing 747s on domestic Perth routes.

Game change plan
Other upgrades unveiled earlier as part of Virgin Blue’s AUD35 million ‘game change plan’ include new crew uniforms, a new in-flight menu designed by celebrity chef Luke Magnan and a new lounge in Sydney with kerbside access and dedicated in-lounge security channel. Virgin Australia will also open redesigned lounges in Melbourne and Brisbane in the coming weeks and relaunch its frequent flyer program later in 2011.

CEO Borghetti has also forged alliances with overseas airlines such as Air New Zealand, Delta Air Lines and Abu Dhabi-based Etihad to give corporate travellers an attractive network. The airline is also looking for an Asian alliance partner, with Singapore Airlines being a likely candidate as part of the deal to obtain Virgin Australia’s naming rights.

However, the stakes are high for Virgin Blue’s ambitious makeover into Virgin Australia. The airline has been losing money in the past quarters, analysts estimate Virgin’s 2010-11 loss to be over AUD30 million and the airline’s profit estimation for next year have also been cut back. As Australian aviation consultancy CAPA puts it: “The product ingredients are in place. But there are challenges, with high fuel prices, a cautious retail market, stiff competition and the challenge of making the airline profitable while all the new costs are being absorbed. The journey begins today for Virgin Australia.”

Related articles:
Low-cost Virgin Blue transforms into a full-service airline
Hybrid low-cost carrier airBaltic offers organic food, Nespresso and iPads in-flight
Flydubai first to operate 737 with new Sky Interior

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