Virgin Blue

Low-cost Virgin Blue transforms into a full-service airline

In a bid to become a more powerful, direct competitor to Qantas, Australia’s Virgin Blue is transforming itself from a cheerful low-cost carrier into a full-service business and leisure airline with a low cost base. With the remake, Virgin Blue wants to double its share of Australia’s corporate travel market from 10 to 20 percent and cut its reliance on leisure travel in the process, as competition from other low-cost airlines, such as Jetstar (part of Qantas) and Tiger (50% owned by Singapore Airlines), is driving down leisure fares. Virgin Blue’s earlier attempts to target the business market, with for example a premium economy class, has left the airline somewhat stuck in the middle. 

Strategic repositioning
As part of what Virgin Blue has dubbed a ‘Game Change Program’, the airline has recently announced a series of initiatives that seriously upgrades its product. As Australian Business Traveller nicely summarizes it: “There’s a seismic shift happening at Virgin Blue. A new name, new logo and new brand. New planes with new livery. New business class seats, new cabins and new lounges. New routes. New alliances with partner airlines. New uniforms”. The catalyst for the changes at Virgin Blue has been the appointment in May 2010 of John Borghetti, formerly Qantas’ executive general manager. 

Rebranding
First of all, Virgin Blue will reveil a new brand name by June 2011, which is expected to be either Virgin Australia or V Australia. The airline’s creative director Hans Hulsbosch recently told The Australian that while the Virgin brand would continue to anchor the airline, Blue would no longer be part of the brand. Research has found that as Virgin moved to capture the business-class market, its brand was being held back by perceptions among business travelers that it was purely a budget airline. Furthermore, Virgin Blue wants to consolidate its fragmented brands – Virgin Blue, Pacific Blue, Polynesian Blue and V Australia – which is the result of an agreement between Virgin Atlantic and Singapore Airlines (which owns 49 percent of Virgin Atlantic) that prevents the Virgin brand being used outside Australia. 

New uniforms
Virgin Blue’s new uniforms perhaps best illustrates the airline’s transformation from a cheerful low-cost airline into a full-service carrier targetting business travellers. Created by Project Runway Australia winner Juli Grbac, the new red, silver and purple unifoms are remarkably reminiscent of Virgin Atlantic’s chic and classy style, and replace Virgin Blue’s current more casual outfit
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Low-cost carrier Virgin Blue transforms itself into a full-service airline, with lower costs

In a bid to become a more potent, direct competitor to Qantas, Australia’s Virgin Blue is planning to transform from a cheap and cheerful low-cost carrier to a serious business and leisure airline that has low costs. With the remake Virgin Blue wants to double its share of Australia’s domestic corporate travel market from 10 percent, cut its reliance on leisure travel in the process and limit investments in its network by creating international alliances. The carrier is targeting business flyers as competition from low-cost airlines Jetstar (part of Qantas) and Tiger (50% owned by Singapore Airlines) is driving down leisure fares. The catalyst for the changes at Virgin Blue has been the appointment in May 2010 of John Borghetti, formerly Qantas’ executive general manager.

Consolidating brands
The Virgin Blue Group has a number of substantial issues to resolve. The first one is consolidating its four disparate brands: Domestic carrier Virgin Blue, short-haul international airlines Pacific Blue and Polynesian Blue and long-haul carrier V Australia. Virgin just hired Hans Hulsbosch, who designed the Qantas flying Kangaroo logo, as creative director for the airline. While it is unlikely the Virgin Blue brand will be abandoned, it is possible a number of the sub-brands such as V-Australia and Polynesian Blue will be scrapped. An agreement between Virgin Atlantic and its 49% stakeholder Singapore Airlines however prevents the Virgin name from being used outside Australia. 

Business travelers
The second challenge is to position Virgin Blue for a head-to-head battle with Qantas for a significant stake in the Australian business passenger market. As of May 2011, Virgin Blue will introduce A330s on domestic trans-continental trunk routes such as Sydney to Melbourne, Brisbane and Perth. The A330s will have a separate business class cabin (details have yet to be announced), which may also bring a bit of V Australia’s ‘boutique experience’ to Virgin Blue. To compete with Qantas’ Business class cabin, Virgin Blue launched Premium Economy seating in 2007. It was not successful, however, because there was no clear distinction with the rest of the cabin, and it left Virgin Blue somewhat stuck in the middle. Read full article »

Qantas launches onboard recycling scheme

QF_Recycling Onboard_680x200

Qantas has just rolled out an inflight recycling scheme on its domestic routes. The airline is asking passengers to assist by separating their recyclable items for collection by the cabin crew, and place all other items in a special bag. Qantas says its onboard recycling initiative gives passengers the opportunity to reduce the environmental impact of their journey. With the new program the airline plans to recycle approximately eight-and-a-half million bottles, cups, tumblers and cans per year from its domestic services. Qantas says it already recycles newspapers on board (nearly 500 tonnes a year in Sydney and Melbourne) and glass and plastic bottles, papers and cans are recycled in Qantas Club lounges. Overall, Qantas aims to achieve a 25 per cent reduction in landfill use by 2011.

Qantas’ inflight recycling initiative follows earlier trials by Virgin Blue in which cabin crew were trained to separate recyclable waste from food scraps and other matter while collecting passengers’ rubbish before landing. A few years ago the airline also installed recycling bins at Sydney Airport.
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