Virgin Australia

For the holding company that owns Virgin Australia, see Virgin Australia Holdings.
Virgin Australia
IATA
DJ
DJ
VA		 ICAO
VOZ
PBN
VAU		 Callsign
VIRGIN N1
BLUEBIRD N1
VEE-OZN2
Founded 2000
(as Virgin Blue)
Hubs
Focus cities
Frequent-flyer program Velocity Frequent Flyer
Airport lounge Virgin Australia lounge
(formerly Blue Room)
Fleet size 90 (47 orders)
Destinations 31
Company slogan Now you're flying
Parent company Virgin Australia Holdings Limited
Headquarters Bowen Hills, Brisbane, Queensland, Australia
Key people
Revenue A$2,981.8 million (2010)[1]
Operating income A$87 m (2010)[1]
Profit A$34.3 m (2010)[1]
Total assets A$3,872 m (2010)[1]
Total equity A$933 m (2010)[1]
Website virginaustralia.com

Virgin Australia Airlines, formerly Virgin Blue Airlines, is Australia's second-largest airline[2] as well as the largest by fleet size to utilise the Virgin brand. Now based in Bowen Hills, Brisbane, Queensland, Australia, the airline was co-founded by British businessman Sir Richard Branson and former Virgin Blue CEO Brett Godfrey. It was established in 2000 with two aircraft operating on a single route, and suddenly found itself catapulted to the position of Australia's second airline after the collapse of Ansett Australia in September 2001. The airline has grown to directly serve 29 cities in Australia from hubs in Brisbane, Sydney and Melbourne, using a fleet of narrow-body Boeing and Embraer jets and Airbus widebody jets.

After several years operating as a low-cost carrier it improved its services to become a so-called (self-described) "new world carrier" – essentially a business model with aspects of the "no frills" approach of low-cost carriers but offering services more in line with full-service airlines[3] – in order to compete more effectively with Qantas in the business travel market. In 2011 it took the strategy further with new uniforms; new catering on board; new widebody aircraft to compete with Qantas on Perth – Sydney services; and the concurrent introduction of business class; together with a new livery and a renaming to Virgin Australia. Currently the airline is considered a four-star airline by research consultancy firm Skytrax.[4]

Contents

History

Early years

Virgin Australia was launched as Virgin Blue in August 2000, with two Boeing 737–400 aircraft, one leased from then-sister airline Virgin Express[citation needed].[5] Initially offering seven return flights a day between Brisbane and Sydney, this has since been expanded to cover all major Australian cities and many holiday destinations. The Virgin Blue name was the result of an open competition; it was a play on the predominantly red livery and the Australian slang tradition of calling a red-headed male 'Blue' or 'Bluey'.[6]

The timing of Virgin Blue's entry into the Australian market was fortunate as it was able to fill the vacuum created by the failure of Ansett Australia in September 2001. Ansett's failure allowed Virgin to grow rapidly to become Australia's second domestic carrier, rather than just a cut-price alternative to the established players. It also gave Virgin access to terminal space without which growth would have been significantly limited. Delays in negotiating access to the former Ansett terminal at Sydney Airport however forced Virgin to use its original terminal there—a collection of prefabricated buildings without aerobridges—longer than was needed. As the airline grew, it acquired new equipment, enabling it to phase-out its older 737-400s in favour of 737-700 and −800 series aircraft with modern glass cockpits, winglets and greater fuel efficiency.

Virgin Group's holding in Virgin Australia has since been reduced, initially via a sale of a half interest to Australian logistics conglomerate Patrick Corporation, and later by a public float. In early 2005 Patrick launched a hostile takeover for Virgin Blue. Patrick had been unhappy for some time with the company's direction. By the closure of the offer, Patrick held 62% of the company, giving it control. Virgin Group retains a 25% share. In May 2006 Toll Holdings acquired Patrick and became the majority owner of Virgin Blue. In July 2008 Toll sold its majority holding via a special dividend and now holds 1.7% of the company. Air New Zealand currently owns 19.99% of the company.[7]

Virgin Blue previously used a familiar formula pioneered by airlines such as Southwest Airlines and Ryanair eliminating costs such as included in-flight meals and printed tickets in favour of selling food on-board and using telephone and internet booking systems. It also cut costs in the past by limiting the number of airports serviced and by operating one type of aircraft, the Boeing 737. This strategy changed with the introduction of a second type into the fleet. The airline ordered 20 Embraer E-jets, in a mix of six E170s and 14 E190s.[8] These were ordered specifically so that the airline could re-enter the Sydney–Canberra market that it abandoned in 2004, and to fly to less populous areas.[8][9] The first E-170 arrived in Australia in September 2007 and by the end of the year the three on initial order had been delivered. These were placed on limited-frequency services before full-scale operations were launched on 4 February 2008 with services from Sydney to Canberra (branded as 'Capital Jet' services),[8] Mackay in Queensland, and the New South Wales regional centres of Port Macquarie and Albury, which were promoted with a one-cent fare.[10][11] The flights to Canberra and the regional centres signified an effort to compete more directly with Qantas and its subsidiary QantasLink operation, which flies to all three cities, and with independent Regional Express Airlines.[8]

At its inception in 2000, Virgin Blue did not have interline or marketing alliances with other airlines. However, after the collapse of its domestic competitor Ansett Australia, it began a codeshare agreement with United Airlines. This allowed United customers to fly from the United States to any of Virgin Blue's Australian destinations that United did not already serve. In 2006, in an effort to compete with Qantas, Virgin Blue started exploring these relationships, forming frequent flyer agreements with Emirates Airline, Hawaiian Airlines and Malaysia Airlines. Virgin Blue also has an Interline Agreement with Regional Express Airlines for travellers to and from smaller regional centres in the eastern states of Australia, and codeshares with Skywest Airlines on two routes in Western Australia. In November 2007, the airline announced an agreement with Garuda Indonesia, offering easy transfer from a domestic Virgin Blue flight to an international Garuda service departing from Perth, Melbourne, Sydney or Darwin.[12] Since then Virgin Blue has also announced an agreement with Vietnam Airlines which allows passengers to fly from Melbourne and Sydney and connect with Vietnam Airlines's destinations through its flight network.[13]

Recent developments

In 2008, Premium Economy Class was introduced throughout its entire fleet. New seating was installed in the first three rows of the cabin. These could be converted from three seats in Economy configuration to two seats for Premium Economy. The premium product offered priority check-in, larger baggage allowance, lounge access, priority boarding, increased legroom and all-inclusive in flight entertainment and meals/beverages on board. The product was aimed at business and corporate customers. The airline began charging Economy Class passengers for checked baggage in September 2008.

On Friday, 7 May 2010, Brett Godfrey officially stepped down as Virgin Blue CEO after steering the company through its first ten years.[14] John Borghetti, former Qantas executive general manager, took over as the new Chief Executive.[15] The year also saw Virgin Blue win SkyTrax's Best Low-Cost Airline Australia / Pacific at 2010 World Airline Awards, aheading of Jetstar and Tiger Airways.[16]

In December 2010, Virgin Blue entered into alliances with Etihad Airways[17] and Air New Zealand[18] for code-sharing, reciprocal lounge and frequent flyer access and other co-operational projects.[19]

Virgin Blue also entered into talks with Delta Air Lines about the possibility of joining SkyTeam, one of the top three alliances in the world, as V Australia and Delta sought approval for an agreement between the two airlines to co-operate on trans-Pacific services.[20] The agreement was rejected by the United States Department of Transportation under United States antitrust law.[21] Upon review the agreement was approved by the United States Department of Transportation on 10 June 2011. [22]

Early in 2011 it was announced that Virgin Blue had signed a ten-year deal with Perth-based regional airline Skywest Airlines, for Skywest to operate up to 18 turboprop aircraft leased by Virgin, in order to better compete in east coast regional markets served by QantasLink and Regional Express Airlines. The turboprops would supplement the existing Embraer E-190s and replace the E-170s, which would be phased out due to their being uneconomical on the routes operated by Virgin.[23]

On 20 January 2011, Air New Zealand announced it would take a shareholding stake of between 10% and 14.99% in Virgin Blue. Air New Zealand chief executive Rob Fyfe described the investment "as part of Air New Zealand's strategy to develop scale and reach in this region" but said the airline had no intention of making a full takeover.[24]

In October 2011, the Australian Competition and Consumer Commission (ACCC) approved a proposed code-share alliance between Singapore Airlines and Virgin Australia. The alliance is subject to other regulatory approvals in both countries.[25]

Re-organisation and re-branding

Since the arrival of John Borghetti (former Qantas senior executive) as the CEO of Virgin Blue there has been much speculation regarding a forthcoming re-brand of the airline.[26]

A number of key Qantas staff moved to Virgin Blue while key Virgin Blue staff departed the airline.[27] The airline further announced its intention to operate Airbus A330 aircraft between Perth and the East Coast, starting in May 2011.[28]

In February 2011, the re-brand was confirmed when the airline announced that the word 'Blue' would be dropped from its name as part of a campaign to attract more business travellers away from rival Qantas. This came shortly after the unveiling of new crew uniforms and business-class seats. The airline stated that the re-brand would proceed in stages and would reportedly include a new fleet livery and the renaming of the other Virgin Blue Group airlines as well.[29]

On 4 May 2011, the former Virgin Blue revealed its new name, Virgin Australia, as well as its new livery. In addition to the new name, branding and livery, the airline also showed off its new flagship the Airbus 330 with new domestic business class. Boeing 737 business class seating was also revealed, to be introduced on all of Virgin's jet aircraft by the end of 2011.[30] Pacific Blue and V Australia will both be folded into the new Virgin Australia brand, following an agreement with Virgin Atlantic shareholder Singapore Airlines, which ever since the establishment of Virgin Blue in 2000 had previously prohibited use of the Virgin brand outside Australia.[30][31] Both business and economy class feature grey leather seats, while the 737 also features the new Boeing ‘Sky Interior’ with re-sculpted sidewalls and larger overhead bins.[30][32]

Corporate affairs and identity

Head office

Virgin Australia has its head office in Virgin Village in Bowen Hills, Brisbane. As of 2008 1,000 employees work at Virgin Village.[33] The building, with about 13,220 square metres (142,300 sq ft) A-Grade office space, was triple net leased to Virgin Blue.[34]

As the airline started operations, it decided to place its head office in the Brisbane area. Brett Godfrey, the airline co-founder and Chief Executive for 10 years, said in 2006 that the decision "was a long considered one and has worked well."[35] The airline originally had its head office in Fortitude Valley, Brisbane. The airline purchased a $61 million site in Bowen Hills for its new head office. The firm Sunland Group, which had acquired the Bowen Hills site for $8 million in 2005, had scheduled to complete the new head office in March, and the airline would be ready to move into the new head office by August of the following year.[36] The current head office facility, Virgin Village, formally opened on 17 October 2008.[37]

Subsidiaries

In September 2003, Virgin Blue announced that its wholly owned subsidiary Pacific Blue would offer a low-cost service between New Zealand and Australia. Pacific Blue aimed to position itself as a low-cost competitor to Air New Zealand and Qantas on trans-Tasman routes. Pacific Blue also operates services on behalf of the Polynesian Blue joint-venture with the government of Samoa. Pacific Blue will also come under the Virgin Australia name, livery and operated by Virgin Australia later this year (part of the re-branding)..

In early 2006, Virgin Blue's parent company announced its intention to operate up to seven flights a week to the United States using either Los Angeles International Airport or San Francisco International Airport, saying that the route was needed to make the airline as profitable as possible. On 25 July 2007, it was announced that "V Australia" would be the name of the new carrier.[38]

Marketing and sponsorship

Since its inception, Virgin Blue had sponsored many sporting teams in a bid to promote its brand. In February 2007, Virgin Blue signed a two-year sponsorship deal with NRL team the South Sydney Rabbitohs. The Rabbitohs are the first rugby league team Virgin Australia has sponsored.[39] Boeing 737–800 VH-VUA has slight changes to its livery to commemorate this sponsorship. The Australian flag held by the "Virgin Girl" is replaced by the Rabbitohs' flag. Virgin Australia is also the official sponsor of the National Basketball League (NBL), and the title sponsor of NBL team the Brisbane Bullets.

In November 2010, the Australian Football League (AFL) decided not to renew its marketing contract with Qantas, instead choosing Virgin Blue for a deal worth A$5–8 million.[40][41]

Virgin Blue gained extra revenue (and publicity) by painting two aircraft as "flying billboards". One promoted a brand of men's razor, the other a Queensland Government campaign to attract businesses to the state.[42] Both aircraft have since been withdrawn from the Virgin Blue fleet.

In 2007 Virgin Blue introduced an advertising campaign with the slogan "Get What You Want". The television commercials used in the campaign featured a song of the same name by Queensland band Operator Please. In 2009, Virgin Blue introduced an all new advertising campaign entitled "Now there's an idea". TV Commercials showing comparisons between flying in Australia in 1999 as opposed to 2009 were screened, to the tune a song by The Cat Empire. New billboard advertising was launched, showcasing Virgin Blue's variety of products and on-time performance records. In 2011, with the airline's rebranding as Virgin Australia, the airline's slogan was changed to "Now you're flying".[43]

Awards

Virgin Blue Airlines has won a number of awards since its inception. The airline and certain of its employees won five 2009 Service Excellence Awards of the Customer Service Institute of Australia.[44] Since being named as Best Low-Cost Airline in the Asia/Pacific region in the Skytrax 2002 Airline of the Year Survey, the airline has also been voted best airline in a number of different categories and by a number of different organisations.[44]

The airline's Frequent Flyer program Velocity Rewards won the 2009 Freddie Awards, the largest award in the travel industry, for Best Frequent Flyer Program, Best Award Redemption, Best Affinity Credit Card, Best Member Communications, Best Website. This was the fourth consecutive Freddie Awards that Velocity has won.[45]

Destinations

Main article: Virgin Australia destinations

Fleet

As of October 2011 the Virgin Australia fleet consists of the following aircraft:[46]

Current Virgin Australia fleet[46]
Aircraft In Fleet Orders Passengers Notes
J W Y Total
Airbus A330-200
2
3[47]
27
—
251
278[48]
Boeing 737–700
14
—
—
12
126
138
—
—
144
144
Boeing 737–800
50
44
—
12
162
174
8
—
168
176[32]
—
—
180
180
Boeing 777-300ER 5
—
33
40
280
353
Embraer E-170 1
—
—
12
66
78
 To be phased out in 2011/2012.[49]
Embraer E-190 18
—
—
12
92
104
Total 90
47

Initially Virgin Blue leased its aircraft but many recent additions to the fleet have been purchased outright. Virgin Blue-owned Boeing 737s are indicated by the Boeing customer code FE in the model suffix.

In November 2006, Virgin Blue announced plans to purchase 11 Embraer E190 and three Embraer E170 aircraft with options for six more E-jets. These later became orders for an additional three E170s and three E190s.[50] In February 2008 a further four E190s were ordered, leaving six options and ten purchase rights.[51]

Virgin Blue received its first Embraer 170 in early September 2007 at a special ceremony at the Embraer plant in Sao Jose dos Campos.[52] The ERJ-170s introduced a revised logo on their tails, bringing the Virgin Blue brand into line with the logos of other Virgin-branded companies.[8]

Like Virgin Atlantic, Virgin Blue gives the aircraft in its fleet names, often incorporating female names and words connected with Australian cities and localities or other quintessentially Australian themes. Names on Virgin Blue aircraft include 'Brissie Lizzie' ("Brissie" being an Australian slang name for Brisbane, and "Lizzie" being slang for Elizabeth), 'Sassy Sydney' (Sydney is a female name as well as the name of Australia's largest city), 'Prue Blue' (incorporating the name Prudence and also a pun on the Australian phrase "true blue", meaning "patriotic"), 'Tassie Tigress' (incorporating both the slang name for Tasmania and the common name for the Thylacine) and 'Mackay-be Diva' (a pun on the city of Mackay, Queensland and Makybe Diva, a famous Australian racehorse). Each aircraft in the Virgin Blue livery (some are painted in Pacific Blue livery for cross-promotional reasons) also features a "virgin girl" as nose art, complete with a wide-brimmed Aussie hat, trailing an Australian flag.

On 24 October 2007, Virgin Blue announced the introduction of Premium Economy on all domestic flights. As the E-jets already have four-abreast seating, the number of seats on these aircraft remained unchanged after the rollout of Premium Economy.[53]

An agreement was signed with Boeing on 1 April 2010 for an order of fifty firm Boeing 737–800 aircraft, with flexibility to convert to either Boeing 737–700 or Boeing 737-900ER, as well as 25 additional options and 30 future purchase rights. Delivery is scheduled from June 2011 through to 2017.[54] The new aircraft are expected to replace some of Virgin Blue’s existing narrow body fleet, while the remainder will be deployed to new routes and boost frequency according to demand.[54]

2011 regional expansion

On 10 January 2011, Virgin Blue entered a 10 year strategic alliance with Perth-based Skywest Airlines, to operate up to 18 new Virgin-branded turboprop aircraft from mid-2011.[55] On 23 February, it was announced that the aircraft would be ATR-72s, to enter service beginning in May 2011; they would allow Virgin Blue to both replace its fleet of Embraer E170s and introduce new regional routes. The turboprops will be operated by Skywest Airlines under a wet lease agreement.[56] The May in-service date was not met, and in late July the first announcement was made concerning routes to be served. It was reported that the ATR-72s would be initially employed on services between Brisbane and Gladstone, Queensland; from Brisbane and Sydney to Port Macquarie in New South Wales; and on additional services between Sydney and Canberra.[57]

Long Haul International Operations

Virgin Australia began Long Haul International Operations as V Australia, commencing its first passenger flight operations on 27 February 2009.[58] V Australia was re-branded as Virgin Australia's Long Haul International Operations on 7 December 2011.[59]

Services

Cabin classes

Domestic and Short Haul International Operations

Business Class Virgin Australia offers a business class service on its Airbus 330 and select 737-800 aircraft. It boasts a 150 cm (60inch) seat pitch on the Airbus aircraft and a 95cm (38inch) seat pitch on its 737-800 aircraft.

Premium Economy Premium Economy seats are offered on select aircraft, boasting a 85+cm (34+inches) seat pitch

Economy Economy seats offer between (31-33inch)seat pitches.

Long Haul International Operations

Virgin Australia offers a 3-class service on its Boeing 777-300ER aircraft: International Business Class, International Premium Economy Class and International Economy Class. All three classes feature ambient Mood Lighting relative to the time of day or night, similar to that of sister airline Virgin America.

International Business Class International Business class[60] has a 2-3-2 configuration with fully horizontal flat beds that are 188 cm (6'2") long and seat pitch of 77". There is a personal workstation with laptop power, USB slot and reading light. Business Class In-Flight entertainment has a 12.1" touchscreen PTV with AVOD on every seat.

International Premium Economy Class Premium Economy class[61] has a 2-4-2 configuration. Premium Economy has all-leather seats with a 38" seat pitch, 20" seat width and a 9" seat recline. The seats are equipped with adjustable headrests and footrests. There is a personal workstation with laptop power, USB slot and reading light. Premium Economy class In-Flight entertainment has a 10.6" touchscreen PTV with AVOD on every seat.

International Economy Class International Economy class[62] has a 3-3-3 configuration. Economy seats have a 32" seat pitch, 18.8" seat width and seat recline up to 6". USB slots are available to power laptops and other personal devices (MP3 Players etc.). Economy class In-Flight entertainment has a 9" touchscreen PTV with AVOD on every seat.

Food and beverages

Virgin Australia offers Business Class passengers a "sophisticated" gourmet menu created by Australian chef Luke Mangan. For lunch and dinner this includes a full three course meal prepared on board by the crew.[63]

The food menu is accompanied by a premium range of Australian wines, beers and spirits and non-alcoholic beverages, including barista style coffee.[63]

Economy Class depending on the fare purchased, offers an all inclusive meal for Flexi fare passengers. Alternately, for Saver Fare passengers, a buy on board service with food and drinks available for purchase is offered from a separate menu by Luke Mangan which includes a gourmet range of snacks, meals and beverages. The menu is available on all flights and on selected flights passengers also have access to hot snacks, hot meals and speciality products such as gourmet ice cream.[63] The airline also serves snacks and drinks, free of charge, including beer and wine after 4pm on Capital Connect services. These services include flights between Canberra to Sydney and Melbourne.[63]

In-flight entertainment

Live2Air In December 2006, Virgin Blue announced a partnership between Australian cable television providers Foxtel and Austar, to introduce a "Live2Air"[64] service on most flights by mid 2007. The Live2Air system is only available on some Boeing 737 aircraft.

Virgin Australia's 777-300 aircraft's In-Flight entertainment RED is based on the Panasonic eX2 system. RED is fully touch-screen and handset controlled. There is no fee for use. RED features an extensive video on demand library that includes new release film, TV series and TV programmes. Destination guides are available. Other functions available through RED include music on demand (approx 200+ CD library) and video games. Seat-to-seat chat is available as well as in flight map and flight information.

Reservation system

Virgin Australia's reservation system is managed by Navitaire.[65] The reservation suffered a system crash on the weekend of 26 September 2010 disrupting passenger arrival and departure services nationally.[66]

Virgin Australia lounge

To capture a share of the business traveller market, Virgin decided to provide a members' lounge facility for travellers. Originally this was called The Blue Room and provided facilities to members and guests on a pay-as-you-go basis. Many of these facilities became available when Virgin relocated into the former Ansett terminals across the country, with the defunct Golden Wing club lounges left behind being utilised as Blue Room lounges, complete with furnishings.

In 2006, Virgin revamped the lounge facilities and re-launched the product as The Lounge, which offered all-inclusive facilities on a membership fee or casual fee basis. Upgraded facilities provided included buffet food and refreshments, newspapers, showers, computers, and WiFi internet access for travellers.

In May 2011, Virgin again renamed the lounge simply referring to it as Virgin Australia lounge - designed to be a premium experience, with spaces designed for specific uses and 'moods'.

Locations

Virgin Australia also has agreements to use Air New Zealand's Koru Lounge, Alaska Airlines' Boardroom Lounge in Los Angeles (Terminal 3) and Etihad Airways' Lounge in Abu Dhabi.

Access

Membership can be purchased online by logging into a passenger's Velocity Frequent Flyer account. Membership fees vary depending on the elite status level. Lifetime memberships are also available for purchase.Virgin Australia Lounge Membership Prices

Velocity Frequent Flyer

The then Virgin Blue launched its frequent-flyer program Velocity Rewards in 2005, with partner National Australia Bank offering a companion credit card. By 2007, points collected from selected Westpac, American Express and Diners Club Cards could be transferred to Velocity Rewards, and effective September 2008, ANZ Reward Visa Card points as well.

Initially, Velocity was different from most other frequent flyer programs in two ways. First, points were earned relative to the cost of a flight, rather than the length. Velocity members originally earned 6 points per dollar spent on Virgin Blue flights. This was later altered due to the introduction of status levels; Red members now earned 5 points per dollar, Silver members remained at 6 points, and Gold members earned 7. Points on Virgin Blue's long-haul carrier V Australia, as well as the majority of Velocity's airline partners have always been earned per mile.

Second, Velocity was the first frequent flyer program in Australia to offer "any seat, any time" reward flight availability. The amount of points required to redeem an award seat directly corresponds to the current fare of that seat, allowing any seat currently available to be redeemed. Rival Qantas introduced a similar feature to their frequent flyer program in May 2008.

Status levels were introduced to the program in late 2007 as part of continued efforts to attract business travelers. Alongside the entry-level "Red" status, frequent travelers were given the opportunity to attain "Silver" and "Gold" status, each with its own set of benefits.

In August 2011, the program was relaunched as "Velocity Frequent Flyer" and a Platinum status level was introduced among other changes.

As of February 2008, Velocity Rewards had 1.3 million members and Virgin Blue stated it was considering selling it or entering into a joint venture once its operation was profitable, and considered a membership of 1.6 to 1.7 million members would put the operation in a break-even position.[70]

Controversies

Footnotes

Notes

1. ^ Virgin Australia has a written agreement with Virgin Atlantic for Virgin Blue to use the "Virgin" callsign domestically in Australia. Outside Australia it cannot be used, so separate brands like Pacific Blue (callsign Bluebird for Pacific Blue NZ or Bluey for Pacific Blue International services operated by Virgin Australia) and joint venture Polynesian Blue have been created.
2. ^ Virgin Australia International Airlines (formerly known as V Australia) still operates under a different IATA and ICAO code, despite being under the same brand.

References
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