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Virgin Blue
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Virgin Blue is an Australian low-cost airline, Australia's second-biggest airline as well as the largest airline (by fleet size) with the Virgin branding. It was founded by British businessman Richard Branson's Virgin Group.
in Blue was launched on 31 August 2000, with two aircraft initially offering seven return flights a day between Brisbane and Sydney. This has been expanded to cover all major Australian cities and many holiday destinations.
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 in September 2001.
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Encyclopedia
Virgin Blue is an Australian low-cost airline, Australia's second-biggest airline as well as the largest airline (by fleet size) with the Virgin branding. It was founded by British businessman Richard Branson's Virgin Group.
History
Virgin Blue was launched on 31 August 2000, with two aircraft initially offering seven return flights a day between Brisbane and Sydney. This has been expanded to cover all major Australian cities and many holiday destinations.
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 in September 2001. Ansett's failure allowed Virgin Blue to grow rapidly to become Australia's second domestic carrier, rather than just a cut-price alternative to the established players. It also gave them 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 Blue to initially use a temporary terminal there.
Virgin Group's holding in Virgin Blue 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.
Virgin Blue uses 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 has now changed with the introduction of a second type into the fleet. The airline has ordered 20 Embraer E-jets, in a mix of six ERJ-170s and 14 ERJ-190s, with the intent of taking as many as another 20 aircraft. These were ordered specifically so that the airline could re-enter the Sydney–Canberra market that it abandoned in 2004, and to fly to other destinations with less traffic. The first ERJ-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), Mackay in Queensland, and the New South Wales regional centres of Port Macquarie and Albury. A one-cent fare was used to promote the Port Macquarie and Albury services. The flights to Canberra and the regional centres signify an effort to compete more directly with Qantas and its subsidiary QantasLink operation, which flies to all three cities, with independent Regional Express Airlines, which flies to Albury, caught in the middle.
In September 2003, Virgin Blue announced that its wholly owned subsidiary Pacific Blue would offer a similar cheaper service between New Zealand and mainland Australia. Pacific Blue aims to position itself as a low-cost competitor to Air New Zealand and Qantas on trans-Tasman routes. Air New Zealand also had a low-cost airline Freedom Air (which ceased operations in March 2008) and Qantas deployed Jetstar on selected New Zealand routes. Both Qantas (and its wholly owned New Zealand subsidiary Jetconnect operating as a Qantas branded franchise) and Air New Zealand continue to operate these routes in their own right. In August 2007, Virgin Blue announced their intention to begin domestic Pacific Blue services within New Zealand. Flights between Auckland and Wellington, Christchurch and Wellington, and Auckland and Christchurch, began on 12 November 2007.
Qantas responded to Virgin Blue's lower cost base by creating a new low-cost domestic carrier, Jetstar Airways, in 2004. In May 2005 Jetstar announced that it would also commence services to Christchurch, New Zealand, and in 2006 many other overseas destinations.
At its inception in 2000, Virgin Blue did not have interline or marketing alliances with any other airline. The first exception to this was after the collapse of its domestic competitor Ansett where it began a codeshare agreement with United Airlines, which allowed United customers to fly from America to any of Virgin Blue's Australian destinations that United did not already serve. In 2006, in an effort to be more competitive with rival Qantas, Virgin Blue started exploring these relationships, forming frequent flyer agreements with Emirates Airline, Hawaiian Airlines and Malaysia Airlines. Virgin Blue also has an Airline Agreement with Regional Express Airlines for travellers to and from smaller regional centres. In November 2007, the airline announced an interline deal with international carrier Garuda Indonesia, offering easy transfer from a domestic Virgin Blue flight to an international Garuda service departing from Perth, Melbourne, Sydney or Darwin. Recently, Virgin Blue has announced an interline agreement with Vietnam Airlines which allows passengers to fly from Melbourne and Sydney to Ho Chi Minh City, then transfer easily to any of the 41 international and 18 domestic destinations served by Vietnam Airlines.
The airline began charging for checked baggage in September 2008.
Virgin Blue's name was the result of an open competition; it is a play on the predominantly red livery and the Australian slang tradition of calling a red-headed male 'Blue' or 'Bluey'.
V Australia
In early 2006, Virgin Blue 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. The airline has also expressed interest in flying to Japan. Virgin Blue ordered six Boeing 777-300ER aircraft from Boeing for use on international routes. It will lease a seventh aircraft from International Lease Finance Corporation. On 25 July 2007, it was announced by Virgin Blue that "V Australia" will be the name of the new carrier. On 30 March 2008 it was announced that V Australia's first route would be Sydney Airport to Los Angeles International Airport starting 15 December 2008. Due to strike action at the Boeing factory, in October 2008 it was announced that the inaugural flight would not take place until 28 February 2009. The Boeing 777-300ER launched services to LA on 28th February, and operates in a three-class configuration.
Fleet
As of February 2009 the Virgin Blue fleet consists of the following aircraft:
Virgin Blue Fleet | Aircraft | Total | Passengers
(until Early 2008) | Passengers
(with Premium Economy) | Notes |
|---|
| Boeing 737-700 | 22 | 144 (144) | 138-144
(0-12/126-144) | Premium Economy convertible | | Boeing 737-800 | 28
(9 orders) | 177 (177)
180 (180) | 171-177
(0-12/159-177)
174-180
(0-12/162-180) | Premium Economy convertible | | Embraer 170 | 6 | 76 (76) | 76 (12/64) | Premium Economy seats not convertible | | Embraer 190 | 13
(5 orders) | 104 (104) | 104 (12/92) | Premium Economy seats not convertible |
Initially Virgin Blue leased its aircraft but many recent additions to the fleet have been purchased outright. In June 2006, Virgin Blue placed an order for nine Boeing 737-800s by exercising purchase rights it held. Delivery of the aircraft is scheduled to begin in 2008. 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 ERJ-190 and three Embraer ERJ-170 aircraft with options for six more E-Jets, which later became orders for three ERJ-170s and three ERJ-190s. These options were subsequently exercised, and in February 2008 a further four ERJ-190s were ordered. Virgin Blue also holds another six options and ten purchase rights on E-Jets.
Virgin Blue received its first Embraer 170 in early September 2007 at a special ceremony at the Embraer plant in Sao Jose dos Campos. The ERJ-170s have introduced a revised logo on their tails, bringing the Virgin Blue brand into line with the logos of other Virgin-branded companies.
Like "big brother" 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 colours (some are painted in Pacific Blue colours 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 announced that they will be introducing a Premium Economy service on all domestic flights. The first three rows of each aircraft now feature red leather seats that can be converted to a 2 x 2 Premium Economy configuration, or to Virgin's regular 3 x 3 economy configuration depending on load requirement. The Premium Economy service includes an increased seat pitch and baggage allowance, priority boarding, access to The Lounge, as well as complimentary live2air in-flight entertainment and food / beverages. Because the seating configuration on the Embraer aircraft is already 2 x 2, the amount of seats on these flights will remain unchanged, but they still carry the new Premium Economy product.
The Lounge
To capture a share of the business traveller market, Virgin Blue 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 Blue relocated into the former Ansett terminals across the country, with the defunct "Golden Wing" club lounges left behind being utilised as Blue Rooms.
In 2006, Virgin Blue revamped the lounge facilities and renamed it The Lounge, which offers all-inclusive facilities for a membership fee or casual fee basis. Facilities that are provided include buffet food and refreshments, newspapers, computers, and WiFi internet access for travellers.
Currently they are located at Brisbane, Sydney, Melbourne, Adelaide and Canberra airports. A new lounge is planned for Perth and due for opening in April 2009.
Velocity Rewards
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. Effective September 2008, ANZ Reward Visa Card holders can transfer points for Velocity Rewards.
Velocity is unique, in comparison to other frequent flyer programs, in two ways. First, points are 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 has since been altered due to the introduction of status levels; Red members now earn 5 points per dollar, Silver members remain at 6 points, and Gold members earn 7. However, points on Virgin Blue's long-haul carrier V Australia, as well as the majority of Velocity's airline partners, are still earned per mile.
Second, it is unique in that it 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 airline Qantas is introducing a similar feature to their frequent flyer program in May 2008.
As part of Virgin Blue's continued effort to attract business travelers, status levels were introduced to the program in late 2007. Alongside the entry-level Red status, frequent travelers can now obtain Silver and Gold status, each with its own set of benefits.
By 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.
Live2Air
In December 2006, Virgin Blue announced a partnership between Australian cable television providers Foxtel and Austar, to introduce a "Live2Air" service on all flights by mid 2007. Approximately half the fleet had been fitted with Live2Air facilities by March 2007.
Virgin Blue was the first carrier outside North America to introduce multi-channel real-time satellite TV to its flights.
The Live2Air system costs $4.90 on short flights, and $9.90 on longer flights. The system is available free of charge for all passengers until approximately 10 minutes after takeoff. After this period, the passenger must swipe their credit card to continue viewing.
An advertising channel and a flight track channel are free of charge for all passengers throughout the flight.
Sponsorship and marketing
On 8 February 2007, it was announced that Virgin Blue had signed a two year sponsorship deal with NRL team the South Sydney Rabbitohs. The Rabbitohs are the first rugby league team Virgin Blue has sponsored. 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 with the Rabbitohs flag.
For the 2008 Super 14 season, Virgin Blue was the sleeve sponsor for the Queensland Reds.
Virgin Blue is also the official sponsor of the Australian National Basketball League (NBL), and the title sponsor of NBL team the Brisbane Bullets.
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 Queensland. 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.
Inflight services
Virgin Blue offers a fully inclusive food and drink service for it's Premium Economy Class, while Economy Class offers a buy on board service with food and drinks for purchase.
Customer service
- In 2003 A man with a disability and having incomplete quadriplegia was removed from a Virgin Blue flight because staff thought he was drunk or a terrorist. He subsequently settled a lawsuit against the airline.
- In January 2007 Virgin Blue attracted controversy when its staff at Adelaide Airport ordered a passenger to remove a T-shirt bearing the slogan 'World's Number One Terrorist' above an image of George W. Bush. The wearer, Allen Jasson of London, was informed that the garment was potentially offensive. Jasson had also experienced difficulty on earlier flights with Qantas. A spokeswoman for Virgin Blue defended the decision.
- In April 2007 the airline lost a discrimination case appeal over the age of flight attendants they employed. Eight former flight attendants aged over 34 from another airline had applied for employment with Virgin Blue but none had gained work. They claimed they were discriminated against because of their age and won compensation in March 2006. The airline's appeal against this decision failed and the company was ordered to pay costs.
Tribunal member Douglas Savage found that the assessors were biased towards older women, and that the company had failed to offer a reasonable explanation for why no one over 36 was employed as cabin crew during the airline's recruitment drive between 2001 and 2002.
- In May 2006 a controversy arose over Virgin Blue's policy with regard to passengers with disabilities. Chief Executive Brett Godfrey affirmed the policy of the company that passengers who were "unable to look after themselves on board should travel with carers". After a hearing in the Australian Human Rights and Equal Opportunity Commission, Virgin Blue backed down from this policy, agreeing to limit it to passengers weighing over 130 kg. However the chair of the ACT Disability Advisory Council, Craig Wallace, who uses a wheelchair, was refused passage on a Virgin Blue flight booked for 8 October 2006. In a media release on 29 September, ACTDAC claimed that "Virgin Blue has also refused to refund $418 in fares from the flight for Mr Wallace or Council staff. Ironically, they have listed these fares as a ‘credit’ – a credit Mr Wallace or other people in his situation are prohibited from accessing by Virgin’s own policy".
Associated carriers
- Pacific Blue – Operates domestic services in New Zealand, trans-Tasman services and also services the Pacific Islands.
- Polynesian Blue – a joint venture between Virgin Blue and the Samoan Government, it operates direct return flights Apia–Sydney and Apia–Auckland, with many connections to other cities, using Pacific Blue aircraft.
- V Australia – Virgin Blue's long-haul subsidiary operating flights from Sydney and Brisbane to Los Angeles starting in February and March 2009 respectively.
See also
External links
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