The airline formerly known as Virgin Blue is shifting into high gear for its assault on Qantas. But the change of name to Virgin Australia is more than just a rebranding – it’s a complete renewal of the airline, which has abandoned its roots as a no-frills and purely low-cost carrier.
“We will break what has been a monopoly in business class since the days that Ansett stopped flying,” pledges Virgin Australia CEO John Borghetti, himself a 30-plus year veteran of Qantas. “Everywhere I go, business travellers tell me they want more competition,” he says. “They are crying out for it. They face competition in the environment they operate in and they know it compels them to strive to be better.”
Attending the Virgin Australia launch in Sydney, Sir Richard Branson said that business travel was all about the details: “Every single little detail has to be right. For the amount of money people pay for business class, they should expect that they want everything, every box ticked.”
Branson believes his Virgin Atlantic and Virgin America airlines offer the best business class in their markets. “And because they do that we can afford to be competitive in the back end of the plane. What we want to do is replicate this in Australia, and have the best business class as well as the best economy class.”
To take on the Red Roo, Borghetti has developed an ambitious ‘Game Change’ program with which he aims to snare up to 20 percent of Australia’s domestic business travel market within the next two years. “Can we do it? Many people have asked that question,” Borghetti observes. “Of course we can do it… the corporate and business end of the market is effectively controlled by one player, one player with a significantly higher cost base. With our low cost base we can offer competitive, value-for-money corporate fares. From our perspective we have everything to gain from this (and) our competitors have everything to lose. No competitor is invincible.”
New business class
In seeking to revitalise the airline and win over the corporate and business travel sector, Borghetti has rolled out a raft of changes to the new Virgin Australia. Virgin Australia will add a proper business class to its domestic aircraft, beginning with the new Airbus A330s now running daily between Sydney and Perth.
The luxury leather seats boast 62 inches of legroom and seatback video screens, with a full meal service based on a menu designed by award-winning Aussie chef Luke Mangan. (Mangan is also overseeing the menu in economy class, but if you’re at the pointy end of the plane you won’t have to pay for your meals and drinks.)
Travellers on the A330 will enjoy “international-style amenities” including noise-cancelling headphones, toiletries from Bvlgari and Grown, plush blankets and pillows. Another bonus will be limousine transfer to and from Sydney airport with a 60km limit – which basically covers north to Palm Beach, west to Blacktown and south-west to Camden. Travellers will need to make their own arrangements in Perth.
Members of Virgin Australia’s Velocity Rewards program who book two round-trip Sydney-to-Perth trips in business class will also receive complimentary Velocity Gold status for one year. New business and economy seats, clad in leather, are also being fitted to the Boeing 737-800s which make up the bulk of Virgin Australia’s domestic fleet.
New lounges
Airport lounges are a welcome haven for business travellers, and Virgin Australia has a few new twists to the formula. Sydney Airport now boasts Australia’s first fast track check-in which lets business class and Velocity Gold passengers go ‘from kerb to couch’ in under two minutes. After being dropped off by taxi at the direct kerbside entry, or leaving your car with the Virgin Australia concierge for valet parking, travellers enter a dedicated check-in area with its own security screening gate, beyond which is an entry into the Virgin Australia lounge. This time-saving convenience will be a significant drawcard for business travellers.
Up next will be a renovation of the Virgin Australia lounges with a modern design aesthetic that’s a step closer to the sharp vibe of Virgin Atlantic. Melbourne’s new-look lounge opened in late May, with Brisbane slated for this month. Both will have a priority access lane to provide business travellers and frequent flyers with a dedicated security lane for a streamlined lounge-to-gate experience.
International alliances
Virgin Blue’s international arm V Australia is also being rolled into the Virgin Australia rebranding, with a series of partnerships to help woo international business travellers. Air New Zealand now provides ‘codesharing’ and single-ticket booking for flights across the Tasman – which is Australia’s most popular overseas route, accounting for over 3 million passengers per year or 11 percent of Australia’s total passenger movements, yet one in dire need of competition. A similar arrangement with Etihad covers flights via Abu Dhabi, while a proposed alliance with US carrier Delta which would open up the US market awaits approval by the US government. Virgin Australia also intends to reach “all of Asia” by the end of this year through partnerships with one and possibly several Asian airlines.
“The IMF predicts that within five years Asia’s economy will be about 50 percent larger than it is today, account for more than a third of global output, and be comparable in size to the economies of the US and Europe” Borghetti notes. “We are positioned on the doorstep of Asia and we are going to play in that space.”
Velocity Rewards overhaul
Virgin Australia’s Velocity frequent flyer program is set for an upgrade, with Borghetti going so far as to call it the “launch of a new loyalty program” which could even see the Velocity brand ditched entirely. At the time of writing Virgin Australia was believed to be working with the Coles FlyBuy program to let members earn Velocity points for each dollar spent at participating FlyBuy outlets including Coles, Target, Kmart, Liqourland and Budget car rentals. The Virgin Blue-Coles FlyBuy partnership would allow each company to take on its larger competitors of Qantas and Woolworths, which already enjoy a highly promoted dollars-for-points deal between the Woolworths Everyday Rewards Card and Qantas Frequent Flyer programme.
All this creates an environment in which travellers can cut the best deal. Virgin Australia will want to win your company’s business, and Qantas will want to keep it. So make the most of this opportunity – and while you’re nailing down the best fares, also consider asking for extras like a ‘status match’ from Qantas Frequent Flyer Gold or Platinum to Virgin Australia’s Velocity Gold. And if you get the chance, sample the new Virgin Australia – if only to keep Qantas on its toes.
–David Flynn is the editor of Australian Business Traveller
