In Virgin Blue-Etihad alliance, it’s old friends re-united


As Virgin Blue’s V Australia prepares for a major strategy shift by launching flights to Abu Dhabi next month as part of its alliance with Etihad Airways, it is worth noting the partnership has a friendship at its core.

Virgin Blue chief executive John Borghetti and his counterpart at Etihad Airways, James Hogan, were all smiles at Virgin’s annual results last August, above, when the Etihad partnership was announced.

And rightly so: Borghetti and Hogn were breaking out of their decades-long classification as second place contenders.

Borghetti Hogan 3.JPG“I started in Ansett in 1975 checking in bags at Melbourne airport,” Hogan says, “and I think you were the–”

“Mail boy,” Borghetti chimes in.

“Mail boy at Melbourne airport.”

“I was envious at the time,” Borghetti says with a grin to Hogan. “You were checking bags.”

Borghetti rose to be Qantas’s general manager but quit after being passed over for the top post in favour of then-Jetstar chief executive Alan Joyce. When Borghetti joined Virgin last year, it was immediately apparent to staff that Borghetti was out to prove himself. He would make Virgin, the hipster up-start, a worthy rival to the revered and dignified carrier he spent so long with.

Borghetti Hogan 2.JPGHogan had a stint as Gulf Air’s chief executive but left over managerial differences, as did a few other aviation faces. At Etihad, Hogan would lead a cash-rich carrier with superior service placing mind-boggling aircraft orders yet would always be overshadowed by neighbouring Emirates.

For Borghetti and Hogan, last August was their time.

By codesharing with Etihad out of Abu Dhabi, Borghetti’s Virgin gained one-stop access to European cities whereas Qantas largely has to backtrack its passengers around London or Frankfurt. A few weeks prior Joyce said Virgin could not easily emulate Qantas’s network.

Nor could Virgin have a sizeable frequent flyer program, a lure for corporate travellers, Joyce reckoned. The Etihad partnership included reciprocal frequent flyer benefits.

The bigger gains undoubtedly went to Borghetti and Virgin, but Hogan and Etihad did not go away empty-handed. From next month Etihad will have double-daily flights out of Sydney (including codesharing on V Australia), an attractive schedule to the corporate market.

Etihad will codeshare with Pacific Blue across the Tasman to New Zealand, where Emirates already plies the market with a sizeable presence. Etihad also receives feeder traffic from around Australia, which Emirates lacks.

There was a hint of the two adding insult to injury. Etihad had a partnership with Qantas, which Borghetti brokered while he was at Qantas. Emirates meanwhile had a partnership with Virgin. Etihad’s Qantas and Virgin’s Emirates alliance ended in the wake of Virgin and Etihad tying up. The deal between second-place contenders left their first-place rivals empty.

“It’s perhaps quite ironic here we are today discussing this partnership,” Hogan says.

Ironic yes, and definitely the day the underdogs trumpeted. What will their friendship bring next?

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2 Responses to In Virgin Blue-Etihad alliance, it’s old friends re-united

  1. Mathew McBride February 2, 2011 at 11:19 pm #

    Is this the same James Hogan appointed CEO of Tesna? The Ansett check in desk story sounded very familiar :)

  2. Will Horton February 4, 2011 at 5:40 am #

    That would indeed be the same Mr. Hogan!

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