Comment from the January 2013 edition of Airline Business
The on-off spat between Richard Branson and whoever is running British Airways
at the time always makes for an amusing spectator sport.
This time, it is Willie Walsh, boss of BA parent International Airlines Group, who has ruffled the feathers of his jumper-wearing rival. His jibe about the likely disappearance of the Virgin Atlantic brand following December's tie-up with Delta Air Lines has provoked a feisty response from Branson in the form of a £1 million wager that it will still be around five years from now.
Walsh's view seems a little harsh. But it is perhaps wishful thinking on his part given the irritating amount of power those pesky Virgin Atlantic kids project at BA's fortress, Heathrow.
"If you look at the impact we've had on BA over the 28 years, they must groan every time we start a new route," Virgin's chief executive, Steve Ridgway, told Airline Business recently.
But Walsh's attitude comes as no surprise. Two years ago he told Airline Business that when he looked at Virgin all he saw were "slots at Heathrow". He added: "And I suspect that anybody looking at Virgin sees it that way, because if it is someone from within the industry then I don't see that they'll want to retain the Virgin brand, particularly a brand that is intrinsically linked to a personality."
Ridgway proudly points out that "there's not really another Virgin Atlantic anywhere in the world". And there's a reason for that: it has a business case that probably on paper should never have been sustainable. But that's before you take into account the spirit and sheer determination of its larger-than-life billionaire leader and his band of merry followers.
But Delta has landed on Virgin's doorstep at a crucial time, as Branson's airline was facing an isolated future at Heathrow. It is having to fend off the ever-greater threat from BA, which with its BMI acquisition has both boosted its already strong position at Heathrow and eliminated its rival's short-haul feed in one fell swoop.
Ridgway talks of the challenge for Virgin having never been greater than it was when it started out almost three decades ago. But in the face of diminishing feed, the battle ahead for an independent Virgin - albeit with a prestigious but disengaged shareholder in Singapore Airlines - looked like its toughest to date. While many viewed its decision to restore feed through the launch of short-haul routes as risky, some saw it as the last roll of the dice. So the reality is that Delta could be a life-saver, providing Branson with vital clout at a crucial time in the evolution of his long-running bout with BA.
Which brings us back to that old chestnut - the Virgin brand. Few doubt its strength or the role that the "personality attached" has played in establishing it. Perhaps that's why generations of BA senior executives have spent so much time trying to destroy it.
And sorry Willie, the signs are that Delta doesn't want to follow your script. As long as the suits from Atlanta keep their hands off that bit of the business, Delta's involvement will certainly strengthen Virgin's position. And it should also represent a better use of that 49% shareholding than the previous owner made of it.
The only outwardly visible co-operation between Virgin and SIA has been codeshares, and the relationship never extended to a helping hand into Star. Surely Delta will make sure that's not repeated at SkyTeam?
The tie-up will also dampen the euphoria around BA's newfound strength following the BMI deal. The prospect of such a strengthening in local competition will likely prompt IAG's lawyers to explore whether to challenge the joint venture. With Virgin's history of legal fights with BA, for once the boot will be on the other foot.
So given the struggle some aviation household names are having, perhaps Walsh should be casting his aspersions about disappearing brands in other directions right now.