The second decade of Virgin Blue's operation will see the airline re-brand as "Virgin Australia" to help shed its low-cost image in favour of being a formidable challenger to Qantas in the high-yield corporate market.
The long-expected name change will be announced at Sydney airport on 4 May by Virgin Group founder Sir Richard Branson and Virgin Australia chief executive John Borghetti with a re-branded Airbus A330-200 and Boeing 737-800. A330 VH-XFB has given the livery an early release as it was spotted departing Subang, Malaysia earlier this morning after being painted.
The livery, designed by former Qantas livery designer Hans Hulsbosch, features a Flying Lady mascot in silver with medium-sized purple billboard titles in the same typeface as Virgin Atlantic. The carrier has opted for the large hand-wrritten Virgin logo to be featured diagonally with a silver shadow on a white silver tail instead of a red tail featured by other Virgin Group airlines--and Qantas.
The Virgin Australia name will only apply to the carrier's domestic network. Short-haul international subsidiary Pacific Blue is expected to adopt V Australia's branding while the re-branding exercise outcome of Polynesian Blue, a joint venture between Virgin and the Samoan government, is awaiting confirmation.
This was not the single-brand rationalisation airline founder and former chief executive Brett Godfrey mooted in 2009, but an outcome Borghetti had hinted at over the past few months.
The main impediment, industry sources say, for a single-brand operation is Singapore Airlines' veto power over using the "Virgin"
name internationally, a right it obtained with its purchase in 2000 of 49% of Virgin Atlantic. Additionally, Singapore Airlines has lobbied the Australian government for trans-Pacific traffic rights, and more recently has seen Virgin discuss Asian expansion plans.
Still, Virgin reckons the new name will better represent its renewed push into the Qantas-dominated corporate market. Borghetti argues Virgin's exposure to the leisure market makes it "more sensitive to macro economic fluctuations than the business market[that] provides a greater source of profitability but also lower volatility of our revenue line."
Virgin progressed from its 31 August 2000 low-cost, no-frills launch to a "new world carrier" that maintained a low-cost base while offering premium economy and other benefits that helped it attain a 12% corporate market share. Borghetti wants to increase its share to 20%, saying "For every percentage point we win of market share in the corporate market, our corporate business yields go up by about 1%."
Analysts are closely watching the costly short-term changes the airline is implementing for a long-term payback. On 26 May the carrier will introduce its business class product on Airbus A330 services on the trunk route between Sydney and Perth, giving Australia an alternative business airline for the first time since Ansett's 2001 collapse.
"Business travellers tell me that they want more competition. They are crying out for it. They face competition in the environments they operate in, and they know it compels them to strive to do better,"
Business class will be progressively rolled out across the carrier's narrowbody fleet starting this year. It is also in the process of revamping its lounges, frequent flyer programme, and fare structure to better attract the corporate market. Virgin Australia is also targeting the country's high-yield regional and fly-in fly-out networks with its new joint-venture with Australian regional operator Skywest.
Qantas has recently responded to Virgin's developments by deploying additional widebody aircraft on trunk routes, boosting its regional network, adding frequent flyer lounges, and dropping its San Francisco route in favour of a service to oneworld partner American Airlines'
hub at Dallas, which offers Qantas a larger codeshare network.
Although long seen as a fitting name for the Virgin Group's geographical branding inclinations, "Virgin Australia" was a registered Australian company selling seemingly unrelated novelty bookmarks. Virgin took the company to court last November and in late February won the name and website registration rights. The lawsuit delayed the re-branding, which sources familiar with the situation say the carrier wanted to unveil in February.
Last month the Virgin Group submitted the Virgin Australia logo for trademarking while Virgin Blue filed paperwork to change its name to Virgin Australia, as reported on Flightglobal blog Wings Down Under.
The Virgin Group is Virgin Australia's largest shareholder with a 26% stake.