VS stock rises from Borghetti strategy

VS stock rises from Borghetti strategy
By admin


When John Borghetti took the reigns at Virgin Blue last year and set about transforming the carrier, his wasn’t the only airline whose image began to shift in the eyes of the travelling public.

Virgin Atlantic, saddled for years with the low cost image of its Australian namesake – or at least part namesake – also found its stock rising.

As Virgin Blue morphed from a no frills domestic airline into a full service quality operation with a comprehensive international network, so too did Virgin Atlantic undergo an image evolution in the local market.

“The impact [of John Borghetti’s overhaul] has been a positive one,” Virgin Atlantic Australia general manager Luke Fisher told Travel Today during a wide ranging interview in a North Sydney pub. “There’s a halo effect that has come with the changes.

“We’ve had situations in Australia where people haven’t understood what Virgin Atlantic is all about. They have said ‘do I have to pay for meals if I go to London’?

“In most markets we have been able to take the high ground but down here not quite as much because Australians have experienced Virgin Blue and associate the brand with a low cost carrier.”

Virgin Atlantic didn’t have to wait long for the transition to take effect. In fact, at the launch of Virgin Australia, John Borghetti told gathered dignitaries that “Virgin Australia has become like Virgin Atlantic”.

“That’s where the evolution of Virgin Australia has helped us and shifted people’s perceptions,” Fisher said. “John has done a phenomenal amount of work within 12 months. It’s pretty awesome.”

With Borghetti’s strategic approach to take on Qantas and build an international network through alliances has come a closer partnership with Virgin Atlantic.

Virgin Blue enjoyed a long standing relationship with its long haul counterpart on domestic Australian routes but that was extended last month to include codesharing on the daily Sydney to Hong Kong sector operated by the UK carrier.

“We are not like Qantas and British Airways, we don’t have authorisation from the Australian Competition and Consumer Commission to engage in joint scheduling or pricing,” Fisher said. “But virtually everything we can do in a commercial sense that benefits us both has been done. We are codesharing, we’re a big part of the Velocity program and hope to get more involved as that develops and competes with the Qantas Frequent Flyer club.

“Virgin Australia is building Velocity into a very viable product.”

Fisher predicted the HK codehare would provide “incremental, not transformational” business for Virgin Atlantic – “may be a couple of extra passengers a day” – but for Virgin Australia it will enable them to add a key Asia hub to their network, he said.

Email the Travel Weekly team at traveldesk@travelweekly.com.au

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