Re-birth of the Virgin Blue brand – will it work?

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Virgin Blue, after fighting hard as a “renegade” brand for a slice of the Australian carrier market is tipped to undergo a marketing face lift and re-invent itself as a full service brand. Some of the purported changes include the introduction of a new business class product, integrating the other brand properties (Polynesian Blue and V Australia) as well as the introduction of wide body aircraft on trunk routes between capitals.

(Image credit: ABC News)

Virgin Blue going upscale?

It is apparent from the changes the new CEO, Ex Qantas Senior exec John Borghetti is primarily going after the lucrative corporate segment of the market, one which Virgin Blue has traditionally struggled to break into due to Qantas’ having a strong and loyal customer base.

The biggest hurdle here will be to ramp up the company’s loyalty programs to make them attractive to corporate clients. The easiest way Virgin could do this besides upgrading it lounge system is to integrate with a global airline alliance, such as SkyTeam or Star Alliance, to boost its loyalty offering and expand code share operations.

It’s not going to be easy to attract new the new corporate business without impacting the most loyal customers who were attracted to the “renegade” brand. The shift away from competing head to head with other low cost carriers such as Tiger and Jet Star will surely allow it to focus more on its new customer acquisition path and deliver a more differentiated product. However it’s a delicate balance between attracting a new segment and not turning away the loyal customer base who share an affinity with the current culture and image.

Virgin Australia Airlines?

The other issue facing Virgin’s re-birth is the long-standing agreement between Virgin Atlantic Airways and significant shareholder Singapore Airlines prohibiting it from using the Virgin moniker for international flights.

I’d hasten to say the use of Virgin Australia Airlines, which was registered several years before the 2008 launch of V Australia will be the primary candidate to encompass all 3 brands.

Mr Borghetti has also recently swept the brands senior leadership team under the one reporting structure, not only implementing a few commercial side changes but also positioning Martin Daley as Product and Guest Services lead across the single carrier brand. Martin was one of the early Virgin Blue culture “creators” and will be integral to ensuring a consistent and on brand culture across all brand properties.

Finally, rationalisation of loss making routes across brands should also be on the cards as part of the marketing change out with yield being a primary focus of V Australia. A focus on greater diligence on revenue generation across the house of brands will be imperative once it becomes a branded house to ensure one branch of its network does not impact another’s profitability.

With most of the changes to come in before the end of the year, do you believe they can shake the low cost carrier moniker, bring the brands together and attract one of the most loyal market segments away from Qantas? Sounds like a big task, so let’s wish them all the best. And watch this space.