AustrAliA And oceAniA
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English entrepreneur Sir Richard Branson introduced his low-cost, no-frills airline, Virgin Blue, to the Australian public in 2000.
Virgin Blue Airlines
At the end of the 1990s the majority of scheduled airline services in Australia were operated by just two concerns, the national ‘flag carrier’ Qantas and Ansett Australia. However, by the beginning of the new millennium Sir Richard Branson, Chief Executive Officer of the Virgin Group, was determined to seize the opportunity to break the near monopoly held by the ‘big’ two. His new company, Virgin Blue, introduced the lowcost, no-frills, concept into the Australian market and it proved to be an instant success with the fare-paying public. He adopted a similar formula to that of the successful US carrier Southwest Airlines. By eliminating costs such as in-flight catering and the use of agents, selling tickets instead via the Internet, he was able to substantially reduce the price of seats.
Overview
Continent/Country Official Name Base Logo Founded in IATA Code ICAO Code IATA Number Call sign Base and Hubs Networks Personnel Alliances Website 2000 DJ VOZ 856 VIRGIN BLUE Brisbane Australia, New Zealand, Oceania 2200 Pacific Blue, Polynesian Blue, V Australia www.virginblue.com.au Australia Virgin Blue Airlines Pty Ltd Brisbane
Photo: Montague Smith, Perth
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Virgin Blue Fleet
Planned Current History Type
Date 12.09.2007 – Source: Aerotransport Data Bank (ATDB)
Sub Type
B777-300ER A320-200 A321-200 B737-300 B737-400 B737-700 B737-800 E170 E190
Average Age active fleet
n/a n/a n/a n/a n/a 5.1 years 3.3 years 0.0 year n/a 3.3 years
B777 A320 A321 B737 B737 B737 B737 E170/190 E170/190 Total
7 3 2 2 6 22 29 1 4 26 5 14 52 56 23 2 8
7 3 2 2 6 28 63 6 14 131
and Virgin Blue was chosen. It was Branson’s principal aim to be operational before the start of the 2000 Sydney Olympics. this he achieved, when the first services were launched, using two leased Boeing 737-400s, on the Brisbane-to-Sydney route on August 31, two weeks before the opening ceremony of the Games. two further routes from Brisbane to Melbourne and Adelaide were added shortly afterwards. three more B737-400s were introduced by the end of 2000, by which time Virgin Blue had already flown 630,000 passengers.
Total
Qantas reacts
the immediate success of Virgin Blue caused great excitement in the Australian aviation industry. Impulse Airlines, a regional operator since 1984, was the next to challenge Qantas and Ansett, by transforming itself into a low-cost carrier. An ailing Ansett found the competition too much and ceased trading in April 2001. Virgin Blue and Impulse were somewhat caught out by the tremendous demand for seats, having originally planned for a slow but steady growth. Almost overnight both found themselves struggling to keep up with the demand. By May 2001, Impulse had bowed under the pressure and its management sold the business to Qantas, under which it became Qantaslink. to meet the tremendous demand for seats as new routes were established, Virgin Blue acquired, though lease agreements and via direct purchases, a fleet of next-Generation B737-700s and -800s. By 2002, it had carried 3.2 million passengers and just a
the Virgin Blue vision
In December 1999, Branson’s ambitious plans were approved by the government in Canberra, and with a change in rules that enabled foreign ownership of Australian companies and property; the time was right to establish the new airline. Several cities competed for the privilege of hosting its headquarters, Brisbane eventually edging out both Melbourne and Sydney. the next question was: what were they going to call the new setup? A competition was run on a local Brisbane radio station,
A Boeing 737-8FE of Pacific Blue making an early morning landing at Perth airport. Both Pacific Blue and Virgin Blue are owned by the same holding company, and the aircraft of both carriers are used across each others' networks.
Photo: Montague Smith, Perth
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year later this had doubled to six million – and its market share increased to 30%. Qantas finally reacted by establishing its own low-cost operation, JetStar Airways, in May 2004, using the B717s it had inherited from Impulse. In 2002, Branson decided to sell 45.9% of his shares in the carrier to the Patrick Corporation, an Australian logistics conglomerate. He also raised capital by selling shares in the company on the Sydney Stock Exchange. He planned to use the money to start another airline to further compete with Qantas, as well as developing smaller domestic routes. However, his plans were interrupted in January 2005 when Patrick launched a bid to purchase overall control of the airline. It had reportedly been unhappy for sometime with the direction the company was taking. By the closure of the bid in March, it held a 62.4% controlling share, while the Virgin Group was left with just 25.6%. later in the year, toll Holdings made a hostile take-over bid for Patrick, which included its shares in Virgin Blue. Despite an Australian Competition and Consumer Commission decision to block the take-over initially, a revised bid was made in April 2006 and was accepted by all parties. Patrick was absorbed into toll on May 25, 2006, when it became the majority owner of the airline. On november 26, 2006, Virgin Blue Holdings announced an order for 20 Embraer E-Jets, three E170s and 11 E190s, plus options for six more. Five months later, it reinforced its confidence in its fleet expansion strategy based on the E-Jet by converting the six options into firm orders and placing a further order for three options plus 17 purchase rights. the aircraft will enhance the carrier’s ability to match more accurately seat capacity and frequency to passenger demand, and will form the backbone of Virgin Blue’s expansion. the new E190 will be certified for EtOPS (Extended-range twin-engine Operational Performance Standard) and will be the first in the E-Jet family to hold such a certificate. the first E170 was handed over to the airline on September 3, 2007, at the manufacturer’s São Jose dos Campos facility in Brazil.
the local carrier wanted to concentrate solely on its domestic services. In December 2004, it was announced that Virgin Blue (49%), the Samoan Government (49%) and an undisclosed Samoan shareholder (2%) had reached an agreement to form the low-cost airline Polynesian Blue. Services were launched on October 31, 2005 between Auckland and Apia, the Samoan capital. Since then the network has been further expanded to include routes to Rarotonga, tonga, Fiji and the Cook Islands. Virgin Blue and its three-year-old new Zealand subsidiary, Pacific Blue, announced on August 25, 2007, plans to introduce a domestic service linking all new Zealand’s major cities. From november 15, 2007, it was due to start flying on the key truck
routes of Auckland-Wellington, Auckland-Christchurch and Wellington-Christchurch. the decision to enter the domestic market was taken in response to strong support and lobbying from the new Zealand community, which wants the same service style and competitive fares which have proved so popular on the trans-tasman and South Pacific services.
V Australia
On July 27, 2007, in Sydney, Virgin Blue announced that competition on the trans-Pacific route had become a step closer. the company had received formal confirmation from Australia’s International Air Services Commission to operate
return non-stop services between Australia and the USA. though still subject to regulatory approval, this is a significant step towards launching the new service in late 2008. In a competition organised in conjunction with local radio station MIX FM, the new name for the carrier was chosen – ‘V Australia’. this is the fourth airline in the ever-increasing Virgin Blue Group portfolio. Initially it will offer flights between Australia’s east coast and the west coast of the USA, using B777-300ERs. Six B777-300ERs have been ordered, with a further six options, and the carrier will lease one additional B777-300ER to ensure that services start on time.
this Virgin Blue Boeing 737-7FE equipped with winglets was the 50th aircraft delivered to the carrier in July 2005.
Photo: Calixius Caspar Koh, Singapore
Pacific Blue and Polynesian Blue
In September 2003, Virgin Blue announced it was establishing new international routes between Australia and new Zealand. However, due to Singapore Airlines’ 49% ownership of Virgin Atlantic and its own extensive route network in the region, it would not allow the Virgin name to be used outside Australia, so a new name was adopted – Pacific Blue. Services between Brisbane and Christchurch, new Zealand, were launched on January 29, 2004, using two B737-800s. Flights to and from Auckland and Wellington soon followed. It is interesting to note that with the cheaper seat prices offered by Pacific Blue, both Qantas’ and Air new Zealand’s own fares soon became more competitive on these routes! While work on establishing Pacific Blue was going on, the company was also in discussions with the Samoan Government regarding taking over Polynesian Airlines’ international routes.
the joint venture between Virgin Blue and the island of Samoa has resulted in several aircraft being painted in Polynesian Blue livery.
Photo: Colin Hunter, Auckland