Virgin wins stalemate over brand name rights
Happy days . . . John Borghett, left, and Richard Branson at Sydney Airport yesterday. Photo: Peter Rae
VIRGIN BLUE has finally overcome a decade-long roadblock that stymied its wider aspirations after gaining the right to use the ''Virgin'' moniker on its aircraft which fly international routes.
Australia's second-largest airline has united its domestic and international operations under the brand name Virgin Australia. The renaming of Pacific Blue and its fledging long-haul offshoot, V Australia, will help the company gain passengers in overseas markets, such as the US where it has lacked brand awareness.
The change to Virgin Australia also reflects a slightly more conservative approach to its branding as it attempts to snare a bigger share of the lucrative corporate market from Qantas. Apart from ditching the ''Blue'', it has decided to drop the red body paint from its aircraft in favour of white.
The airline plans to install premium cabins on its fleet before the end of next year. However, the majority of its Boeing 737 aircraft - the mainstay of its fleet - will be reconfigured by the end of this year.
''What we have to get across is that Virgin Australia is going to be very similar to Virgin Atlantic going forward,'' said Richard Branson, the largest shareholder in the Australian airline.
The use of the ''Virgin'' moniker resolves a long-running impasse over a complicated licensing agreement. Under the deal, Singapore Airlines and Sir Richard - the two shareholders of Virgin Atlantic - had the right of veto over the use of the moniker on international flights.
Sir Richard said the new management teams at both Singapore Airlines and the Australian airline had made it easier to resolve the impasse. ''Both sides felt it made sense. I don't think it was that difficult but John [Borghetti, the Virgin Blue chief executive] and the people at Singapore Airlines reached an agreement because they were both on the same page,'' he said.
Sir Richard declined to reveal more details but did admit that Singapore Airlines and Virgin Atlantic would gain royalties from the Virgin moniker on the Australian airline's international flights.
One of the challenges for Australian airline had been to emphasise to travellers that its four brands were one and the same. The airline will still need to enter negotiations with a joint-venture partner, the Samoan government, to rename its offshoot Polynesian Blue.
The rebranding comes as the Australian airline confronts some of the toughest market conditions since it was launched in August 2000. It warned about a month ago that its losses will hit as much as $150 million in the second half due to natural disasters, high fuel prices and weak consumer spending.
Mr Borghetti said it was beginning to experience an improvement in leisure traffic but it remained difficult. ''Conversely, at the corporate end they have hardly missed a beat … and that is why we want more,'' he said, in reference to its aim of snaring 20 per cent of the corporate travel market.