Will Virgin Blue make a comeback?

Virgin Blue, the Southwest Airlines of Australia. The airline operated between 2000 and 2012 before being replaced by Virgin Australia, a cash strapped airline that has been put into administration and has already begged the Australian Government for cash. The airline looks weak and bidders have been lining up in an effort to avoid another Qantas monopoly but what happens when the head of the frontrunners is a low-cost carrier expert?

Indigo Partners, the American private equity firm is one of the frontrunners to buy up Virgin Australia after it fell into administration due to lack of funds. There are four bidders but it has to be argued that Indigo is the most convincing of the four, the airline’s co-founder Bill Finke is the chairman of both Frontier and Wizz Air which are some of the best low-cost airlines in the industry. Finke was previously chairman of Singapore’s Tigerair and Spirit in the 2000s, it’s fair to say he has an impressive rap sheet. Indigo has already tried in the Australian market, teaming up with local businesses in an attempt to buy out the ill-fated Ansett which collapsed in 2001 leaving Virgin to fill its shoes. It’s an eerie reminder from almost 20 years ago and proves the volatility of the market down under. With the level of success with Indigo’s low-cost airline holdings, it’s hard to see how Virgin would be any different, Finke hasn’t ruled out anything saying: I get asked all the time, are you going to keep international flying, are you going to become an ultra-low-cost carrier and the answer to that is: you’re going to have to fit yourself to the market and what the market wants. We have not made that analysis yet. We have to look at the Australian market in terms of what the consumer wants in the product.” So what would Virgin Blue 2.0 look like?

Virgin Blue was fun, that was its brand. Its low-cost image worked well and attracted budget travellers to move around the country and the Pacific. Even their name was fun “Blue” or “Bluey” means redhead in Aussie slang which explains their livery. Virgin 2.0 might not go back to the old name or livery but old could become new in other areas. Their paid seatback was known as “Live2Air” could become a paid BYO service (it’s free currently), no free snacks or drinks, Premium Economy, cheaper fares, a more simplified fleet and more relaxed and fun crew culture could become the norm. It’s also part of another bidders plan, Bain a Boston based company has said that they want to “bring the best part of Virgin Blue back” and become the airline “for all Australians”. So what about if we had a monopoly?

Qantas, the flying kangaroo is Australia’s flag carrier. They helped Aussies get home during this difficult time and have been a valuable asset to the country since they were founded a century ago. But should we trust them to not raise prices if a monopoly were to occur? No, definitely not, because they already have. Let’s take a flight from Sydney to Adelaide, it costs $219 to fly next year but would normally only cost $150 or so, truly The Spirit of Greed.

So what do we conclude from this? I conclude that Qantas can’t be trusted, Virgin Blue might make a return and it seems as though bidders are making every effort to snap the troubled airline up. With the confidence growing that Virgin will return it seems as though REX has gone quiet, strange that…


More fun and less business?


Will the champagne fly again? image credit

7 Likes

That would be kinda cool

A lot of effort nice post man!

2 Likes

Nice post! Would be good to see them comeback I liked them a lot

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