Branson Seeks to Avoid Bumpy Ride for Virgin Atlantic


The Richard Branson brand empire called Virgin has been called (OK, by us) “the elastic brand.” The iconoclastic Branson has generally followed an informal strategy that goes something like, “If it appeals to me, I’ll build a business around it.” To his credit, as he has expanded (and licensed) the Virgin brand across a staggering array of businesses, Branson has had more hits than misses.

The core of Virgin has always been Virgin Atlantic, the upstart airline that challenged staid British Airways, won an acrimonious public battle, and became one of Europe’s leading air carriers. But even the high-flying Virgin Atlantic cannot continue to battle adverse business conditions.

Fiercely independent, Virgin Atlantic is finally realizing it needs strategic partners. British Airways remains a formidable competitor, especially in light of its cooperative venture with American Airlines. That’s why Branson is seriously considering joining an airline alliance. In recent years, an alliance has become a technique airlines use to share codes and routes in an effort to get fliers to consolidate their travel with a small group of carriers.

But with typical Branson bravado, Sir Richard is not just looking for an alliance with the largest number of participants.[more]

“Virgin already has the branding around the world and that’s getting stronger,” Branson said. “So no need to have the biggest grouping. But we do think it should have a grouping that brings strength.” Bloomberg reports that Virgin is due to decide on its strategic partner by the next quarter.

In the meantime, the airline has struck a deal with another iconic airline brand, JetBlue. The two airlines will work together to offer travelers using Virgin Atlantic’s three airports in the UK the ability to connect through JetBlue’s four U.S. cities — Boston, New York, Orlando, and Washington — to points across the U.S. and to Puerto Rico. Passengers will be able to book a single itinerary using Virgin Atlantic and JetBlue flights as if they are one airline. This will allow one-stop ticketing and single baggage check-in. Scott Resnick, director of airline partnerships for JetBlue, told Heathrow Skyport, “With its focus on cultivating a distinctive brand and creating a customer experience that travelers prefer, Virgin Atlantic shares a similar philosophy with JetBlue.”

But there are a few more bumps Virgin Atlantic will have to face. The airline may soon experience its first-ever pilot strike. Balloting is taking place now for a potential strike by June 21. The dispute centers around the fact that Virgin Atlantic pilots have not received an increase in pay since 2008. Irish airline Aer Lingus is in the midst of a pilot strike that is currently affecting operations.

Despite this distraction, Virgin Atlantic is maintaining its emphasis on customer relations by taking the unconventional step of handing out survey postcards to passengers. The survey asks passengers to comment on aviation taxes in an effort to thwart a possible government-proposed increase. Virgin said it would submit its passengers’ views to the Treasury, which is soliciting input from the air travel industry.

The challenges surrounding Virgin Atlantic aren’t stopping Branson from pushing ahead with his latest travel industry adventure, however — the expansion of Virgin Hotels. Travelers who use Virgin Atlantic’s Clubhouse lounge at Heathrow Airport may be getting a sneak peek at some of what the new hotels may eventually offer.

Branson hinted in January that the Clubhouse lounge suggests what he is “trying to achieve” with Virgin Hotels. Barbara De Lollis of USA Today made a visit and observed that “the expansive, stylish lounge is a virtual playground for adults, with some cool things — even hanging chairs — that kids enjoy, too. Its lucky occupants enjoy freebies wherever they turn from shoe shines to giant jars of candy to gourmet meals.”

Leave it to Branson to appeal to the kid in everyone.