Godfrey’s Virgin Blues

The following article originally appeared in TravelWeekly Australia

Virgin Blue was once the underdog of the Australian airlines. Brett Godfrey, its outgoing chief executive, laid out the lessons he’s learnt from his nine years and detailed where he sees the airline heading in a recent speech. Justin Wastnage reports

Virgin Blue was once the underdog of the Australian airlines. Brett Godfrey, its
outgoing chief executive, laid out the lessons he’s learnt from his nine years and
detailed where he sees the airline heading in a recent speech. Justin Wastnage
reports
Fans of David versus Goliath tales often recount the history of the Japanese automotive industry. In the 1960s, their output of small,
affordable cars was derided as “Jap crap” but over time Japanese marques not only caught up with US and European manufacturers but
overtook them. Toyota’s Lexus is now the top selling luxury car in the US.
Brett Godfrey, the effusive chief executive of the Virgin Blue group, addressing the National Aviation Press Club in Sydney this month,
likened his own company to a tortoise, patiently plodding on its race against Qantas’s hare.
By some measures Virgin Blue has already overtaken its rival. “We now have more daily departures than any other airline in this market,” he
crowed.
Geoff Dixon, the former chief executive of Qantas group, used a swansong speech to outline some facts about the airline he was not at liberty
to discuss while at the helm of the national carrier. Godfrey, looser lipped at the best of times, set out his own vision for the future despite having
at least 15 months of his tenure left to run.
The business was written off by many when it launched in 2000, and many (chiefly Dixon, Godfrey says) have continued to predict its demise.
Yet the company is alive and well in 2009, a period which Godfrey calls “the most taxing, challenging, vexing and most unexpected 12 months in
my 22 years [of aviation experience]”.
The group launched its long haul arm V Australia at “possibly, in retrospect, the worst time” he says, but is predicting a profitable return in the
next financial year.
But the recession hasn’t been all bad news for Virgin Blue. Two recalcitrant markets, corporate and governmental, have been forced through
economic concerns to try the second carrier. The airline has added a frequent flyer program, lounges and premium economy in the past four
years as it has evolved into a full service carrier, but too many still perceived it as a low cost carrier, he bemoans. “They have now tried us and
our polls show most will come back,” he says.
A federal government tender is also up for renewal in November and is no longer looking like a shoo-in for Qantas, he adds.
Godfrey plainly admits that if the company had stuck to its no-frills model, it would no longer be Virgin Blue
around today. Its rival, “padded by international monopolies” would have had deep enough pockets to price it out of the market, he asserts. Now
V Australia is chasing new international routes to countries willing to open up their airports to a second Australian carrier. Hence V extending
its reach beyond the suddenly hotly-contested trans-Pacific to the predominantly leisure destinations of Bali and Phuket. South African services
from Melbourne will also be launched in time for the soccer world cup.
Another milestone in the airline’s internationalisation is its alliances with other carriers. At the press club lunch Godfrey signed a new interline
deal with Richard Jewsbury, Emirates’ senior vice president, commercial operations Far East and Australasia, for continuation of services over
the Tasman. Godfrey said the deal further underlined its plan to be
“aligned with a non-aligned carrier”. This, along with its yet-to be-approved joint venture with Delta Air Lines, was meant to scotch persistent
rumours that it was looking to join Star Alliance.
The next stage in the airline’s evolution is under wraps. The airline has a team looking at “the airline of the future” that will exist in a world
where “Star Alliance Sydney or Etihad Australia” may exist once trade barriers have further broken down.
The ultra-low cost airline subsidiary, an idea bandied around ever since Jetstar was launched, appears to have been ditched in favour of the
possible introduction of a “third class” cabin down the back of existing cabins.
Godfrey also pines for the day when his four brands (Pacific Blue and Polynesian Blue complete the line-up) are united under a single brand,
something that has eluded him in nine years due to territorial problems with the Virgin name.
The only thing to which Godfrey will commit is the demise of paper boarding cards, which will likely be replaced with two-dimensional
barcodes on mobile phones. Innovation and staying ahead of the game is his mantra. Without that, the company “risks ending up like Chrysler”,
once the strongest of the venerable Detroit trio of car makers, but now reduced to being a part-Italian owned government subsidised shadow of its former self, he says.
Backing Goliath, it seems, is not always the best option.