Virgin Australia, the trading name of Virgin Australia Airlines Pty Ltd, is an Australian-based airline. It is the largest airline by fleet size to use the Virgin brand. It commenced services on 31 August 2000 as Virgin Blue, with two aircraft on a single route. It suddenly found itself as a major airline in Australia's domestic market after the collapse of Ansett Australia in September 2001. The airline has since grown to directly serve 32 cities in Australia, from hubs in Brisbane, Melbourne and Sydney.
The airline's headquarters is based in South Bank, Queensland. It was co-founded by British businessman Richard Branson (the founder of Virgin Group) and former CEO Brett Godfrey.
In 2011, the airline went through a massive transformation—the changing of its brand to Virgin Australia. This included the introduction of a new aircraft livery, new uniforms, and new onboard menu options as well as a business class product which Virgin Blue did not have. New wide-body aircraft were acquired for use to compete with Qantas, and the roll-out of business class across all the Virgin Australia network.
On 21 April 2020, Virgin Australia Holdings went into voluntary administration, due to the impacts of the COVID-19 pandemic and financial troubles in the years leading up to the pandemic. On 26 June 2020, it was announced that Bain Capital had entered into a sale and implementation deed with administrator Deloitte to acquire Virgin Australia. Creditors agreed to this proposal on 4 September 2020, with the reorganisation and change of ownership completed on 17 November 2020.
Virgin Australia was launched as Virgin Blue, as a low-cost airline in August 2000, with two Boeing 737-400 aircraft, one of which was leased from then-sister airline Virgin Express. Initially offering seven return flights a day between Brisbane and Sydney, this has since been expanded to cover all major Australian cities and many holiday destinations. The Virgin Blue name was the result of an open competition; it was a play on the predominantly red livery and the Australian slang tradition of calling a red-headed male 'Blue' or 'Bluey'.
The timing of Virgin Blue's entry into the Australian market was fortunate as it was able to fill the vacuum created by the failure of Ansett Australia in September 2001. Ansett's failure allowed Virgin to grow rapidly to become Australia's second domestic carrier, rather than staying just a cut-price alternative to the established players. It also gave Virgin access to terminal space without which growth would have been significantly limited. Delays in negotiating access to the former Ansett terminal at Sydney Airport however, forced Virgin to use its original terminal there—a collection of prefabricated buildings without aerobridges—longer than was needed. As the airline grew, it acquired new equipment, enabling it to phase-out its older 737-400s in favour of 737-700 and −800 series aircraft with modern glass cockpits, winglets and greater fuel efficiency.
Virgin Group's holding in Virgin Australia has since been reduced, initially via a sale of a half interest to Australian logistics conglomerate Patrick Corporation, and later by a public float. In early 2005 Patrick launched a hostile takeover for Virgin Blue. Patrick had been unhappy for some time with the company's direction. By the closure of the offer, Patrick held 62% of the company, giving it control. Virgin Group retains a 25% share.
In May 2006 Toll Holdings acquired Patrick and became the majority owner of Virgin Blue. In July 2008 Toll sold its majority holding via a special dividend to hold 1.7% of the company. In June 2013 Air New Zealand owned 23% of the company.
Virgin Blue previously used a familiar formula pioneered by airlines such as Southwest Airlines and Ryanair of eliminating costs such as included in-flight meals and printed tickets in favour of selling food on-board and using telephone and internet booking systems. It also cut costs in the past by limiting the number of airports serviced and by operating one type of aircraft, the Boeing 737. This strategy changed with the introduction of a second type into the fleet. The airline ordered 20 Embraer E-jets, in a mix of six E170s and 14 E190s. These were ordered specifically so that the airline could re-enter the Sydney–Canberra market that it abandoned in 2004, and to fly to less populous areas. The first E-170 arrived in Australia in September 2007 and by the end of the year the three on initial order had been delivered. These were placed on limited-frequency services before full-scale operations were launched on 4 February 2008 with services from Sydney to Canberra (branded as 'Capital Jet' services), Mackay in Queensland, and the New South Wales regional centres of Port Macquarie and Albury, which were promoted with a one-cent fare. The flights to Canberra and the regional centres signified an effort to compete more directly with Qantas and its subsidiary QantasLink operation, which flies to all three cities, and with independent Regional Express Airlines.
At its inception in 2000, Virgin Blue did not have interline or marketing alliances with other airlines. However, after the collapse of its domestic competitor Ansett Australia, it began a codeshare agreement with United Airlines. This allowed United customers to fly from the United States to any of Virgin Blue's Australian destinations that United did not already serve. In 2006, in an effort to compete with Qantas, Virgin Blue started exploring these relationships, forming frequent flyer agreements with Emirates, Hawaiian Airlines and Malaysia Airlines. Virgin Blue also has an Interline Agreement with Regional Express Airlines for travellers to and from smaller regional centres in the eastern states of Australia, and operates its own two routes with Virgin Australia Regional Airlines in Western Australia. In November 2007, the airline announced an agreement with Garuda Indonesia, offering easy transfer from a domestic Virgin Blue flight to an international Garuda Indonesia service departing from Perth, Melbourne, Sydney or Darwin. Since then Virgin Blue also announced an agreement with Vietnam Airlines which allows passengers to fly from Melbourne and Sydney and connect with Vietnam Airlines' destinations through its flight network.
In 2008, premium economy class was introduced throughout its entire fleet. New seating was installed in the first three rows of the cabin. These could be converted from three seats in economy configuration to two seats for premium economy. The premium product offered priority check-in, larger baggage allowance, lounge access, priority boarding, increased legroom and all-inclusive in flight entertainment, meals and beverages on board. The product was aimed at business and corporate customers. The airline began charging economy-class passengers for checked baggage in September 2008. The airline further announced its intention to operate Airbus A330 aircraft between Perth and the East Coast, starting in May 2011.
In December 2010, Virgin Blue entered into alliances with Etihad Airways and Air New Zealand for code-sharing, reciprocal lounge and frequent flyer access and other co-operational projects. Virgin Blue also entered into talks with Delta Air Lines about the possibility of joining SkyTeam, one of the top three alliances in the world, as V Australia and Delta sought approval for an agreement between the two airlines to co-operate on trans-Pacific services. The agreement was rejected by the United States Department of Transportation under United States antitrust law. Upon review the agreement was approved by the United States Department of Transportation on 10 June 2011.
On 20 January 2011, Air New Zealand announced it would take a shareholding stake of between 10% and 14.99% in Virgin Blue. Air New Zealand chief executive Rob Fyfe described the investment "as part of Air New Zealand's strategy to develop scale and reach in this region" but said the airline had no intention of making a full takeover.
In early 2006, Virgin Blue announced its intention to operate up to seven flights a week to the U.S. through either Los Angeles or San Francisco. At the time, only Qantas and United Airlines competed in the Australia-US transpacific market. The airline was given permission for ten flights a week to the U.S. by Australian regulators on 24 July 2007. The plans were approved by US regulators on 15 February 2008, due to the signing of an open skies agreement between Australia and the US. Instead of using its existing brand, Virgin Blue launched a fully owned subsidiary with a separate Air Operator's Certificate, named V Australia as the result of a public naming competition, with a fleet of five specifically branded 777-300ERs.
The airline launched flights between Sydney and Los Angeles in 2009, followed by flights from Melbourne and Brisbane since obtaining permission to operate an unlimited number of flights between Australia and the U.S. by the Australian International Air Services Commission. V Australia also applied to the United States Department of Transportation to operate services to San Francisco, Seattle, Las Vegas, and New York, but these plans never materialised. V Australia later launched flights to Nadi International Airport, Phuket and Johannesburg (all of which were discontinued prior to the brand being absorbed into Virgin Australia, although Virgin Australia continued to operate to Phuket until 2015, and still operates to Nadi), and Abu Dhabi to consolidate Virgin Blue's codeshare agreement with Etihad Airways.
On 7 May 2010, Brett Godfrey officially stepped down as Virgin Blue CEO after steering the company through its first 10 years. John Borghetti, former Qantas executive general manager, took over as the new Chief Executive. Following Borghetti's arrival as CEO, a number of key Qantas staff moved to Virgin Blue while key Virgin Blue staff departed the airline. causing much speculation regarding a forthcoming rebrand or reorganisation of the airline. In February 2011, the re-brand was confirmed when the airline announced that the word 'Blue' would be dropped from its name as part of a campaign to attract more business travellers away from rival Qantas. This came shortly after the unveiling of new crew uniforms and business-class seats. The airline stated that the re-brand would proceed in stages and would reportedly include a new fleet livery and the renaming of the other Virgin Blue Group airlines as well.
On 4 May 2011, the former Virgin Blue revealed its new name, Virgin Australia, as well as its new livery. In addition to the new name, branding and livery, the airline also showed off its new flagship the Airbus A330 with new domestic business class. Boeing 737 business class seating was also revealed, to be introduced on all of Virgin's jet aircraft by the end of 2011. Pacific Blue and V Australia were both folded into the new Virgin Australia brand, following an agreement with former Virgin Atlantic shareholder Singapore Airlines, which ever since the establishment of Virgin Blue in 2000 had previously prohibited use of the Virgin brand outside Australia.
Early in 2011 it was announced that Virgin Blue had signed a ten-year deal with Perth-based regional airline Skywest Airlines, for Skywest to operate up to 18 ATR-72turboprop aircraft leased by Virgin, in order to better compete in east coast regional markets served by QantasLink and Regional Express Airlines. The turboprops would supplement the existing Embraer E-190s and replace the E-170s, which would be phased out due to their being uneconomical on the routes operated by Virgin.
In October 2011, the Australian Competition and Consumer Commission (ACCC) approved a proposed code-share alliance between Singapore Airlines and Virgin Australia, subject to other regulatory approvals in both countries.
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