Virgin Blue rebranded its short-haul operations Virgin Australia today (04-May-2011), with a new livery, brand and product as it takes the battle to its larger rival and increase its share of Australia’s corporate travel market (The Australian, 04-May-2011). Virgin Blue Group CEO John Borghetti and Virgin Group chairman Richard Branson unveiled a B737 and A330 at Sydney Airport, which carry the airline's new livery and the narrowbody aircraft version of its business class. Hans Hulsbosch, who has also worked extensively with Qantas, was responsible for the new branding, which will unite the fragmented branding of the company, which was split between Virgin Blue, Pacific Blue and Polynesian Blue, and make the airline more appealing to the higher yielding a less price elastic corporate market. The newly repainted aircraft in Sydney show the airline has dropped the red livery and opted for an all white design, with the tail carrying the Virgin logo on a white background.
Virgin Blue rebrands as Virgin Australia
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South Pacific aviation markets will be defined by China’s expansion
The nature of the South Pacific's geography makes finding the right partners for its airlines essential for their survival in international long haul markets – as most are.
The region is characterised by relatively liberal access regimes and by partnerships of varying levels – in New Zealand especially, where Air New Zealand’s international network is dominated by JVs. Virgin Australia has built a ‘virtual alliance’ alongside HNA, Singapore Airlines, Etihad and Delta, with very little of its own metal flying outside Australia. At Qantas Group, international performance has improved markedly following its Emirates partnership, as its operating focus has shifted from Europe toward Asia and North America, with local JVs, and close partnerships with American Airlines and China Eastern continuing to grow and mature.
For all airlines in the region, the China market will define much of the growth over the coming decade. (This report is taken from the Jul/Aug-2016 issue of CAPA's Airline Leader)
US DOT rejects Qantas-American Airlines joint venture under pressure of unchecked consolidation
After complaints about airlines amassing power through joint ventures to the detriment of consumers, the US DOT appears to be exerting greater and more conservative scrutiny on partnerships. DOT has rejected a proposed JV between American Airlines and Qantas. After DOT declined their request for a much longer response time American and Qantas withdrew their application, submitted in Jun-2015.
At a top level the JV does seem to raise concern: combined, Qantas and American would hold 59% of the US-Australia market. Yet almost all of that – 53% – is from Qantas; American adds only 6ppt.
DOT rejects the notion that such larger market share can possibly be in the interest of consumers. Yet it appears to overlook the benefit American might bring in exchange for incremental market share gains. Nor is it clear if this combination is more anti-competitive than some JVs where two airlines, each with a small- or medium-sized position, combine and become multiples larger. Qantas' 53% market share was earned through quality and smart loyalty programme development while competitors lagged.
Qantas will continue growth in North America, its most successful international market, but American Airlines' growth is uncertain and it may re-evaluate a supposedly planned Los Angeles-Melbourne 787 service.