Damon Mcknight
Virgin Australia, previously known as Virgin Blue, is an Australian airline that was founded in 2000. The name change from Virgin Blue to Virgin Australia occurred in 2011 as part of a rebranding effort. This rebranding was motivated by a desire to compete more directly with Qantas for business and corporate accounts, shifting from a hybrid product offering to a full-service model. Virgin Australia introduced domestic business class in 2011 and acquired Tiger Airways to compete with Qantas' low-cost subsidiary, Jetstar. The rebrand also included a new slogan, Now You're Flying, and an advertising campaign that showcased the airline's variety of products and on-time performance records.
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What You'll Learn
Virgin Blue's desire to compete with Qantas and Ansett
The collapse of Ansett Australia in 2001 presented an opportunity for Virgin Blue to rapidly grow and gain a significant market share. Virgin Blue quickly filled the vacuum left by Ansett, becoming Australia's second-largest domestic carrier. This growth was aided by access to landing slots that would not have been available if Ansett had still been operating.
Virgin Blue also sought to compete with Qantas by exploring codeshare agreements with other international airlines. In 2006, it established frequent flyer agreements with Emirates, Hawaiian Airlines, and Malaysia Airlines, positioning itself to better compete with Qantas for business and corporate customers.
In 2008, Virgin Blue introduced a premium economy class with larger seats, additional legroom, and enhanced benefits, a move aimed directly at attracting Qantas' business and corporate clientele.
The rebranding as Virgin Australia in 2011 was another strategic decision to move upmarket and compete more directly with Qantas. This included the introduction of business class, new wide-body aircraft, and a focus on attracting more business travellers with new onboard offerings and lounge facilities.
Virgin Australia's desire to compete with Qantas and, previously, Ansett, has been a driving force behind many of its strategic decisions, shaping the Australian aviation market.
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Virgin Blue's financial woes and the need to rebrand
Virgin Blue was launched in 2000 as a low-cost airline to compete with Qantas and Ansett in the Australian market. The airline was able to capitalise on the collapse of Ansett, but when other low-cost carriers entered the market, Virgin Blue decided to become a full-scale carrier and launched international routes.
However, this move towards a full-service offering put Virgin Blue in direct competition with Qantas, while it also faced pressure from lower-cost alternatives like Jetstar. Virgin Blue found itself in a difficult position, appealing to a shrinking customer base with its ''hybrid' product. This became the catalyst for the 'Game Change Program', which saw the airline rebrand as Virgin Australia in 2011.
The rebrand was accompanied by a new slogan, "Now you're flying", and a range of new offerings, including domestic business class and the acquisition of Tiger Airways. The airline also introduced new liveries, uniforms, and onboard services.
Prior to the rebrand, Virgin Blue had faced other challenges, including a hostile takeover attempt by logistics conglomerate Patrick Corporation in 2005, and the impact of the 2008 Global Financial Crisis, which saw Virgin Blue's profits decline.
The rebrand as Virgin Australia was an attempt to revitalise the airline and compete more effectively in the Australian market, offering both full-service and low-cost options to cater to a wider range of customers.
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The Game Change Program
The 'Game Change Program' was implemented by Virgin Blue as a response to the company's shrinking customer base. The program was designed to move the company upmarket, with a rebrand to Virgin Australia, to compete with Qantas for business and corporate accounts.
The first step of the program was to introduce a domestic business class, which was launched in 2011. This was a significant move for the company, as it had previously been a low-cost airline, with a hybrid product that was struggling to compete with Qantas and Jetstar. Virgin Australia's new business class offering was designed to capture the corporate market, and the company also acquired Tiger Airways for $1 to compete directly with Jetstar and create a dual-branded strategy.
The rebrand to Virgin Australia was a gradual process, with the company making changes one step at a time. This included new aircraft liveries and sponsorship deals, such as with the South Sydney Rabbitohs NRL team, which saw slight changes to the livery of one of their Boeing 737-800s. The company also faced some challenges, including a fine in 2011 for breaking anti-spamming regulations and criticism for its policy of not allowing male passengers to sit next to unaccompanied children.
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Virgin Blue's sponsorship deals
Virgin Blue has sponsored many sports teams to promote its brand since its inception. In February 2007, Virgin Blue signed a two-year sponsorship deal with the NRL team, the South Sydney Rabbitohs, the first rugby league team Virgin Australia sponsored. To commemorate this sponsorship, the Australian flag held by the "Virgin Girl" on one of their Boeing 737-800s was replaced by the Rabbitohs' flag. Virgin Australia is also the official sponsor of the National Basketball League (NBL) and the title sponsor of the Brisbane Bullets.
In November 2010, Virgin Blue secured a deal with the Australian Football League (AFL), which decided not to renew its marketing contract with Qantas, choosing Virgin Blue instead for a deal worth A$5–8 million. Virgin Blue generated extra revenue and publicity by painting two aircraft as "flying billboards". Virgin Australia also became a sponsor of the AFL clubs, the Gold Coast Suns in 2011 and the Greater Western Sydney Giants in 2014.
Virgin Australia has been the official wish-granting partner of the Starlight Children's Charity since 2010, helping to facilitate over 3,000 travel wishes for sick children. In 2011, Virgin Blue signed a ten-year deal with Skywest Airlines, a Perth-based regional airline, to better compete in east coast regional markets served by QantasLink and Regional Express Airlines. The same year, the Australian Competition and Consumer Commission (ACCC) approved a proposed code-share alliance between Singapore Airlines and Virgin Australia.
Virgin Blue's initial business model was a hybrid product, appealing to a shrinking customer base. This became the catalyst for the 'Game Change Program', which saw the airline move upmarket under a rebranded Virgin Australia to compete directly with Qantas for business and corporate accounts. Virgin Australia introduced domestic business class in 2011, one of its first moves to capture the corporate market.
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Virgin Blue's use of the code DJ
Virgin Blue's use of the code "DJ" has sparked curiosity among many, who wonder why the airline chose this code instead of something more obvious like "VB". One theory suggests that "VB" was already in use by a UK operator, and possibly a Mexican operator as well, so Virgin Blue had to opt for a different code.
The choice of "DJ" as the alternative may have been influenced by Virgin's desire to create a trendy and dynamic image. "DJ" could be interpreted as a playful reference to "Disc Jockey", reflecting the Virgin Group's ties to the music and entertainment industry during Virgin Blue's early days in the late 1990s. It is said that the project name for the new airline was "Disco", aligning with the idea of creating a fun and vibrant brand. Additionally, "DJ" has a cool and party-like vibe to it, which might have been a contributing factor in its selection.
The "DJ" code has been a part of Virgin Blue's identity since its first flight, DJ214, on August 31, 2000, from Brisbane to Sydney. Virgin Blue's transformation over the years, from "Low Cost" to "New World Carrier" and eventually to Virgin Australia, marked a significant evolution in the airline's journey. On January 11, 2013, Virgin Australia bid farewell to the "DJ" flight code, transitioning to the single code "VA" for all flights, marking the end of an era and the final link to the old Virgin Blue.
The change to "VA" as the unified code for Virgin Australia was accompanied by a shift in the reservation system. Virgin Australia adopted SabreSonic to manage flight reservations, inventory, and check-in processes, replacing the previous system predominantly used by low-cost carriers for "DJ" coded flights. This transition symbolised the airline's progression from its early days as Virgin Blue to the full-service carrier, Virgin Australia.
While the "DJ" code may have been a creative choice, it's important to note that the process of assigning IATA codes is not entirely clear. Airlines seem to navigate the availability of codes and select the best option, often resulting in a mix of intuitive and less intuitive combinations.
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Frequently asked questions
Virgin Blue wanted to move upmarket and compete directly with Qantas for business and corporate accounts.
Virgin Blue was sandwiched between Qantas's full-service offering and Jetstar's low-cost alternative, with their ‘hybrid’ product appealing to a shrinking customer base.
Virgin Australia introduced domestic Business Class in 2011 and acquired Tiger Airways for $1 to compete with Jetstar and create a dual-branded strategy for the Virgin Australia Group.
Virgin Australia became a sponsor of the newest AFL clubs, the Gold Coast Suns and Greater Western Sydney Giants, in 2011 and 2014 respectively.
Virgin Blue was growing and making profits, unlike the full-service Virgin that collapsed, which was only profitable in 1 of its last 6 years.
