Sir Richard Branson and Brett Godfrey are a force to be reckoned with in the Australian airline industry. As Joanne McCulloch finds, they’re just getting started.

Virgin Vitals

• Virgin Blue’s shares have fallen more than 50c since April, but are still trading at around $2.20 - well above the $1.60 range they fetched this time last year.

• Virgin Blue, in conjunction with Pay-TV provider Foxtel, recently introduced the first live streaming television programming in Australian airline history.

• Rising fuel costs cut Virgin Blue’s profit by 8.5 per cent to $68.2m in the first half of the year. Godfrey said there was no end in sight to the problem.

• Virgin recently launched a new cruise website, offering deals with partners such as Captain Cook Cruises, P&O, Princess, Royal Caribbean and Norwegian Cruise Lines.
 

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Blue Sky Mine

Sir Richard Branson and Brett Godfrey are a force to be reckoned with in the Australian airline industry. As Joanne McCulloch finds, they’re just getting started.

 

 

Blue Sky Mine

Richard Branson & Brett Godfrey - Blue Sky MineSIR Richard Branson is becoming Qantas’ worst nightmare. The British entrepreneur first took on the Aussie airline seven years ago when he launched Virgin Blue. Then a couple of months ago he announced plans to launch a new Trans Pacific airline called V Australia to snatch Qantas’ US market. Now he’s grabbing a piece of the burgeoning Asia Pacific airline market too.

Branson has snapped up a 20 per cent stake in the new Malaysian budget carrier, AirAsia X as part of his expanding airline repertoire. The news comes as a further blow to Qantas, which relies on its long-haul business to destinations like Asia, the UK and US. 

He claims he will spend “whatever is necessary” to make the no-frills carrier profitable. And if the ‘Flying Kangaroo’ isn’t worried, perhaps it should be. AirAsia X plans to launch flights from Malaysia to the Gold Coast from next month for as little as $26 return. The long-haul airline is also planning on covering the lucrative and underserviced Australia to London route, as well as China, India and even the US.

Branson, who owns a 25 per cent stake in Virgin Blue alongside majority owner Toll Holdings, is keen to expand the Virgin brand in Australian aviation. Virgin Blue chief executive Brett Godfrey tells Wealth Creator that the duo’s plans will once again challenge the Qantas stronghold. “In reality, the aviation sector in Australia changed dramatically for the first time seven years ago when Virgin Blue  first launched as the first low cost carrier to be seen in this part of the world,” he says. “Until then, it was a duopolistic environment with two legacy carriers operating side by side, charging the same fares, offering the same levels of service and flying on the same routes. 

“So it wasn’t surprising that the exorbitant air fares ostracised the majority of Aussies from travelling often, or in many cases, travelling at all. With the introduction of competition and diversity, the existing players also saw fit to review their own strategies and offer more palatable fares for the travelling public.”

Read the full article in the current issue of Wealth Creator with Richard Branson on the front cover. Out Now!