Associated Press
Brandon Wants in on U.S. Airline Business
Wednesday July 16, 8:36 pm ET
Virgin Group's Branson Hopes to Enter Low-Cost Airline Business in United States
LONDON (AP) -- Virgin Group chief Sir Richard Branson said Wednesday he hopes to enter the low-cost airline business in the United States.
Branson, whose Virgin Atlantic Airways flies trans-Atlantic, said he hoped to take a 49 percent financial share in a new low-cost carrier with a 15- to 20-plane fleet in the first half of 2004. It would not operate under the Virgin brand, he said.
Notice the last sentence. Without the Virgin brand, the new 'American Virgin' will simply be a new LCC with 49% of the investment coming from Branson.
Branson has had a lot of success with Virgin Atlantic, but let's look at his other endeavors. Virgin Blue (Australia) is extremely successful, but remember that the concept of a low fare airline did not exist in Australia before he came along. I think that anybody could have been successful starting that airline at that time. Ansett had recently gone into liquidation, leaving Qantas with a monopoly on Australian domestic trunk routes. Virgin entered the scene and started charging 10% of Qantas' fares.
Virgin Express (flying 737-300s and -700s from a Brussels hub) has been on the verge of bankruptcy since Virgin took control almost 10 years ago. Admittedly, things have started to improve in recent months but it's hardly a fine case study of a well managed low fare airline.
Finally, if you read pprune.com as I do, you will notice that Virgin Atlantic pilots seem to be among the lowest paid and most disgruntled in the industry. I don't think I have ever read a positive post from a Virgin pilot on that board.
Not quite so rosy when you see the whole picture.