Branson: VAU was premature


V Australia launched too early: Branson
September 30, 2009

Australian aviation has landed on its feet following the global financial crisis (GFC), but Virgin boss Sir Richard Branson has admitted he may have prematurely launched V Australia.

Speaking to reporters in Brisbane at a celebration to mark Virgin Blue’s ninth birthday, Sir Richard said Australia had weathered the financial storm well.

“Australia has been least affected of all the countries involved,” he said.

“Australia is well positioned to come out of this recession.”

He said no one could have forecast the GFC and the pressure it would have on the global economy.

The company Virgin Blue Holdings recorded a net loss of $160 million for the 12 months to June 30.

This compared with a net profit of $98 million a year earlier.

The decline in demand for air travel and cost associated with the launch of its long haul offshoot V Australia contributed to that loss.

But Sir Richard said long haul routes always lose money for a while and V Australia would eventually be profitable.

"If we knew the world would have plunged into recession when it did, would we have done it (launched V Australia) at that time?

"I don’t know - we might have done.

“We may have delayed it a year.”

He said there were advantages to launching an airline when times were tough, as aircraft were cheaper.

Sir Richard said the downturn in the market meant other airlines may sell for a bargain, but Virgin generally didn’t buy airlines - it liked to create them.

“If Qantas was going for a dollar, we might consider it,” he said.

Earlier on Wednesday, Sir Richard launched Virgin Car Insurance in Sydney saying he could offer Australians 35 to 40 per cent cheaper deals.

Sir Richard said Virgin Money would also launch banking products over the next 12 to 24 months including deposits, personal loans, home loans and credit cards.

Now… if only Branson could launch Virgin French Maid service, he might turn a profit. :wink:


I think the turnover rate would be quite high for the “Virgin” maids :smiley:

He might be “pre-mature” on that one as well. :wink:

Didn’t he publicly criticize Boeing for holding up the deployment of long haul routes on V Australia because of the machinist strike? I know hindsight is 20/20, but it sounds like he owe Boeing an apology.

Yes, he did, but his intention was to get VAU up and running before any further competition comes in due to OpenSkies. Unfortunately that didn’t happen, and Delta put a beating on them on this route.


Now he’s singing a different tune though

“If we knew the world would have plunged into recession when it did, would we have done it (launched V Australia) at that time?
I don’t know - we might have done.
We may have delayed it a year.”


And what’s even funnier, and has some people scratching their heads, is that in the latest issue of AirlinerWorld, there is a nice blurb on the deal DAL and VOZ have together to capitalize on the trans-pacific route, pretty much allowing access to VOZ’s domestic routes.

So the question to ask: Is Branson shooting himself in the foot with VAU? Or would there be a bit of antitrust/unfair competition there? It just seems rather weird to have your Australian domestic go into an agreement with a US carrier on a given route, then have that Australian domestic start up an offshoot airline to compete on the same route that they have an agreement with another airline for.