summary
- Virgin Australia, one of Australia’s leading airlines, has its roots in a pub night where the former CFO of Virgin Express wrote down his idea for a low-cost airline on the back of a beer mat.
- Virgin Australia disrupted Australia’s airline industry, ending the monopoly held by Qantas and Ansett.
- Despite facing challenges such as the pandemic, Virgin Australia has shown resilience, continues to innovate and resonate with customers.
The aviation industry is typically considered to be a particularly complex industry, requiring large investments and carrying unpleasant levels of risk. Some jokes revolve around the idea that if you start an airline, you’ll lose all your money. However, as with all aspects of life, there are always exceptions.
You probably think that starting an airline company is a fairly complex and resource-intensive process. And let me be clear: no one would argue with such a statement. But it’s also true that sometimes all you need to take the first step is a pen, a solid idea, and something to write it down. Forget about folders and paper blocks. Can be used on the back side of the beer mat. At least this is what Brett Godfrey used to write down the concept that would become Virgin Australia.
The ‘pub’ revolution that disrupted Australia’s aviation industry
Paradoxical as it may sound, no matter how complex aviation is, some of the most disruptive airlines have their roots in pubs. A good example is Virgin Australia, which introduced the low-cost airline concept.
The airline’s receipt was relatively simple: a few tasty pints (I’m not sure how many), good company, a pen, and a beer mat. The story’s protagonist is known as Brett Godfrey, who previously served as chief financial officer of Virgin Express, Virgin’s European airline, in the 1990s and 2000s.
Photo: Virgin.com
Virgin brand owner Richard Branson has always admired Godfrey’s management style. So when the CEO position became available, he decided to offer him the job. However, by that time Brett had already returned to his native Australia. Saddened by the news, Branson prayed for his trusted friend and told him to let him know if he wanted to start a project in his home country. That sentence was the beginning of something new that would disrupt Australia’s aviation industry forever.
Unexpectedly disruptive – Virgin Australia’s winning mix
As it turns out, Brett had something on his mind. He scribbled it down on the back of a beer mat while spending some quality time in the pub with aviation expert Rob Sherando.
The core idea was to end Qantas and Ansett’s monopoly on the Australian market and make intra-island travel more accessible. The day after the phone call, Brett had the proposal delivered to Branson’s house. The numbers were good, the vision was solid, and perhaps most importantly, Brett’s enthusiasm was contagious. But Richard wasn’t the only one who needed to be convinced of the idea. In fact, Mr Branson needed approval from Virgin’s board, which initially had no particular interest in the concept.
Photo: Virgin.com
Branson remembers trying to curry favor with the board by emphasizing that at the time Virgin was just beginning to establish itself as a global brand. Therefore, they had a rather important asset – surprise. In fact, no one in Australia would have expected Virgin to arrive from the UK poised to change the rules of the country’s air game. After struggling to find a convincing rebuttal, the board eventually agreed.
Virgin’s fastest growing company
With board approval, Brett and Richard launched a new airline with a budget of A$10 million, paid for by Virgin Blue.
The first innovation introduced by the new airlines was the extensive use of the Internet for reservations. Within six months, 92% of bookings were made online. Leveraging the Internet for sales has significantly reduced carrier costs and expanded opportunities for expansion. After Virgin Blue launched, Qantas’ share price plummeted by A$2 billion. Between March and August 2003, the new airline’s team grew from 12 employees to 350, and in less than a year his initial A$10 million investment was The valuation has changed to A$120 million.
Photo: Shaun Garrity I Wikimedia Commons
As other low-cost airlines emerged in the Australian market, Virgin decided to transform into a full-fledged airline and opened international routes. New liveries, new uniforms, a new in-flight service concept and even a business class product were developed, and the airline went from flying his one route to covering the entire country and expanding internationally.
Surviving the pandemic in Virgin style
Virgin Australia has decided to enter voluntary administration following the significant disruption caused by the pandemic.
However, the airline showed resilience and refocused to overcome the crisis. Currently, the company offers flights to his 32 cities in Australia, as well as international flights to Bali, Tokyo, Fiji, Samoa, Vanuatu and Queenstown. For over 20 years, this airline has never lost its “virginity”. A variety of initiatives continue to win the hearts and minds of customers, including a middle seat lottery, LGBTQI+ Pride tickets, mentoring programs and an extensive loyalty program.
Photo: Virgin Australia
Do you know of any other airlines whose history is rooted in a fun night in the pub? Let us know by clicking the comment button below.
