Please ensure that your seat is in the upright position, your tray-table is folded away, and that your hair is just right," instructs the V Australia safety animation; not quite the usual drill. "I'm amazed you got away with that," quips Virgin Atlantic Airways chief executive Steve Ridgway to Brett Godfrey, his opposite number at Australia's Virgin Blue.
"We were the first onesto do those cartoon safety briefings and we had amassive battle with the CAA because they thought it was demeaning, but we were able to prove within weeks that passengers paid far more attention to it," saysRidgway. "We have bomb-proof compliance and safety processes, but at the same time we have spirit and personality."
V Australia's safety animation has only just premiered, but Virgin Blue's cabin crew havebeen giving a live performance for years. "The repertoire is fairly extensive," says Godfrey, citing examples such as using the whistle for attracting attention -from the opposite sex or sharks. "It's because of those light hearted moments that people actually listen," he claims. "No one watches it on British Airways, they just sit there and read the newspaper. It's all about personality. They are trying to create robotic results and therefore people get bored; they won't watch it and they won't listen."
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| Left to right: David Cush from Virgin America, Virgin Blue's Brett Godfrey and Virgin Atlantic's Steve Ridgway |
©Steve Parsons (AP) |
We are in a people carrier, bound for downtown Los Angeles. Ridgway has just arrived from London and a few hours ago Godfrey touched down on V Australia's inaugural flight from Sydney. The jetlagged executives are joined by Virgin America chief executive David Cush, who has flown in from San Francisco for the occasion. A few minutes ago we left the airport, where Virgin Atlantic, V Australia and Virgin America's aircraft have lined up on the tarmac for the first time.
"It's clearly the lousiest time ever to launch an airline," confesses Godfrey. "In airline history this is equal to picking 10 September 2001 as a launch date. We made the decision three years ago when the world was a different place. The sweet spot has clearly gone pretty sour at the moment." Godfrey is warm, approachable and a personification of easy-going Australian frankness. "I used to have a lot of hair; I had an afro," he laughs. "It's all gone away in the last nine years [since Virgin Blue launched], so good luck to Steve [Ridgway]; he's been here so long he's obviously had a couple of transplants."
Ridgway wears a suit, with an open-necked shirt. His English accent gives him an air of formality, although he happily engages in the light-hearted banter with Godfrey. "Brett's pretty boring," he jokes. "In our own way, we're all a little bit quirky. Well, you have to be working for Richard [Branson], don't you? You can't be that normal."
Ex-American Airlines executive Cush is more traditionally corporate; his suit and tie contrasting with Godfrey's jeans, shirt and jacket. But he may be the dark horse of the group. I ask for anecdotes about how the three of them interact off-duty and, with a knowing smile, he declines to comment: "I feel that anything that I say can only be turned against me ten times harder, so I think I'll take the Fifth on that one."
The three CEOs form an unlikely team with their different accents and cultures, and yet their shared business ethos has brought them together under the Virgin Group. Even their business models are different. UK-based Virgin Atlantic is a long-haul operation, while US domestic carrier Virgin America follows a hybrid low-cost, full-amenity model. Australia's Virgin Blue dubs itself as a "new world"carrier, offering low fares, with extras on a pay-per-use basis. Virgin Blue's offshoots comprise New Zealand leisure carrier Pacific Blue, Samoan joint-venture Polynesian Blue and long-haul operation V Australia, which now bridges Virgin's transpacific gap.
Ridgeway playfully labels Cush"the new boy on the block", adding theyhave only met a couple of times. "We probably meet at least twice a year. Now the businesses are actually linking up in markets and there is closer co-operation, I suspect it will be more often."
Virgin Group founder Sir Richard Branson is demonstrating this new-found connectivity by flying around the world in eight days. During the London-Hong Kong leg, he admits: "The last thing I expected was to be the first airline to fly around the world. What Virgin has managed to do -unlike BA, our principle rival -is we've got the Virgin brand flying [in all these markets]. At least we've got up and running; now we'll integrate as best we can."
Virgin Nigeria, which droppedlong-haul operations earlier this year, does not appear to feature in the group's global connectivity plans. Ridgway explains: "Their challenges are different. Their challenge is to create a safe and reliable airline with a full set of Western standards. They are more regionally and domestically based, because that part of Africa needs regional traffic, so it's not the same."
Airline foreign ownership restrictions mean getting to this point has not been easy. Ridgway labels such hurdles as ridiculous: "This industry created the global economy, so why we're still subject to all these archaic rules is beyond any of us. It will change, but it's just painful."
Virgin America, in particular, has faced ownership scrutiny since its inception, making the topic very relevant to Cush: "The nature of travel is about crossing national boundaries and the fact that we can't have efficient economic structures and efficient governance structures to facilitate that is crazy. As soon as it breaks down in aviation it's going to be the travelling public that wins," he argues, tagging on: "I feel like I'm running for office." Godfrey applauds.
Despite the diversity, Ridgway says Virgin's core culture and values - its sense of fun, innovation and customer care -can be felt across the group's airlines. "I think those principles pervade everything, meaning we can operate airlines in different countries, with different cultures and under very different business models." He describes Virgin as an iconic brand, adding: "I think, in many ways, we have punched above our weight, in terms of the impact we have had. We've kept our competition on their toes, by doing things differently and innovating."
So how has Virgin differentiated itself? Godfrey responds: "Virgin is one of the best, most recognised brands in the world. It's value, it's fun, it's style, it's panache, it's not being staid, it's not being corporate and pin-striped, it's about flair. We're not the kind of group that knocks on toilet doors."
More importantly, he adds, it is about people. "Our cabin attendants are the managing director of the flight. We tell them not to be afraid to make mistakes; I've made plenty of mistakes. If you spill a drink, offer the passenger a free ticket -just don't spill too many. We let them do the job they're trained to do. Our people come to work with their personalities, not their excess baggage."
Ridgway concurs:"If you meet our people atthe pub on a Friday night, even if they've had a terrible week and it's all gone wrong,if somebody starts criticising the company, our staff will be there [defending us]. When we do staff surveys, the advocacy scores that we get are incredible. The pollsters always say they've never seen these kind of scores."
Cush believes staff buy-in is essential. "In a customer service business, people can tell if the staff are happy, proud of what they're doing and optimistic about their company, because it's human nature," he says. "It's all the non-verbal things that come with interacting with people."
While we were waiting at the airport, the Virgin America check-in area was deserted. Without knowing who was watching, the ground staff put on some music and broke into an ad-hoc series of dance routines. They were having fun and it brought a smile to the few people who wandered past. In some corporate cultures this would be frowned upon. In Virgin it is encouraged.
Cush continues: "This is the only job I would have left American for in aviation, because of the Virgin brand, what it represents and what it promises people. A big part of what Virgin's about is putting the fun back into the journey. That's why I'm here. If I fail, then I'm done with this industry and I'll make way for someone else to do it."
When on duty travel, Virgin Blue's senior staffare expected to stop back and help with aircraft turnarounds and every four months they "go to the airport and chuck bags", says Godfrey. But he adds: "I messed up a whole flight and was warned that we might have to re-board everyone. We needed a new delay code, MOT: management on tarmac."
Cush, Godfrey and Ridgeway evidently share a passion for the Virgin ethos and brand. "I would certainly rather compete with American, United or others than with V Australia, Virgin Blue or Virgin Atlantic," says Cush, prompting me to quiz them about internal rivalry. Ridgway pauses before answering: "I've never been asked that question before. No, I think it's more about making your business as profitable as you can." Godfrey agrees that internal competition is not an issue: "PR for any one airline affects all the rest." And, with Virgin Americain its infancy, Cush has other priorities: "We are just focussed on building the brand, building our market presence and getting to profitability as quickly as possible, rather than making comparisons with anyone else."
Virgin's airlines are increasingly touching one another's markets, so how is each carrier's scope defined? Cush says transatlantic or transpacific flights are not on the cards for Virgin America. "That's really not our plan. It's not what the company was built for. We have a $100 billion domestic industry here. Our revenue this year will be $600-700 million.We can do just fine flying within these borders." V Australia was first mooted six years ago, long before Virgin America started operations. Godfrey says Virgin Blue was already beginning to bump its head on the ceiling in domestic Australia, meaning its next move had to be outside the country. He adds: "I think there are enough markets out there that the last thing we would want to do, particularly given the co-operation we have, is to see ourselves directly competing, because then Steve wouldn't talk to me, David wouldn't talk to me and that wouldn't be fun, would it?
"What we've done is quite an important step towards linking the Virgin empire, in terms of airlines, but we've still got a way to go. This is the start of it. Clearly the idea is to try and get the group in such a way that there is a lot more commonality than we even have today, right down to logos."
The three CEOs are meeting in Los Angeles to discuss potential areas for co-operation. Ridgway says this could span areas such as sales and marketing, joint aircraft acquisitions and ground handling. "There haven't been a lot of opportunities in the past for us to do joint things," says Godfrey. "I think going forward we'll probably put a greater emphasis on group procurement."
But Cush is not convinced: "I ran oneworld for American for several years and I think the assumed benefits of joint procurement and things like that are actually overblown. It sounds good on paper, but the actual benefits are tough to achieve."
Instead he prioritises improving the customer experience through information technologyintegration, which simplifies codeshares, loyalty schemes and data transfer, and pursuing the revenue opportunities of stronger brand ties. "My focus going forward would be on a bit more on the revenue side, systems integration and probably less on the procurement side," he says.
Virgin Blue and Virgin Atlantic already swap cabin crew, V Australia's Boeing 777 interiors were designed in co-operation with Virgin Atlantic and the group has just unveiled all-Virgin round-the-world fares. Godfrey says: "When you think about it there's no common shareholding between these three airlines and yet the level of co-operation and access to what would probably be proprietary information is pretty openly shared."
With the economy in meltdown, any gains which can be gleaned from closer co-operation will undoubtedly be welcome. "We're navigating our companies through probably the most dramatic economic circumstances any of us have ever been in," says Ridgway. "We're having to react very fast to make sure that we're keeping our businesses strong." But Godfrey playfully counters: "I'll go against the grain; I think it's just a fabulous time to launch an airline. We're doing our bit for the global stimulus package."
Although Godfrey's comments are tongue-in-cheek, Cush believes he has a point: "A soft demand environment is a good time to launch a good value product because people are looking for alternatives," he says. "We're seeing a lot of people come our way, who perhaps wouldn't have done if times were a little bit more flush."
A lack of consumer confidence has caused airlines to hit the "bottom of the stimulation barrel", says Godfrey, with further price cuts failing to stimulate demand. "About 30 airlines have failed in the last 12 months and I think, if confidence doesn't return, we could very possibly see double what we've seen in last 12 months. I think that if you gave anyone in this car a choice they'd rather be dealing with last year's fuel costs than this year's slump in demand. There's very little an airline or even a group can do about the economy and that's the thing that bothers us most."
Despite the financial doom and gloom, Godfrey says life at Virgin is never dull. "I can say safely that we've all done things that we wouldn't normally do if we tried to pretend we were running companies. We sometimes get very un-serious, but that's a large part of the appeal. We get together with Richard at least once a year and mayhem is usually the order of the day. These three guys are usually in the thick of it." At times the un-seriousness shows. I ask if Godfrey is facing any challenges specific to the Australian market. "Australians?" quips Ridgway. "Their toilets flush backwards?" suggests Cush. Godfrey laughs: "Yeah, that's a real problem, that one."
Ridgway describes working for Branson as an amazing adventure: "Life is never dull. He concentrates on the things that matter and he trusts us to run the business. For the staff, for customers and for all the political battles, he's brilliant."
Godfrey agrees that one of Branson's strengths is the trust he places in his team: "Working for Richard, if you're doing a good job, you get left alone, and I don't say that in a negative way. He is someone who embodies the whole flare, the whole culture, the fun element of the brand that he created. Richard will still ring up with some kooky ideas; every third or fourth is an absolute gem."
Branson's enthusiasm and optimism rubs off on Virgin's employees, says Cush, and his belief in a good product and customer service means everything else takes care of itself. "In the US domestic industry that's a bit of a different philosophy. We were in a bit of a cess pool of service in the US and the fact that all decisions have to be made with the customer's perspective first has been incredibly important for how we've started our company."
So, what next? Ridgway responds: "David's got massive potential with his current model, with the size of the US market, so it's going to be a long time before he's bored. Brett's just started international services across that great big wide ocean and there're lots of places for him to fly to which we wouldn't be able to serve." But equally, he adds,Virgin Atlantic hasn't run out of steam either. "We're still relatively small and, even at 25 years' old, we're a relatively young company. We've got one [airline] here that's only a day old and one that's only about a year old, so I think there's lots more to come."
Ever the entrepreneur, Branson says he is looking to apply Virgin Galactic technology to speed up earth-bound travel. "In time that technology could be developed to pop out of earth's atmosphere and pop back down somewhere 8,000 miles away," Branson says. "Imagine London-Sydney in under two hours, Sydney-New York in two hours. Our team of engineers at Virgin Galactic are starting to think about that."
He is also eyeing the potential for Virgin airlines in Brazil and Russia, but one of his long-held ambitionsis to attach short-haul operations to Virgin Atlantic. "I would love to do that, but I can't get the slots," Branson says. "Maybe, one day, something might happen between Virgin and BMI to give us the short-haul fleet. Some sort of integration of the two airlines would make sense."
He is evasive about whether negotiations are underway with BMI's future majority owner: "If I were talking with Lufthansa, I wouldn't be allowed to talk about it, and if we weren't, I'd have nothing to talk about," he teases.
The Virgin founder struggles to come up with an airline brand which is similar to Virgin. After a few moments' thought, he picks a non-aviation brand: "Apple innovates, it creates great products, markets them well and has a powerful leader," he pauses, smiles and continues, "who has a lot of responsibilities, worries about detail and gets the details right. I think Virgin is slightly more fun-orientated; we take ourselves slightly less seriously, but generally we are quite similar."
Branson is at the heart of the Virgin brand and his cartoon cameo features in the V Australia safety animation, inking an autograph for a fellow passenger.
With lines like: "In case you haven't taken a plane in the last century, it is important to remind you this is a non-smoking flight," the safety briefing is quirky, innovative and attention-grabbing, but with a serious undertone, neatly encapsulating the Virgin ethos.
People don't pay attention to the same; they pay attention to what's different.
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©Steve Parsons (AP) |
Chief executive, Virgin Atlantic
"I just don't find life boring," says Ridgway. "There's always plenty of exciting things going on." The Virgin Atlantic chief, who grew up on a farm in the south west of England, lists his passions as fast cars, fast boats and sailing. "I like charging around," says Ridgway. It is one of these hobbies that led to his career with Virgin: "I met Richard on a speed boat in the middle of the Atlantic in the 80s. Virtually all my team went to work for the airline after that. [Virgin Atlantic]had just started and we never looked back."
If Ridgway were to leave Virgin, he says it would be fun to work for a company like Apple: "I like innovating and doing new things and that must be a pretty iconic place to work. It's about changing the mantra in different markets and, if you're motivated, I think you can do that in lots of different places."
Ridway believes Virgin Atlantic still has huge potential to develop its long-haul leisure business. He adds that the airline is in "relatively good shape" going into the downturn and does not rule out a re-flotation in the longer term: "One day, if we felt the business was the right value and the market conditions were right, we would do that."
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©Steve Parsons (AP) |
BRETT GODFREY
Chief executive, Virgin Blue
In 1989 Godfrey wrote to about 130 airlines,looking for work while backpacking, striking it lucky with his top choice Virgin Atlantic. He applied for a tabloid-advertised finance role, but scored the more senior finance manager's position. "I didn't read the FT in those days," he confesses. "The better job was in the FT." He was later asked to head Virgin Express: "We went through three CEOs in a year. I thought it wasn't a very smart move, the strike rate's pretty poor here, but I agreed."
In 1999 Godfrey told Branson he wanted to return to Australia. "He said if there's anything you ever want to do in Australia, let me know. About six years earlier I'd tried to get a concept for an airline off the ground in Australia. It got mocked and knocked; no one wanted to finance it. I told him about it and, within about two hours, I had the old business plan dusted off. We chatted that weekend and by Monday we'd agreed we were going to do it. He got it and no one else did."
Godfrey's free time is filled with cycling and family life. Likening Virgin Blue to a third child, he says: "When I run out of ideas, it'll be time to turn the lights out and hand in the keys. I'm not sure I'd have the energy to do something like this again. If I wasn't working in an airline, I'd be lying on a beach somewhere."
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©Steve Parsons |
Chief executive, Virgin America
"I have the most boring story," claims Cush. "I was recruited by a corporate recruiter. I had quite a senior role at American at the time, butI came here because I love travel and what it represents; bringing people together, learning new things and learning about new cultures. Virgin's about putting the fun back into the journey, getting on the airplane and enjoying the ride. That's why I'm here; hopefully we're going to find a way to do that in the domestic US business."
Virgin America's ownership has been scrutinised since long before its launch. Cush rebuffs: "Since the day the DOT approved us, the right of the US shareholders to sell their stake back has been public. We are in compliance with the US regulations, and will remain in compliance. We have others that are interested in stepping in, but our US investors have given us no indications that they are interested in stepping out."
Cush, who grew up in Louisiana, loves to fish, surf and ocean swim: "Anything around the water is big with me. I like outdoor activities." While professing to be "a boring guy", some anecdotes seep out, challenging that claim: "I do like to swim, at night, in the ocean, between islands, where they have to paint me with yellow paint just in case they have to go out and rescue me," he laughs, referring to an "alleged, but undocumented" incident on Richard Branson's Necker Island.
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| ©Victoria Moores |
Founder, Virgin Group
"I never dreamed Virgin was going to achieve what we've achieved. I'm delighted when I wake up in the morning and it's not a dream," says Branson.
Aviation is renowned for generating a small fortune from a large fortune and therefore surely Branson's millions would be better invested elsewhere. But he counters: "Money is not my reason for doing anything. Obviously you try to make money to pay the bills, but that's not where my satisfaction lies. Money's not my motivator and I wouldn't have got into the airline business if it was. To have it in the bank would be very dull. He died with £X million in his bank account isn't an exciting achievement. It's a by-product if shareholders get something; it's never a high priority."
The intrepid Virgin Group entrepreneur denies being disappointed by slow progress or low profit margins within aviation: "Virgin's airlines have achieved every single thing I could have possibly imagined. What is important to me is that Virgin companies rank in the top one or two of every market that they operate in.
"I love a challenge, creating things to be proud of, making a difference, the enthusiasm of our staff, bringing back a bit of glamour into the airline industry - and I think the various Virgin airlines have done that. I am 100% definite that I'll never get bored in aviation."
Read Victoria's stories, blogs and tweetsfrom Virgin's eight day round the world trip
Source: Airline Business
