So Virgin Blue has been judged to be the "Best Low Cost Airline" whizzing around the worlds' skies, hey? Better than Ryanair, Southwest and Easyjet. Obviously Virgin Blue's staff are are much better looking than anyone elses.
Ironically though, the news comes as Virgin is trying to shed the low-cost moniker and portray itself as a value-based or "new world" carrier in an attempt to boost its appeal to high-yield, business like travellers.
Like most pundits, Brett Godfrey (Virgin Blue boss) and the Virgin Blue mob underestimated the impact of the Jetstar (Qantas' low frills offshoot) launch and despite what they might like to believe, this new airline has succeeding in nicking a fair whack of Virgin Blue's passengers as well as downgrading the perception of what "low cost" is all about. And despite it's problems, Jetstar is successful and making money.
And now Virgin Blue is stuck. The gravy-train years of post-Ansett and the simpler challenge of attacking the higher-cost, full-service Qantas are over. The launch of Jetstar has locked Virgin Blue firmly into the middle ground, and has given the Qantas group the ability to match Virgin Blue in price-sensitive segments, as well as continuing its dominance in the premium business segment.
And now they have the impending arrival of business carrier Ozjet, which will further cement Virgin Blue into the middle ground. But the problem seems to be that Virgin Blue doesn't want to accept the middle ground, and as a result are now looking a bit confused.
"Are we a low cost airline (the best in the world, even)? or are we an airline that can cater for business travellers as well?"
The truth is, they don't appear to know. And how do you continue to promote the image of Virgin as a value airline
while pushing it as an upmarket carrier that appeals to the business market? It is difficult to do without completely confusing the market and risk in isolating both ends of the spectrum.
The things that business folks expect like frequent flier programs, lounges, more
flexible fares, priority boarding, fancy meals and other "frilly" offerings cost bucks. And Virgin Blue doesn't have much bucks to spare if this weeks profit warning is anything to go by. No doubt they'll figure out how to do it though. But at what cost?
Further adding to Virgin Blue's dilemma is this weeks announcement from Jetstar of the sale of a million seats at $29, including taxes and charges, to celebrate the anniversary of their first flights on May 25 last year.
If they don't want to lose more passengers, Virgin Blue will have to respond. Again reaffirming them as a low cost carrier.
The reality is that Qantas's Geoff Dixon has Godfrey and Virgin snookered between Jetstar and Qantas. And there appears no way out. Why not just stay there? Why not try to dominate the middle ground?
The business graveyard is full of businesses that were successful in one segment, but the persued growth in another segment, only to fail in winning new business whilst isolating the loyal customers they once had. It's a risky game.