Virgin Blue adTHE new television ad for Virgin Blue inadvertently sums up the branding dilemma faced by the airline, which launched as a Low Cost Carrier in August 2000 but has been moving steadily upmarket ever since, so much so that a couple of years ago CEO Brett Godfrey was publicly toying with the idea of launching a … Low Cost Carrier. This thought didn’t fly. Instead we now have a feel good ad that reminds people of the days when Virgin was positioned as cheap while emphasising service and attractive people. 

It contrasts the travels of a Brad Pitt lookalike in 1999 and 2009.  Ten years ago he drives (airfares too expensive) now he flies into the arms of his beautiful girlfriend faster than you can say “corny” while a comforting voice says: “Of all our great ideas the best one was to make it possible for all Australians to fly”. Clearly the advertisement is designed to foster an emotional connection. But does it really say anything? I’m not sure. 

I’m not sure because it’s asking customers to remember an airline that no longer exists, the Low Cost Carrier that initially drove a wedge through the cosy Qantas-Ansett duopoly to emerge as a major regional aviation force with around 70 aircraft, while repositioning the carrier as offering more than just “great value” airfares, something it’s been trying to do for the past few years.

“From humble beginnings, launching as the first sustainable low fare airline in Australian skies, Virgin Blue has grown to be recognised the world over as an innovator and leader in the global aviation industry,” Virgin says. “With its evolving business strategy, Virgin Blue is becoming more relevant to the corporate market whilst retaining and keeping its promise to serving its traditional leisure base.”

Virgin Blue caters to this leisure base by still offering extremely cheap airfares – saw a $55 fare today between Sydney and the Gold Coast – but these low prices no longer appear to be part of its core strategic identity. Cue the TVC.

There are potential issues with this because no question that pricing is driving the domestic aviation market, which leaves rivals such as Jetstar and Tiger Airways clean air as the low cost alternatives while Virgin Blue is stuck somewhere between them and Qantas, not a comfortable place to be.

That said, the whole emotional connection thing may remind people of how things were before Virgin (which now has an impressive 32% market share) landed in Australia. People do remember the Qantas-Ansett duopoly, and not in a good way. But the reality on short haul flights is that emotion is driven by pricing and in most cases consumers will go for the lowest airfares every single time, an area where Virgin has lost its image edge. Price and a clear identity matters, there’s no getting around that.

Travel Trends: June 15, 2009

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