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Ties are on at Virgin Blue?

written by australianaviation.com.au | May 17, 2010

Friday marked the first full week of the Borghetti era at Virgin Blue, and indications are that changes are already happening, particularly within the Virgin Village, with at least one senior executive announcing their resignation.

Long serving head of public affairs Heather Jeffrey finished up on Friday after five years, and will be succeeded by Danielle Keighery, who has held a number of PR and communications positions with the Virgin Group.

Further than that, rumours are reaching AA that Borghetti has made a 180 turn on the no tie policy of his predecessor, instead asking senior executives inside the airline to don neckties, and apparently shunning Manhood author Steve Biddulph’s assertion that ties are outdated and better suited to holding up tomato vines.

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John Borghetti (r), with predecessor Brett Godfrey - a different style of leader? (Paul Sadler)
John Borghetti (r), with predecessor Brett Godfrey - a different style of leader? (Paul Sadler)

If confirmed, it stands to reason that pilots and cabin crew will be next to receive the business makeover. Could it be a sign of things to come?

Since its inception, Virgin Blue has made a major point of doing things differently – just like every other low cost carrier – and has long espoused the “Virgin Flair”. That flair has morphed over the years from face painting and impromptu standup to something a little more standard. Nevertheless, the airline appears to have largely kept its challenger, one-for-the-underdog culture which has made it one of the most interesting places to work.

Enter Borghetti, who was prior to his current role a career Qantas man. Qantas’s corporate culture still suffers from an early ’90s hangover, with a high degree of power distance and a number of layers of bureaucracy and red tape. Simply put, the two companies are like Mars and Venus, and it appears that the two worlds are about to collide.

While that may be a downer for staff who have loved working with the flair, the real question is over how it will be taken by the passengers. Should Virgin continue its move more upmarket, will passengers embrace this more “reserved” Virgin over the cheap and cheerful carrier that started life on the back of a beer coaster in a pub?

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It’s a question that the shareholders will also need to ask. If, in the pursuit of the lucrative business market, Virgin Blue’s cost base rises significantly, it will hurt its position in the market. Under Godfrey’s leadership, the more expensive moves have only come where there is yield to be gained, and all the while a tight lid has been kept on unit costs.

Simply put, if Virgin Blue’s cost base blows out, it will lose its competitive advantage, particularly against carriers like Tiger and Jetstar, which have even lower costs. It may still be able to steal some ground from Qantas at the higher end of town, but its ability to offer the low fares it became famous for would be much less.

If the rumours prove correct, the ties may only be the tip of the iceberg.

What changes do you think John Borghetti will bring to Virgin Blue? Leave a comment below

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16 Comments

  • Josh

    says:

    Dumb move, ditch the neckties or you’ll have unhappy staff and your whole culture will change for the worse. I’ve never seen Branson in a necktie and his lead should be followed. Southwest airlines in the USA doesn’t change to make shareholders happy and guess what, they are one of the few profitable airlines in the USA as a result. John Borghetti, it’s not QANTAS mk II, and I sure as heck hope you’re not lining things up for a QANTAS takeover… Bring back the days of Ansett, when flying was 6 star service… On that note, rename Virgin Blue to Ansett Australia and bring that whole service back and I won’t speak badly about Virgin 🙂

  • Chris

    says:

    Virgin need to take QF on head-on and they therefore need to position in the full service market not halfway between there and a low cost carrier where they are now. Leave Tiger to fight with JQ and give Australians another full service option!

  • Chris

    says:

    Ps – whether the staff wear ties or not is somewhat irrelevant in the overall scheme of things as your average punter won’t notice a difference…

  • Josh

    says:

    I disagree, keep the business people on business planes with business prices and keep the riff raff to the low cost carriers, and keep them happy so us business folk don’t have to deal with air rage…

  • Dave

    says:

    New uniforms are on the way for PILOTS… , as well as changing premium economy to BUSINESS – looks like they are definitely trying to target QF now

  • Alan

    says:

    Virgin will need to change to remain competitive. The use of ties are merely window dressing, the airline has the unfortunate position of being neither a full service or low fares carrier. A whole revamp of the airline including its looks, is needed to reinvent the carrier into a next generation carrier. It seems the Qantas Group has done a great job with their business models capturing all segments of the market with both Qantas, Qantaslink and Jetstar.

    Virgin need to look at their products, aircraft types and markets they want to serve, to become the next generation carrier for Australia. A full business suite with all the trimmings in the fleet would be a great start, not those silly seats they have at the moment.

  • Geoff

    says:

    Is Borghetti a QANTAS trojan horse?
    Your mission should you choose to accept it: Run VB into the ground with high costs and the wrong business plan, then come back to QANTAS and continue your career.

  • Greg Soper

    says:

    As long as the workers enjoy working for the company. From what I see, they are happy there as opposed to the Qantas staff. So many unhappy ppl.

  • Boris

    says:

    Hmm.. flair, different approach to unifroms – remember the jean casual look? All smiles.
    The tie is for those that want to work-work-work and no play! being happy with your workplace and dressing casual neat is better than some clothes that make you feel uncomfortable, it is the person and attitude, not the clothes that make you!
    It is fine, if you segregate the plane! No interconnect, or only during boarding, Tie etc for 1st class (how long will this exist?)/ business, and casual for economy & economy+ (premium).
    Most people that I know that work in an office, just want to loosen up their noose, um sorry, tie. Especially when they are going for vacations. Now business travelers are another kettle of fish… leave those on the Canberra – Sydney corridor and early morning Syd/Mel routes. Maybe Virgin should do a dual product?! A no frills lower than low fare peanut and water only, oh hang-on, some airlines even charge for those too now!

    One thing for sure, is that they are getting ready to diversify, and QLink will have some competition, not only from Rex, as it really is now on the eastern end.
    Now when they will start is another issue altogether.

  • moneybox

    says:

    I have an interview in a week… so do I wear a tie or not?

  • scott

    says:

    I can assure you the staff at virgin are not happy and the moral is at an all time low

  • Insider.

    says:

    Inside scoop is Virgin is getting new uniforms. Very different. Males are being changed first then Females. Also the inside of the planes are also going to be very different. A overall makeover.

  • virgin employee

    says:

    Working the front line at Virgin Blue I can assure all that morale at is fantastic.
    There is a passion and energy from all the staff to succeed. We support the company and its bright future! We’re going places. Watch and see…

  • Virgin employee

    says:

    I’m also on the frontline with Vb & am confident is saying the staffs morale is right up there, we love our jobs it’s a fantastic & vibrant workplace & these changes are exciting too. Having worked in the past for ansett, bring it on JB, you have my vote!

  • Roderick

    says:

    Here’s another hypothetical:
    Borghetti, miffed at missing the big chair at Qantas, seeks revenge on his former employer by ‘Qantasing’ DJ and eroding QF’s market. A selfish plot stewed in a vat of pique – or a solid business plan for market leadership?
    Just putting it out there.

  • Roderick

    says:

    I wonder if JB remembers saying this?
    “It’s a great business with a great team and great culture – you can feel the energy in the people and the brand. The company is in good shape and is exceptionally well placed to build on its strengths and embrace revenue growth opportunities ahead. I look forward to working with the team to create an even more competitive environment for air travellers – domestic and international,” he said.
    – or, irony of ironies, it was written for him by one recently discarded PRs

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