Virgin Atlantic is the flagship business within Sir Richard Branson's Virgin Group. It is the UK's second largest long-haul carrier behind British Airways, although it is considerably smaller than its rival, carrying around 5m passengers a year, compared to BA's 35m. Although widely identified with Branson himself it has in effect been a joint venture since 2000, when Singapore Airlines acquired a 49% shareholding. The airline's reputation as a challenger brand was established in the 1990s by a bitter public relations battle with British Airways, in which Virgin was able to demonstrate that the national carrier had mounted a behind-the-scenes campaign to destabilise the new upstart. The resulting publicity secured Virgin Atlantic's future. The Virgin Group has diversified since then, establishing separate short-haul airlines in Australia, Africa and the US, all as partnerships with other companies. Meanwhile, competition in the long-haul sector has remained challenging for Virgin Atlantic. At the end of 2012, Delta Air Lines of the US agreed to acquire Singapore Airlines' 49% stake, drawing Virgin into its SkyTeam alliance with Air France-KLM. The latter acquired man additional 31% stake in 2017. Virgin Group also has investments in airlines in Australia and other markets, and is continuing to pursue a long-held dream to launch commercial space travel under the Virgin Galactic banner.
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Adbrands Weekly Update 3rd Aug 2017: Sir Richard Branson is to surrender majority control of the Virgin Atlantic airline as part of a wide-ranging strengthening of its existing Transatlantic alliance with Delta Airlines of the US and Air France-KLM. Delta already has a 49% stake in the company, acquired from Singapore Airlines in 2014. Now Air France-KLM will purchase a 31% stake from Branson for around £220m. Virgin Group will retain the remaining 20%. At the same time, Delta and its Asian partner China Eastern Airlines will each acquire a 10% holding in Air France-KLM. Branson said Virgin Atlantic will continue to fly under its current name.
Adbrands Weekly Update 7th April 2016: Alaska Air was victorious in the bidding war for Virgin America, topping rival bids from JetBlue with an offer of $2.6bn. Providing regulatory approval is granted, the deal will establish the enlarged Alaska Air as the #5 US carrier, ahead of JetBlue. Based in Seattle, Alaska Air had revenues of $5.6bn in 2015, compared to $1.5bn for Virgin America. "Consolidation is a trend that sadly cannot be stopped," commented Richard Branson. "I would be lying if I didn't admit sadness that our wonderful airline is merging with another." No decision has been made on the future of the Virgin America brand, but it may not survive. In a statement, Alaska Air said only that "it will explore with the Virgin Group how the Virgin America brand could continue to serve a role in driving customer acquisition and loyalty to get the best from both brands." In other words, it all depends on how much Branson wants in the way of a license fee for the continued use of the Virgin name.
Adbrands Weekly Update 31st Mar 2016: Airlines JetBlue and Alaska Air are expected to table rival bids later this week for Virgin America, the low-cost US internal carrier jointly controlled by Sir Richard Branson's Virgin Group and private equity firm Cyrus Capital Partners. The consolidation at the top end of the market from eight major carriers into the current big four of American, Delta, United and SouthWest has prompted the likelihood of mergers further down the chain as well. Virgin America is currently the 9th largest US airline by passengers, with a current market cap of around $1.7bn. JetBlue and Alaska Air rank 5th and 6th respectively.
Adbrands Weekly Update 29th Oct 2015: Havas-owned Arena Media has surrendered the Virgin Atlantic account after less than a month after pressure was put on the agency by rival airline Emirates, whose far more valuable global media account is managed by larger sibling Havas Media. The business has shifted to PHD, which was the runner-up in the recent pitch.
Adbrands Weekly Update 8th Jan 2015: Ads of the Week: "Let It Fly". Adam&Eve DDB's debut on the Virgin Atlantic account is a bit of a puzzler. As a film, it's excellent, with great production values, strong editing and a muscular voiceover from Andy "Gollum" Serkis. But it's surprisingly tangential to the service it's designed to promote. RKCR/Y&R's ads said a good deal more about Virgin Atlantic than this, which could be for just about any airline. Yes, shouts the ad, you should fly to New York to make that pitch. The choice of airline seems more like an afterthought.
Adbrands Weekly Update 6th Nov 2014: Virgin Group faces a daunting challenge to its much-hyped but long-delayed bid to launch commercial space travel for paying customers, following the mid-air break-up of its latest test flight. That accident claimed the life of one test pilot and seriously injured another. Though the company is so far vowing to press ahead with the project, the disaster has heightened scrutiny of Virgin Galactic's approach to safety procedures, raising fears that these might share some of the general informality of the wider Virgin Group's corporate culture. Newspaper coverage over the weekend suggested that the group had previously received but disregarded warnings from the main space safety industry regulator over its volatile fuel system, though those claims were denied by Virgin. An initial survey into the crash by the National Transportation Safety Board appeared to suggest that pilot error may have caused or contributed to the break-up of the aircraft. However, that possibility will do little to ease the growing concerns of celebrity passengers who had been expecting to take their debut space flight in just a few months time. The group confirmed it has received a "handful" of cancellations. The tragedy is likely to push back Virgin Galactic's maiden commercial flight by at least another several years, if not indefinitely. That will raise serious funding issues since the business is already thought to have exhausted the initial capital investment provided by equity partner Aabar of Abu Dhabi, and is now being funded entirely from within Virgin Group. As a result, Virgin is to press ahead with the previously postponed IPO of Virgin Money this month, and also announced an IPO of its US regional airline Virgin America before the end of the year. Another concern is the damage that any further bad news from Virgin Galactic would inflict on all the multiple other businesses not directly controlled by Richard Branson who currently pay him royalties to license the Virgin name.
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