I’ve deep admiration for Richard Branson and his Virgin Group is one of my admired companies and Lovemarks. After reading Bloomberg BusinessWeek “Will Richard Branson’s Virgin America Fly?“, I am interested to see how things will turn out at the end. Here is an excerpt,
“Virgin America does have at least part of one big asset: Branson. He is a legendary salesman with a special love of aviation—not only for the business, but for adventures like his attempted around-the-world balloon flights. To hear him talk, profits are almost secondary to his mission with Virgin America. “American carriers are all very much the same, and the people who run them do not think of the customers at all,” says Branson, sitting in the first row of one of the airline’s parked, white-and-red painted A320s. “It’s become a bus service.” As guests mingle on the tarmac under the bright Texas sky, the interior lights bathe the cabin in a deep magenta, meant to evoke dawn. “If everything is a joy, if you come onto a plane and the lighting is right, the seating is right, and the cabin crew is happy, you feel welcome,” Branson says. “It’s like you have come into somebody’s home.”
Over the last two decades, Branson has applied a focus on customer service and industrial design to an array of businesses, some more successful than others. His Virgin Group has started companies, or licensed its brand to startups, in such varied fields as mobile phones, trains, hotels, soda, vodka, magazines, condoms, and, most recently, space tourism.” […]
American’s reaction to Virgin’s incursion into Dallas provides a glimpse of what the airline can expect as it enters the territory of deeper-pocketed rivals. Since Virgin started selling tickets to Dallas over the summer, American added two flights a day to Los Angeles and San Francisco and cut its fares on those routes by about 25 percent.
Furthermore, any airline can add the sorts of services and amenities Virgin features. Carriers including Delta and United are currently adding Wi-Fi throughout their fleets. Continental is in the process of bringing satellite television to its planes, though passengers have to pay for it, and Boeing (BA) has integrated color LED mood-lighting into the designs of its new 737. Virgin America’s in-flight system is already showing signs of age.”
Interesting note: “investments with put options”
“The Federal Aviation Act of 1938, meant to allow airlines to be commandeered by the military during wartime, limits foreigners to owning 49 percent of a domestic airline.”