Turbulence at Virgin: How the Airline Can Get Back to Smooth Sailing
Virgin Atlantic has been making headlines for dropped routes, possible layoffs and profit losses. But this wasn’t always the story for the UK-based airline and hopefully, for the company’s sake, it can get back to smooth sailing.
When Virgin Atlantic took its maiden voyage from London’s Gatwick Airport to Newark, N.J. on June 22, 1984, it promised to drag the airline industry kicking and screaming into the 21st century. It reintroduced the glamour and excitement of air travel through the unique British brand of cheeky irreverence that is the calling card of its fun-loving and famous owner Sir Richard Branson. When you flew on Virgin, it felt less like getting on a plane and more like entering a nightclub full of fun loving, sexy people. It was also in many ways the antithesis of its archrival, the somewhat stuffy and some might say “tired” British Airways.
From the beginning it was evident that Virgin knew its story and that was embodied in everything it did -- a process my colleagues and I at our branding-consulting firm co:collective call “storydoing.”
From the carefully chosen crew of flirtatious young lads and lassies to the personal entertainment and aptly named Upper Class service, the Virgin experience was unique. No detail was left to chance and passengers felt they were part of the “in crowd.”
The charismatic Branson took every opportunity to flaunt its culture. His carefully cultivated naughtiness often poked fun at rival British Airways. For instance, when a new Ferris wheel, the London Eye, was being erected in 2000, it could not be raised from the ground. Sponsored by British Airways, the Eye was set to be a British landmark. Seeing an opportunity, Branson dispatched a blimp to the site with a message emblazoned on the side: “BA Can’t Get It Up!!” Headlines followed and Virgin’s cool quotient rose.
A spot of turbulence -- Virgin loses its “cool”
As it turns out, British Airways is having the last laugh. According to a recent article in the Wall Street Journal, in three of the past four years, Virgin has posted losses. Its competitors have closed the gap in comfort and service. And while Virgin has only 40 jetliners and about five percent of weekly flights at its London hub, British Airways has 134 jetliners and more than 51 percent of Heathrow flights. And this isn’t the only bad news for Branson’s airline. It also recently announced that Virgin was dropping routes to Australia (making British Airways the only direct flight from the UK), along with potential layoffs.
Worse, some say the airline -- once the arbiter of cool -- has lost its cachet and its story. It’s become stale and boring like all those other airlines.
I’m certain becoming just another airline wasn’t Virgin’s plan. A combination of rapid growth and hard economic hardships has eroded the culture. When times are tough and money is hard to come by, the urgent takes precedence over the important, the wrong people end up making decisions and the brand gets pushed to the side. Most companies don’t realize they’re sacrificing their very culture until it’s too late.
My bet is that even though Virgin has paired with a traditional airline (Delta owns 49 percent of the company) they’d like to once again be considered the hip and stylish airline.
Time for a revival?
So how can Virgin revive its brand? Hiring a new CEO, which the company did last February when it recruited former American Airlines executive Craig Kreeger, may provide the airline with a breath of fresh air, but it won’t guarantee its survival. What Virgin really needs is to get back to its core story. For Virgin to do that, Kreeger and his team need to have a clear sense of what the Virgin story is and what about it captured the imagination and loyalty of millions. There’s some sense they’re trying: an ad campaign launched in late 2012 promoted the idea of “flying in the face of ordinary.” But while this may help tell the story of what the airline is all about, it won’t translate into much unless the story is put into action.
Actions speak louder than words.
For Virgin -- or any company -- to succeed in the long run, they must embody a story that everyday people want to be part of. If they want to return to being the arbiter of Brit cool, they have to understand what that looks like in 2014 and make that evident in everything they do.
Companies like Starbucks and Apple succeed not just because of their great products, but because they have a story that people want to participate in. It is this deeper narrative – this storydoing – that creates fierce loyalty and authentic evangelism about a company. In companies that merely storytell, revenue is pumped into the marketing department, which works to create stories through advertisements. Few people in the company are involved, and the story is considered separate from the corporate strategy.
A new Virgin advertisement on television is clearly storytelling. Richard Branson hiring a blimp to poke fun at British Airways -- now that’s taking action-- it’s storydoing.
So how can Virgin Atlantic become a story-doer again? They must consider the stage in which they are operating -- the world is different today than when they launched thirty years ago. Virgin must continue to innovate. It must extend the Virgin experience beyond the plane to what happens when you get off. What do today’s entrepreneurs and trendsetters want? For Virgin to be “red hot” again, it must figure that out and make it part of their experience. That may be harder to do than dreaming up a fancy new commercial, but it will likely be more successful.