How Virgin Blue got started
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How Virgin Blue got started
From a flight of fancy, Virgin Blue's Brett Godfrey reaches for the sky. .Darren Goodsir. .March 16 2002. .. .Brett Godfrey's impossible dream to carve himself a stake of the Australian aviation market started in a boozy haze in a London pub. . .. .Appalled by the domination of Ansett and Qantas, Godfrey - then a middle-ranking finance manager for Sir Richard Branson's Virgin Atlantic airline - fancied his chances of bringing down the behemoths of the air, and inebriated moments often led to such "big talk". . .. .Many entrepreneurs had cherished similar ambitions. . .. .Previous aspirants, Compass I and II - not to mention the numerous backroom airlines that got plotted with much flourish on whiteboards but never made it to the tarmac - had failed to win enough business from the duopoly to sustain the horrifically high industry costs. Godfrey, however, was undaunted. . .. .So too was his Australian friend, Rob Sherrard, in town for the 1997 Ashes cricket tour - the man who gave him his first job in the airline business. Appropriately, as the pints of lager flowed, and the boozing became more raucous, Godfrey and Sherrard started plotting seriously. Average fares were 40 to 50 per cent higher in Australia than for full-service carriers in Europe. . .. .Ticketing in Australia was rigidly controlled, with conditions purposely restrictive - supporting high price regimes. . .. ."It just needed the right model, and the right kind of backing," says Godfrey reflectively after the triumph of staring down Ansett's would-be rescuers, Solomon Lew and Lindsay Fox, and sealing the $260 million deal with Patrick Corporation. . .. .It is an historic partnership that values Virgin Blue, the budget carrier launched 18 months ago with only $11 million, as a $520 million player. . .. .Remarkably, the astonishing success story has been achieved in the most depressed climate in the industry's history, in a land renowned for its tigerish tactics and sorrowful failures. . .. ."No-one in commercial aviation history in the world has land renowned for its tigerish tactics and sorrowful failures. . .. ."No-one in commercial aviation history in the world has ever done this before - turned a full profit in its first year," Godfrey said.. .. ."It has filled everyone here with the most amazing sense of pride. . .. ."We all really feel like we have done something - not just for us but for passengers and the industry." . .. .Godfrey's first business plan, put together with Sherrard in the four weeks after the airline's initial pub conception, was a humiliating flop. . .. .Rolled out with relish to Virgin Atlantic's executives, the proposal was rubbished. . .. .His preferred aircraft, Boeing 737s - now dominating Australian skies because of their leg room, single-aisle convenience and low running costs - were criticised. So were his figures. . .. .More powerfully, however, Virgin's head-office boys didn't want to hurt Ansett, the long-time friend, and the idea was abandoned. . .. ."We ended up in the bin," Godfrey said. "And that's where I thought it had all ended." . .. .But Godfrey's moment, helped by Sir Richard's chance run-in with a bunch of jilted Australian pilots, would come.. .. .Born in Sans Souci, in Sydney's far-south, Godfrey, 38, the second of four children - is the son of a Qantas marketing executive. . .. .Before the age of nine, his father's aviation and tourism jobs took him to Papua New Guinea - "where Dad must have gone for disciplinary reasons" - Fiji and Vancouver. . .. .The family returned to Australia in 1972, moving to Melbourne. . .. .He attended Mount Waverley High School, with fleeting hopes of becoming an air force pilot, but barely passed his leaving certificate as his mind concentrated, he says, on girls and skirt.. .. .Three afternoons a week, he worked as a butcher's assistant - "cleaning up muck on the floor and putting them back in the mince steak pile." . .. ."I was pretty undisciplined. Sport and girls were far more important than any work. That changed, I don't know why, as soon as I went to university." . .. .After completing a Bachelor of Business with honours, Godfrey went backpacking for a year, travelling back to the United States and Europe before a return through Asia. . .. .He then became an auditor, winning a posting to Canada where he met his future wife - coming back to Australia six months later determined to do another job. . .. ."I was a pretty crappy auditor," he says. "But it was a great grounding, the best business grounding." . .. .The biggest twist in his career, arguably, occurred when he met Sherrard and became the financial controller of Sherrard/National Jet - now National Jet Systems, a Qantas subsidiary. . .. .It is here the pair started contemplating an unthinkable vision.. .. .However, Godfrey felt obliged to leave for the United Kingdom, as his wife, a Canadian with English ancestry, could not work in Australia. "We went to stay for two years, and ended up staying for nine.". .. .After sending his curriculum vitae to 120 airlines, he won a job at Virgin Atlantic in the early 1990s. It was, according to Godfrey, "a maverick airline" that was starting to shake up some of the more conservative airlines. He remained a financial manager for a few years before moving to Belgium.. .. .Picked personally by Branson, Godfrey helped launch Virgin Express from the ashes of Euro-Belgian Airlines, based on the plethora of "cheap and cheerful" airlines like RyanAir who were redefining air travel.. .. .After the airline floated 15 months later, Godfrey was promoted as Virgin Express's chief financial officer - but industrial strife and the loss of three chief executives in eight months meant for a torrid time. . .. .Approached to be chief executive, Godfrey told Branson he wanted to take his family home, believing his two young boys should be schooled in Australia. After a bit of arm-twisting, he agreed to stay on, but only for so long. . .. .Then, in a turn of fate that has now made Godfrey a wealthy man, Branson took a flight between London and Brussels - and had a chat in the cockpit with two ex-Australian pilots on the uncompetitive domestic scene.. .. ."They were just telling him about Australia and how mucked up it was and how passengers were being raped and pillaged by the incumbents and that was like a red rag to a bull to Richard," Godfrey says. . .. .Shortly after the cockpit conversation, Branson again pleaded with Godfrey to stay, and then asked him to let him know if he could ever help. . .. .This was Godfrey's big break. . .. .When Branson, his ears still ringing from the Brussels flight, was told by Godfrey he wanted to launch an Australian airline, "he was just as excited as I was... He actually asked me if I'd put the pilots up to it". . .. .For the next few weeks in London at the start of 1999, with only $50,000 for a feasibility study and not many tools other than the Internet, he put together his dream. . .. .In late November, Branson pushed the green button for Virgin Blue - signalling the start of a bloody four-airline war, cheap fares, the quickened death of Impulse, and then, staggeringly, Ansett's collapse.. .. .Virgin Blue's formula - in-flight antics with personable cabin attendants, low frills, new planes and rock-bottom fares - has won it a legion of fans. . .. .One of them, Chris Corrigan, the managing director of Patrick Corporation, and among more business people flocking to the airline, was so impressed he bought the company - well, half of it, at least. It now only has to fly more planes to steal Qantas passengers.. .. .But getting to this point has meant incredible sacrifices. Godfrey works punishing hours and rarely sees his family - his favourite past-time being sleep and helping his boys with weekend sport. He has ditched rugby and sailing. And it is only going to get busier. . .. ."Everyone in this organisation has definitely aged and I know I have never worked so hard in my life," he says. "At Virgin we feel like crusaders. . .. ."Our people look up and see that airfares are half as much as when we started - and they know that they are responsible for that. . .. ."But it is just going to get harder and harder, not easier, because now we have so many opportunities. Do we go international, do we do freight, do we look at the regional services? It's like someone keeps on nicking my torch - and taking it further down the tunnel. . .. ."And I now have Richard as a night-time boss and Chris Corrigan as my day-time boss. It is only going to get busier." . .. ."I no doubt will be rewarded as and when this thing does mature. . .. ."We have options, we will do well out of this. . .. ."But I am still driving the same ****ty car, that I still share with my wife, a beaten up Pajero with the bumper bar missing." . .. .Reminded that his $10 million venture is now worth more than half a billion dollars, with loftier predictions - and some hinting at an alliance with Air New Zealand - Godfrey pauses, a rare thing for this fast-talking, fast-moving executive. And then he chuckles: "Not bad, is it?". . . . <small>[ 16 March 2002, 19:53: Message edited by: Ustar ]</small>
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I'd love to know who those two Australian pilots were. Also, I can't help continually comparing DJ to the MacDonalds of the restaurant(?) industry. Surely quality/experience and mentality are more important than price (at any cost) at the end of the day.
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One would assume that Macs are doing something right. Surely they couldn't have survived and prospered without repeat business. Maybe that's what your average consumer wants after all?
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Caught a bus from Hobart to Launceston the other week. 2 1/2 hours. No suggestion of 'in bus' service - I didn't crave a sandwich, soft drink or a cup of tea. Caught a plane from Melbourne to Launceston last week. 45 minutes flying time. Sandwich, softdrink and a cup of tea. Son flew Melbourne to Launceston week before with Virgin for $100 less than the Qantas fare and wasn't fed. Where does the difference in quality, experience and mentality come into it? Are the pilots less experienced than the Qantaslink pilots? Are the flight attendants less experienced? Only difference in quality of service was the lack of food. One of my co-workers recently flew with Virgin Blue and couldn't speak highly enough of the cabin crew - and the pilot who greeted the passengers as they boarded.. .. .Have no criticims of Qantas/Qantaslink but good luck to Virgin Blue for at least making air travel affordable to a great many more people.
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I would suggest that Virgin Blue would be very pleased about being compared, on a marketing plateau, to McDonalds - one of the most successful. .fast food franchises in the world.. .. .That's one of the reasons Ansett is out of business today - bad management & poor marketing. The absolute(ly) opposite to Virgin Blue !
Anyone will tell you Mac's is not good for you.. .. .In fact too much of it will kill you.. .. .Enough of that though. Lets face it, it doesn't matter how VB tries to sell itself, in the end VB is in buisness to make as much money as it can, as does any private buisness. . .. .Another issue that then effects a company as it grow is the community expectation that they become a responsible corprate citizen. This includes allowance for things like disabled access etc, just ask the Townsville Refueller - No forklift in TSV, for that matter VB has a long way to go with most basic amenities.. .. .Qantas (and Ansett) has a great record in this respect, it also provides apprenticeships and generally behaves in a manour of advancing our industry.. .. .Let's hope in time VB leaves the childish golden arches and grows up or goes away.. .. . <img border="0" title="" alt="[Big Grin]" src="biggrin.gif" /> <img border="0" title="" alt="[Big Grin]" src="biggrin.gif" /> <img border="0" title="" alt="[Big Grin]" src="biggrin.gif" />
What have you got against Bus services. And thats coach services to you too, we got dunnies in the back <img border="0" title="" alt="[Big Grin]" src="biggrin.gif" /> . Mate if you want torture try deadheading back from DN in 89 in a chocka's coach all the way back to BN. 60 hours, I tell ya. The only choice I had was the coach south or wait over a week for the C130. We had a business to run so no choice at all. What DJ got straight up was the express coach industry, no comparison when it takes 2hrs to fly BN-ML and it takes 24hrs by coach and the fares are the same, it's not rocket science. If U look at the first flights it reminded me so much like the crowds on the express run. My last few flights on DJ show a few more suits flying up front as well so the adds are working. Question ,How come the rat can suddenly match all these fares as well as try to blow them out of the water on the ML-SY run? Surely that should suggest that the rat has been ripping the punters and the companies who pay for the suits up front. Using Macca's is a bit broad a description, Howabout using VIP and DELUXE and what they did to Greyhound and Pioneer. Sorry about using the busline bit, but what happened in the skies happened back in 1981 to the coach industry. Same equipment,same service better price and they made good money on it. There is even a rumour about the reason DELUXE went down was because of what they did to someones bus line.. .. .Regards. . . . <small>[ 17 March 2002, 10:12: Message edited by: OZBUSDRIVER ]</small>
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Amos 2 - I'd suggest that most air travel on short sectors in economy class compares pretty well with bus travel - whether that be Virgin or Qantas/Qantaslink. The point I was making is that when people board an aeroplane, they seem to expect a level of service that they wouldn't expect by any other means of travel for a comparable distance, ie meals, drinks, magazines.
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What a bunch of jerks some people are. "The sooner VB goes away", you would have to be blind freddy not to see that VB will never go away.. .Seems like some people would rather go back to the cosy old days and pay ridiculous air fares.. .The market has spoken, there is a place for VB and thats why Ansett is not flying any more. The management did not read the market.. .All the people who despise VB can fly Qantas and get their meal for $100 extra. Good luck to you. The other 2 million seem to disagree.
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Meals drinks and magazines are not being provided out of kindness. Once the punters get their head around the fact that they are paying for that service (it aint free) I'm sure they will have a change a heart.. .What we're talking about here is simply a mindset which was created by a duopoly.. .A duopoly which, judging by the terms and conditions and price structures of their fares must have a direct hotline between their respective marketing departments. Hang on, isn't that price fixing?
Try two companies escargo. . .. .Not to mention unpaid child support that had been deducted and not passed on, unpaid taxes, hotel bills that were then chased etc.. .. .One day a journo will actually do some work and not just dish up the drivel that is served up to them.. .. .One thing that is certian is that Sherrard Aviation/ National Jet did not become NJS. Nothing is further from the truth. NJS was a joint venture set up for the SANTOS contract and was between National Jet (Sherrards) and Jet Systems (Warren Seymour)hence National Jet Systems and run by wassa. . .. .For Godfrey to be saying these things clearly shows that the rest of the things he says are questionable.. .. .I'm sure that Warren Seymour and a few other ex- partners may well tell a different story as to what contribution these guys made to NJS and the demise of Sherrard/National jet. . .. .Godfrey in particular had little if any involvement with NJS and the Airlink development was after Sherrard had been removed.. .. .As for taking credit for Sherrard Aviations'fate being in his words the "Financial Controller". Great finacial controlling!! I'm not sure it looks too good on the resume though.. .. .NJS became what it is despite these two guys.. .. .It's interesting that Sherrard doesn't hold out his next venture National Airlines as a big accomplishment either or for that matter even mention it. It's way up there with the first try.. . . . <small>[ 18 March 2002, 07:03: Message edited by: d_concord ]</small>
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d_concord. .. .Hmmmmm I was trying to reconstruct the real history of Sherrards involvement in all of this in my minds eye before posting but you beat me to it.. .. .I was trying to work out if indeed he was the same gentleman who became known to us in the mainstream industry in the early to mid eighties with a less than sparkling career as a used aircraft salesman of no fixed percentage. It seems to be so.. .. .As you suggest a really thorough scrutiny of our friend Godfrey and his mate Robs ventures of the past may produce an entirely less upbeat and different story.. .. .It has not gone unnoticed that Godfreys mate has kept a fairly low profile throughout all of this, a modesty which I don't recall as a being a noticeable characteristic of the gentleman in times past.. .. . </font><blockquote><font size="1" face="Verdana, Arial, Helvetica">quote:</font><hr /><font size="2" face="Verdana, Arial, Helvetica"> NJS became what it is despite these two guys. </font><hr /></blockquote><font size="2" face="Verdana, Arial, Helvetica">is probably all that needs to be said.. .. .The victors always got to try and rewrite the history, but I suspect that the internet has put paid to that.. .. .Virgin Blue has done a magnificent job getting to where they now are, but it is because of the vision and support of Sir Richard for a business plan that went down a pretty well trodden road begging to be executed and it is a credit to the support of some pretty dedicated and motivated staff.. .. .Godfrey certainly did his bit and deserves the credit for that as for the rest....? . .....but there are some wounded out there that might feel otherwise.
Hi Guanty,. .. .That was my first post, even though I have looked on for a few years but I couldn't hold my tongue after seeing that garbage.. .. .Virgin seems to be doing very well, but I suspect most of the success must really go down to timing which neither these two or anyone else for that matter had anything to do with predicting. In particular the demise of Ansett.. .. .I'm sure that history may not have been as kind to Virgin if that little debarcle hadn't been going on for a number of years.. .. .However, I hope for the industry's sake that it does well and keeps employing people.. .. .For what it is worth I heard the whole Sherrard Aviation story over a beer one night, albeit second hand, which is reason for not repeating it, and it would make your hair stand on end but knowing the source and his involvement I would say it was true without doubt.. .. .I'm surprised that it hasn't come out considering the number of antogonists that Sherrard in particular would have.. .. .It's going to be interesting to see how Patricks handle their disclosure and keeping the market informed requirements with some of this stuff.
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I can't help but feel that this is where Michael Pascoe was going when he was quizing Corrigan about who actually held shares and where the voting rights might lie. (See another thread). .. .It's a whole new ball game when disclosure and transparency are involved and your a public company. Is it the case that they have voting rights and/or are directors and their decisions effect what is at this stage a $260m public company investment with obviously more to come.. .. .I don't know the full story of their past . .(however some) but the above posts confirm a few of the details that I was aware of. I've been a bit incredulous that it hasn't come out before now.. .. .Surely the answer lies in the press talking to the other directors of both NJS and Sherrards at the time Sherrards ceased (not became NJS). Two of the then directors that I am aware of spend extensive amounts of time overseas now, so they may be hard pressed to flesh it out.. .. .The press could also be smart and ask the pair what they think the other directors would say and whether what was said in the above article was actually correct or just spin.