There are certain to be some surprises in Kuala Lumpur this afternoon when Richard Branson arrives by rocket ship or perhaps on a palanquin borne by veiled maidens to announce an investment in AirAsia.
Branson and surprises go together.
But whatever spectacle accompanies the deal Crikey first mentioned on June 26, this will be the moment the jigsaw of Virgin-branded airline franchises starts to click into shape, and the paranoia about the Virgin menace warms up by a few hundred degrees in other airlines including Qantas.
Yesterday Branson was in San Francisco celebrating the first flights by Virgin America, a two-class but low cost US domestic carrier otherwise very similar to Virgin Blue.
And of course there is already Virgin Atlantic, currently 49% owned by Singapore Airlines, although perhaps not for much longer if persistent hints of a buy back by SRB’s private company are correct.
Suddenly there are Virgins Everywhere. Virgin Atlantic (UK to the world), Virgin Nigeria (to Europe and the US), Virgin Blue (Australia and New Zealand), V Australia (from here to America next year) and this week Virgin America and ‘Virgin Asia.’
There is even a Virgin Galactic, for rocket flights to the edge of space from late 2009.
Of course it is not clear if AirAsia and its long haul companion, Air Asia X, will be called Virgin Asia. Maybe a 20% stake doesn’t earn naming rights. But it will be branded as a Virgin group airline some way or another and it will invade Australia soon, starting with Avalon to KL flights with connections to all over Asia including India.
Branson’s private company has 25% of Virgin America, 26% of Virgin Blue, 49% of Virgin Nigeria and 51% of Virgin Atlantic. He made an eye-watering $1.5 billion in cash and market valuations out of his original $10 million entry to this market with 96% of Virgin Blue, and took another $1.5 billion off the Singaporeans for the original sell down of Virgin Atlantic.
For all the gimmicks, Branson is billions of dollars in front of everyone when it comes to personally making money out of airlines.
The Virgin airline franchise makes the early loss making efforts of Qantas to franchise Jetstar across Asia look lame…but as very senior people at the flying kangaroo make plain, it is early days, and they plan more than the already done deal to buy into Vietnam’s Pacific Airlines.
The guessing game now is what next for the Virgin Empire or Vampire as it is known in certain circles? Japan, China, Russia, Canada, Latin America, or….something bigger in New Zealand than the Pacific Blue plaything?
Qantas needs to find a ‘super star’ deal for Jetstar very soon, and it is looking, everywhere, with urgency.