Friday marked the first full week of the Borghetti era at Virgin Blue, and indications are that changes are already happening, particularly within the Virgin Village, with at least one senior executive announcing their resignation.
Long serving head of public affairs Heather Jeffrey finished up on Friday after five years, and will be succeeded by Danielle Keighery, who has held a number of PR and communications positions with the Virgin Group.
Further than that, rumours are reaching AA that Borghetti has made a 180 turn on the no tie policy of his predecessor, instead asking senior executives inside the airline to don neckties, and apparently shunning Manhood author Steve Biddulph’s assertion that ties are outdated and better suited to holding up tomato vines.
If confirmed, it stands to reason that pilots and cabin crew will be next to receive the business makeover. Could it be a sign of things to come?
Since its inception, Virgin Blue has made a major point of doing things differently – just like every other low cost carrier – and has long espoused the “Virgin Flair”. That flair has morphed over the years from face painting and impromptu standup to something a little more standard. Nevertheless, the airline appears to have largely kept its challenger, one-for-the-underdog culture which has made it one of the most interesting places to work.
Enter Borghetti, who was prior to his current role a career Qantas man. Qantas’s corporate culture still suffers from an early ’90s hangover, with a high degree of power distance and a number of layers of bureaucracy and red tape. Simply put, the two companies are like Mars and Venus, and it appears that the two worlds are about to collide.
While that may be a downer for staff who have loved working with the flair, the real question is over how it will be taken by the passengers. Should Virgin continue its move more upmarket, will passengers embrace this more “reserved” Virgin over the cheap and cheerful carrier that started life on the back of a beer coaster in a pub?
It’s a question that the shareholders will also need to ask. If, in the pursuit of the lucrative business market, Virgin Blue’s cost base rises significantly, it will hurt its position in the market. Under Godfrey’s leadership, the more expensive moves have only come where there is yield to be gained, and all the while a tight lid has been kept on unit costs.
Simply put, if Virgin Blue’s cost base blows out, it will lose its competitive advantage, particularly against carriers like Tiger and Jetstar, which have even lower costs. It may still be able to steal some ground from Qantas at the higher end of town, but its ability to offer the low fares it became famous for would be much less.
If the rumours prove correct, the ties may only be the tip of the iceberg.
What changes do you think John Borghetti will bring to Virgin Blue? Leave a comment below
