Newspaper article The Evening Standard (London, England)

Branson Flies into Asian Turbulence over Virgin Blue; Business Day

Newspaper article The Evening Standard (London, England)

Branson Flies into Asian Turbulence over Virgin Blue; Business Day

Article excerpt


GIVEN that they are newlyweds, Richard Branson and his Singapore Girl seem to be falling out of love pretty quickly.

While Singapore Airlines says through gritted teeth that everything is "fine" between the Asian carrier and its 49%owned Virgin Atlantic, even some of the couple's best friends are worried about the strength of the marriage.

Take a headline in Singapore's government-controlled Straits Times newspaper.

"Are Branson and SIA on a collision course?" it asked recently, describing a crosscultural union that might be heading for the rocks.

The latest issue souring what the Straits Times described as "already strained relations" seems to be Brisbane-based Virgin Blue, the funky no-frills carrier that has upset Australia's airline duopoly.

Virgin Blue has just celebrated its first birthday and is going from strength to strength, irritating incumbent Qantas and Ansett with its cheap fares.

At the same time, SIA is flirting with Air New Zealand, which owns Ansett.

SIA owns 25% of Air New Zealand and wants to go to at least 50%.

That does not sway Branson. He has declared Virgin Blue his "favourite project" and has continually stressed his commitment to staying independent of the big operators.

He is pushing Virgin Blue into new Australian routes and across the Tasman Sea in New Zealand. And he is planning a public float of the airline as it edges into profitability.

SIA is not amused. Its usually unflappable chief executive Cheong Choong Kong said SIA "would not like it if Virgin Blue started operations in New Zealand". The airline testily said last week that what Virgin Blue does is its own affairs. "We have no say or interest in what VB does in Australia," SIA said.

Typically for Branson, Virgin is enjoying the spoil.

Qantas announced it was starting up a low-cost carrier to challenge Virgin while Air New Zealand, 25% owned by SIA, revealed it had been in talks to buy a stake in Virgin Blue. …

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