When British icon Richard Branson completed his deal with Singapore Airlines, he did more than merely connect with another business partner. He turned chaos into the latest business tool of the Communications Age.
Many international airlines are staid operations even though passengers see them as romantic and glamorous. Branson has taken his Virgin Atlantic airline back to the era of aviation excitement and daring. But the daring isn't in the air. It's in his boardroom maneuvers.
Like Virgin Atlantic, the Singapore Airlines standard of service puts other airlines to shame. As a frequent frequent-flyer, I speak from experience. Branson must get another modicum of satisfaction by throwing another wrench at his main competitor, British Airways. A BA chairman once made unflattering remarks about Branson in public. Shouldn't have.. Branson sued,won, and collected a billion dollars. Now another victory flag to fly for England's favourite entrepreneur.
Singapore Airlines and Virgin Atlantic now code-share flights. Consequently, Virgin now provides world-girdling flights with its name on two airlines sporting superior service and attractive international fare packages. At the same time, Branson picked up petty cash -- in the form of US$966 million for a 49 percent share of his company. BA, among others, never dreamed a slice of his airline could be worth so much.
But the big coup has been the effect on BA and other carriers. With this adroit chess-like move, Branson has caused chaos to run through the thinking of the entire airline industry. It's not only the landing slot juggles he's incorporated into his company with this deal, but he now has a big-time partner willing to help on other things. Like now Branson needs another big, expensive Boeing 747-400 series aircraft to better serve his multiple destinations. These planes cost several hundred millions each. But, what the heck! His buddy SA has a spare. A friendly deal among partners solves that problem -- with no long wait for delivery.
Meanwhile back in the boardrooms of a dozen airlines, consternation is the main thing flying:
•"What will he do next?"
•"What's behind this move that we haven't seen yet?" •"Oh my god, what does that do not only to us and our partners in Star Alliance (one of two major joint-marketing airline groups)? Are our deals with the others still legal?"
Especially, since Singapore is scheduled to join the same alliance.
The chaos may be the main factor in the deal. Top-level executive time, plus all the support staff the execs will be tying up, prevents Branson's competitors from doing their regular job -- participating in the daily race for customers. Branson has just captured a few hundred thousand of top business frequent-flyers. Almost all from his competition. It's hara-kiri time for his opposition. Him? Oh he flew to Neckers Island in the Caribbean (yes, he owns that too) for Christmas with his family. And his competitors thought Y2K was a problem.
What's Branson into next? He likes the Internet and with all these billions lying around, he has another bright idea: selling cars in Britain over the Internet at a 25 percent discount. Overhead, with no bricks and mortar buildings and only phone sales staff, would allow a profit. Why not deliver new cars directly to buyer homes? Saves them time. Maybe if they buy two, they receive a free round-the-world flight? Maybe this is franchisable? Virgin cars delivered anywhere in the world. Has a nice ring, don't you think?. Next month's idea? Sell gas and electricity in Britain via the Internet. After all, shortly he will have this well-trained phone sales staff. Would they work overtime three-days a week at double pay?
Oh, look! Chaos is circulating. Isn't life great!
