What you need to know:

• Virgin is repositioning as a mid market airline to fill the niche between Qantas and Jetstar as new owners Bain Capital aim to start recouping $6.8bn.
• It has hired Special Group to do the creative special stuff, land the reposition and help get bums on seats.
• The account win pits Special against Accenture hotshots The Monkeys.

Great expectations

Virgin Australia has appointed the in-form New Zealand-founded Special Group to lead its brand overhaul and reposition the airline as a mid-service carrier after US private equity giant Bain Capital paid $3.5 billion for the company when it was placed in Covid-induced voluntary administration last year with debts of $6.8bn.

Management and strategy consulting firm Bain & Company – Virgin’s owner, Bain Capital, is a Bain & Company spin-off – is leading the airline’s strategic transformation program with Special Group already working with Bain to develop the airline’s new public face, customer experience and land a new position sitting between Qantas and Jetstar.

Virgin CMO Libby Minogue, who joined in April and sits on the board of Tennis Australia with its chair and Virgin Australia CEO Jayne Hrdlicka, confirmed the Special Group appointment to Mi3. 

“We are operating in a brave new world which has provided us a unique opportunity to re-imagine what the Virgin Australia service can mean to all Australians as they return to the sky to go on their next adventure or reunite with loved ones,” she said. “As the country re-opens again and Australians reignite their love of travel, we are thrilled to partner with the team at Special Group to help us take our award-winning customer service, Virgin flair and unrivalled travel experience to the next level.”

Qantas and Virgin will face-off more aggressively early next year in a marketing battle to woo business and leisure travellers as domestic and international travel restrictions ease. 

Virgin is working at pace with a high-powered team at Bain, including its Dallas-based global airline practice lead David Emerson.

Hrdlicka herself was a 13-year veteran at Bain & Company and hiring her former management consulting firm has parallels to News Corp’s Broadcasting CEO and Foxtel chair, Siobhan McKenna, a former partner at McKinsey & Co who has hired her old firm for lucrative business transformation programs at the Murdoch media company, and at Ten when she was on the board before it was acquired by US giant Viacom CBS. 

Hrdlicka, also a former Jetstar CEO, said earlier this year: “Australia already has a low-cost carrier and a traditional full-service airline and we won’t be either. Virgin will be a mid-market carrier appealing to customers who are after a great value airfare and better service.”   

Last month, Virgin’s Minogue launched an ad campaign 'Service so Good' via The Precinct to maintain the airline’s market presence until Special Group’s work emerges in 2022. 

Special versus Monkeys

The coming tussle in the skies between Virgin and Qantas also pulls in two of Australia’s creative hot shops: The independently-owned Special Group now has offices in Sydney, Melbourne, Auckland and LA. It was named by UK trade magazine Campaign as Global Agency of the Year and was hired by Uber Eats in the US after its lauded work in Australia has run in nine countries along with an airing by Uber Eats during the Super Bowl. The agency also won a global ad effectiveness award for Tourism New Zealand and was appointed by ANZ Bank in May as its lead brand agency. Other brands in its portfolio include Uber, Kayo Sport, Bonds, KPMG, Red Bull and Yalumba Wines.

Special’s Australian CEO and Partner Lindsey Evans said of the Virgin win: “This is without doubt one of the most exciting and interesting marketing challenges in the land, and of our careers. The Virgin Australia team are some of the nicest and brightest in the business and we are over the moon to be on this journey with them.”

Special now takes on Accenture Interactive’s hot shop, The Monkeys, which it acquired for $63 million in 2017, working for Qantas. It is one of the most sought after creative agencies in Australia and last week won the Advertising Council’s Grand Effectiveness Award for its work on the NRMA. 

There have been market rumblings that The Monkeys allure was fading at Qantas but about three months ago the airline appointed the agency to develop a new international brand campaign to be ready when borders start opening up. 

Qantas launched a domestic brand campaign earlier this year via another awarded shop, BWM Dentsu, before the Covid Delta strain shut down state borders. Qantas followed up in August with a mainstream ad campaign rewarding Australians to get vaccinated, created by the company that makes the airline’s in-flight safety videos, Brand & Story. 

Meanwhile, the lucrative Qantas Loyalty unit has remained the most active part of the airline’s efforts through Covid with a number of marketing campaigns via BWM Dentsu. Australians have been unable to fly but their appetite to “earn and burn” rewards has remained surprisingly strong.     

Qantas’ next critical challenge is opening up and filling its inbound and outbound international routes. The flagship international brand brief was won by The Monkeys in a three-way pitch with BWM Dentsu and, according to unconfirmed industry conjecture, start-up shop Howatson & Co. 

The airline has also been building out its in-house creative services division, mainly for higher-volume, lower cost production work and communications.