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Australia, the magazine : Australia, the magazine
75 inbound investment SIR RICHARD B NSON The flamboyant business knight says he is often mistaken for an Australian because of his "maverick way of doing business and love of a challenge." Snapper Media AN AUDACIOUS FORAY INTO THE AIRWAYS OF THE SOUTHERN HEMISPHERE HAS TURNED INTO ONE OF THE MOST LOVED AND PROFITABLE BRANDS DOWN UNDER. BY PETER LYNCH WHY VIRGIN FEELS AT HOME IN AUSTRALIA When buccaneering British entrepreneur Sir Richard Branson launched Virgin Blue into Australia's domestic airline market, many thought he would nose dive into aviation's graveyard, along with the others who have tried to break the dominance of flag-carrier Qantas. Ten years on, Virgin Blue has announced record profits, investment in a new fleet of 50 aircraft and has left no one in any doubt the brand is in Australia to stay. The airline stands out as one of Branson's best investments anywhere. For the last six months of 2009, the airline made a AU$62.5 million profit off AU$3 billion of revenues, outperforming Qantas for the first time in its history. A new CEO -- former Qantas senior executive John Borghetti -- is expected to chase the lucrative business market with a plan to double the marque's 12 percent share of the market. "We are going to take Virgin Blue onto the next stage, which is keeping it price competitive but really go after the business market and give Qantas a proper run for its money," Branson says of future plans. "We are likely to go more up-market with the airline." Later this year, Virgin Money will relaunch its credit card and banking products. Virgin Mobile, now owned by the second biggest telecom provider Optus, has a million customers. V Australia is flying to Los Angeles. Virgin Atlantic flies to Europe. David Baxby, the 32-year-old head of Virgin Group Asia Pacific and an executive said to have the ear of Branson, has an interesting theory about why Virgin has succeeded so strongly in Australia. "Look at Richard's philosophies and ideas -- he doesn't suffer fools, he stands by his word, he likes to cut to the chase, he is very focused on value for money with a service element," says Baxby. "When you look at Virgin's attributes and look at what Australians are proud of as Australians, there are a lot of similarities. It is almost -- and my English friends would hate me for saying this -- almost more Australian than British." One Englishman understands. Branson says he is often mistaken for an Australian. "I think it's my maverick way of doing business, and my love of a challenge," he says with his trademark grin. Baxby, who worked for Goldman Sachs as an advisor to Virgin when they originally looked at investing in Australia, says Virgin regards itself as a venture capital company which forms itself around not just money, but also the philosophy and ideals of Branson. Virgin Blue launched with a handful of planes and a limited number of routes after founding chief executive Brett Godfrey took the idea from a beer coaster in a London pub to the British business tycoon. The launch rocked Australia with sub-AU$100 one-way fares between Sydney and Melbourne. Shortly afterwards, Ansett, the country's second domestic carrier, closed operations. Branson had, in the parlance of Australians, "lucked out". Virgin quickly grew to fill the void. Today, the Virgin Group owns 25.94 percent of Virgin Blue -- the biggest holding, alongside 30,000 retail shareholders, ordinary Australians with confidence in Branson's vision. Baxby says that Australia is regarded by Virgin as one of its big success stories. "We're very positive," he says. "Richard has founded seven billion-dollar industries from scratch, which is extraordinary. Virgin Blue stands out because it has taken its plan to a level that no one could have anticipated."