Richard Branson is at it again. Undaunted by the failure of Virgin America (where he was a minority investor but attached the airline to the world famous Virgin brand) and the need to cede operational control of Virgin Atlantic Airlines to Atlanta-based Delta to save the airline (Delta owns the largest percentage of shares in the airline and in collaboration with partner Air France-KLM effectively control the airline’s board) Branson is hitting the US again – now with Virgin Trains.
America’s first new major private intercity passenger railroad in over a century, Brightline announced a new strategic partnership and trademark licensing agreement with the Virgin Group, one of the world’s most recognizable brands in travel and hospitality. The partnership will allow Brightline to leverage Virgin’s industry-leading expertise and customer experience to establish a powerful new brand, “Virgin Trains USA”. This is similar to the licensing agreement for Virgin America which was NOT majority owned by Branson and now effectively the same for Virgin Atlantic which has been dubbed perhaps deridingly “Delta UK,” by critics who bemoan the apparent downfall in service levels since Delta effectively gained control of the board.
The question has be asked if the Virgin brand still sells? It has a cache’ but recent failures including Virgin Records and Virgin America makes you wonder particularly in this country.
Brightline launched service between Miami, Fort Lauderdale and West Palm Beach in May, 2018. Brightline currently has plans to expand to Orlando and Tampa, and pending the closing of the previously announced XpressWest acquisition and receipt of necessary federal approvals, to begin railway construction next year to connect Las Vegas to Southern California.
“Our private sector-led effort to reinvent passenger rail service in America is taking another leap forward with the addition of the Virgin team,” said Wes Edens, chairman of Brightline and co-founder of Fortress Investment Group. “Virgin has built a respected and trusted brand in travel and hospitality. With our shared focus on customer experience, powered by a culture of innovation and disruption, we are well positioned to build on our success.”
Virgin Group has more than 60 companies focused on its core consumer sectors of travel and leisure, telecoms and media, music and entertainment, financial services and health and wellness.
“We have had a lot of fun and success creating innovative transport businesses that shake up markets and establish loyal followings. We transformed domestic air travel with Virgin America. Tens of millions of Americans travel on the railways every day, and we have tried for over a decade to find an opportunity to provide them with that same excellent service experience,” said Sir Richard Branson, founder of Virgin. “Brightline is at the forefront of innovation in this market, and the ideal partner for Virgin to work with to alter perceptions and traveling habits across the United States.”
“This partnership further validates the incredible accomplishments of our team as we challenge conventional wisdom to reinvent train travel in America,” said Patrick Goddard, president of Brightline. “Given our shared values and Virgin’s track record, this partnership will help amplify our efforts and growth potential as we seek to expand to new markets.”
Virgin Group has significant experience operating in the UK rail sector, including its ongoing investment in Virgin Trains, a high speed intercity passenger rail system which it has run for 21 years. Last year passengers took more than 38 million trips on the UK’s West Coast Main Line.
As part of the strategic partnership, an affiliate of Virgin Group has agreed, subject to certain closing conditions, to make a minority investment in Brightline. Funds managed by an affiliate of Fortress Investment Group LLC will retain majority ownership of Brightline. Brightline’s current management team will oversee daily operations, engineering, business development and strategy. Brightline will rename itself Virgin Trains USA this month and transition to Virgin Trains USA branding in 2019.
Will the Virgin branding matter? Time will tell, but for me it’s very cool, but I am admittedly a Richard Branson fan.