With regards to low passenger demand for air travel, RwandAir may soon opt for air-freight services to navigate the unprecedented…
Thinking Outside the Plane: Airlines With Non-Airline Branches
Back in 2017, AirlineGeeks took a look at aerospace brands that had alternative branches in other industries with companies like Boeing, Bombardier and General Electric making other products such as hydrofoils, monorails and diesel trains, respectively. But this is not limited to large engineering firms, with some airlines and their parent companies having investments spread into other industries as well.
Let’s once again fold up those tray tables and step away from the airline and travel business to see the various other spaces some companies have ventured into.
Probably the most recognizable airline brand tied into a conglomerate is that of Richard Branson’s Virgin Atlantic. The Virgin Atlantic brand is 51 percent owned by Virgin Group, a British-based conglomerate with branches into various brands. The British icon traces its roots back to the launch of Virgin Records in 1972 with Branson and fellow businessman Nik Powell forming the company.
While Virgin Atlantic would be his first transportation investment in 1984, Branson continued to push into the industry with the start of rail operations in 1997 under the name Virgin Rail Group. This segment of the company would win bids to take over the InterCity West Coast and InterCity CrossCountry as the British railroading industry was pushing for franchising on routes.
The routes would eventually split ownership with Scottish-based Stagecoach. These would not last as Virgin would retract its interest in railroading with the CrossCountry route being removed in 2007 and the West Coast franchise not being renewed when a new deal was needed to be completed in April 2019.
Despite not being a majority stakeholder in the railroading business anymore, Virgin’s name still appears as minor stakeholder and naming rights partner. Virgin Trains East Coast was a joint venture that was 90 percent owned by Stagecoach for the rights to operate rail line. Virgin’s name would appear on the trains till 2018 when Stagecoach terminated the franchise deal due to underperformance.
Virgin Trains also appears on the former Brightline intercity train from West Palm Beach to Miami, rivaling the current Tri Rail train network. Virgin Trains USA operates the route alongside Fortress Investment Group as part of a marketing strategy to use the Virgin name to promote growth. The investment group has plans to expand into the future with a high-speed connection to Orlando which is currently in the process of being built.
Soon after the railroad involvement came the most notable and recognizable Virgin brand of this now conglomerate in Virgin Mobile. The telecommunication company was formed in 1999 as a way to provide another telephone operator for the U.K. Since then, the subspecialty of Virgin would expand through the 2000s with new operations formed in countries including Australia, South Africa, Poland, Saudi Arabia, Canada and the U.S.
And this just a portion of the Branson-built empire, with the company investing in other industries ranging from financing to radio to space travel. Virgin also allows for further expansion by agreeing to sell its naming rights if it feels like it can help another company get involved in a profitable market, similar to the Fortress Investment Group’s train project in southern Florida and other airlines like Virgin Australia and now-defunct Virgin America.
While the Chinese brand is most known for its airlines including Hainan Airlines, Suparna Airlines and airport operators like Swissport, there is more to HNA Group than aviation. Buried under large sums of debt and airline acquisitions, the Chinese conglomerate has a few branches that are not aviation based.
One of which is that of cargo container leasing arm Seaco. The sea, rail and truck-going cargo containers offer various solutions for bulk transportation needs including specialty built railers for dry freight, refrigerated materials and liquids.
Seaco was sold to the Chinese company in 2011 at $1.05 billion but may be up for sale again as the airline-turned-conglomerate has been forced to sell assets to stay afloat. Containers from Seaco are leased to users for corporate purposes and the company stands as one of the leaders due to the success of the Chinese market in recent decades.
The Chinese parent company has also gotten involved in financing and technology in its decade long spending spree, buying companies ranging from GoPay Information Technology and Easy Pay Co. Ltd. To Pactera and Advanced Card Systems Holdings Ltd. According to HNA, Pactera is known for its IT solutions while Advanced Card Systems is the largest supplier of IC card readers for smartphones in the Far East.
The parent company of Air Asia and Air Asia X and founder Tony Fernandes also aren’t afraid to venture into other industries. Besides being well known for his successful low-cost airline, Fernandes has made a financial backing off of the Tune Hotels, founded in 2007 under the same no-frills concept as his airline. The hotel chain currently has 10 locations across Malaysia and a single hotel in Liverpool, U.K.
The company would also expand into the car business with the acquisition of British lightweight car builder Caterham in 2011. The company, known for its open-top two-seat cars, has continued to operate for Tune since the investment by the Malaysian millionaire and currently makes seven variants of its iconic Seven vehicle lineup from its shop in Crawley, England.
Outside of acquiring the car manufacturer, Fernandes wanted to promote his car racing team and using his 2010 investment in Lotus Racing would allow him to rebrand the team to Caterham F1. The cars would feature the Lotus green and yellow livery from previous years and start wearing the Air Asia logo for sponsorship.
Eventually, the team would land sponsorship from other brands such as General Electric and Airbus. Despite luring in sponsors, the team was unsuccessful in the end, failing to score a point before entering administration late in the 2014 calendar season.
Behind the partially hidden Eva Air globe that can be seen on aircraft tails across the world, the full logo of parent company Evergreen Group can be seen on other containers not far from those airfields. The airline is the smaller part of the Taiwanese company whose primary branch is that of Evergreen Marine Corporation which specializes in container cargo operations.
The sea-going container company predates the 1989 founded airline with cargo operations starting in Taiwan in 1961 by Chung Yung-Fa. Evergreen would start with a single ship and started on a free-roaming concept of just getting goods to any port at any time. Eventually, the brand would expand and a more structured sea-going route map would form, leading to the containerization of its cargo fleet in the 1970s as the company pushed for ways of moving foreign products more efficiently.
According to a 2018 United Nations Conference on Trade and Development report, Evergreen is the seventh-largest liner shipping company and the third-largest in Asia behind China Ocean Shipping Company and Ocean Network Express. The UN report states that the Taiwanese company has a combined leased and owned fleet of 200 ships and 1.1 million 20-foot equivalent container units, accounting for 4.4 percent of the container shipping market share. Much like HNA Group’s Seaco, Evergreen’s containers come in various forms for dry goods and refrigerated materials.
At one point, the container industry was tied closer to airlines, with brands like Germany’s Hapag-Lloyd and Denmark’s Maersk both operating airlines that would disappear in 2005 and 2007, respectively. Meanwhile, the South Korean family-owned conglomerate, or chaebol, of Korean Air would see the opposite, with shipping arm Hanjin Shipping Co. Ltd. collapsing in 2017 after taking on years of debt during the global recession.
While Korean Air’s chaebol has had its issues with branching into cargo, its low-cost carrier found a different level of success in the e-sports scene. The company had taken a stake in the Eat Sleep Game and Hoon Good Day teams before merging them into the new team titled the Jin Air Green Wings in 2015.
At the time, owning or sponsoring an e-sports team was an increasing incentive for brands as the Jin Air squad was competing against other marketed teams bearing company names like SK Telecom T1 and Samsung Galaxy.
As of 2019, Jin Air competes in two different Korean leagues as a competitive member in Blizzard Entertainment’s Starcraft II: Wings of Liberty and Riot Games’ League of Legends. Being an aviation brand, the company tends to rotate between professional and aviation-themed attire, with players wearing items ranging from button-down shirts to bomber jackets on stage.
The two teams have had a wide variety of success under the Jin Air name. Individuals on the Starcraft II squad have made Global Finals in Anaheim including a semifinals appearance last year with Kim “sOs” Yoo Jin and both Cho “Trap” Sung Ho and Cho “Maru” Seong Ju already qualifying for the 16-man finals bracket to be played this fall.
However, the League of Legends team has struggled, never qualifying for the League of Legends World Championship and in 2019, hit an all-time low record of 1-35 between the spring and summer splits. After the disastrous season and a 3-0 defeat to up and coming Hanwha Life Esports, Jin Air Green Wings’ League of Legends team was relegated to Challengers Korea, the second-tier league in South Korea.
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