In just over two decades, Virgin Australia has emerged as Australia's third-largest airline. But it has been a tumultuous two decades with the airline rising, falling, and rising again. Nowadays, Virgin Australia is powering up for a big future as the dust starts to settle on a near two-year travel downturn.

A cheap and cheerful startup formerly known as Virgin Blue

Virgin Australia began flying in August 2000, initially known as Virgin Blue. In the early years, Virgin Blue was a cheap and cheerful low-cost carrier that received an unexpected boost when Ansett Australia spectacularly collapsed in 2001. Since then, the airline has morphed into something different - first a full-service airline and now a mid-market airline.

In those early days, with their fleet of red Boeing 737s, Virgin Blue operated out of demountable buildings and the furthest corners of terminals at Australia's airports. Initially, the airline was flying leased Boeing 737-400s, but within a few years was replacing them with more modern 737-800s. The 737-800 has been the backbone of the Virgin Blue/Australia fleet ever since.

Virgin Blue received some serious uplift in the mid-2000s when a major Australian logistics business took a majority interest. That helped turbocharge the airline's growth. New planes were ordered, including Embraer regional jets. In 2008, an international spin-off airline was created, V Australia. That airline commenced flying to Los Angeles in 2009 using Boeing 777-300ER aircraft.

A name change to Virgin Australia and a move upmarket

Virgin Australia's founder and CEO Brett Godfrey stepped down in 2010 to be replaced by Qantas alumni John Borghetti. Mr Borghetti famously lost out on the top job at Qantas to Alan Joyce. Soon after, John Borghetti settled into the hot seat at Virgin Australia determined to take on Qantas and win.

Mr Borghetti's tenure marked a turning point for the airline. He rebranded Virgin Blue and V Australia as Virgin Australia and ditched the low-cost model going head-to-head with Qantas as a full-service airline.

Many say that's when the rot set in at Virgin Australia. They chased market share at any cost. Virgin Australia was a very nice airline to fly on. Its business class product on its widebody Airbus A330 and Boeing 777 aircraft was amazing. The airline had nice lounges, decent frequencies, and well-maintained planes but failed to make serious inroads into Qantas' market share.

What Virgin Australia did do was lose money and incur debt. Other than the successful Los Angeles flights, Virgin Australia struggled with its international network. At home, Virgin Australia's operating costs were high, including some notoriously exorbitant aircraft leases.

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Virgin Australia collapse, restructuring, sale, & future prospects

In 2019, Paul Scurrah took over from John Borgetti. Mr Scurrah, a well-regarded former rail and logistics boss, set about overhauling the airline and attempting to get it back onto a sound financial footing.

The following year, COVID-19 struck. It proved a fatal blow for already struggling Virgin Australia. In April 2020, Mr Scurrah put the airline into voluntary administration. At the time, there were widespread doubts Virgin Australia would ever fly again.

But the administrators sold the airline to US private equity interests. They overhauled the airline, got rid of much of the debt, sent planes back to lessors, slashed jobs, and managed to get the airline back into the air as a far leaner operation.

Buffeted by border closures and travel restrictions, Virgin Australia has struggled to get traction since then. However, since mid-2021, the airline has made a concerted effort to rebuild its network and upsize its fleet. They've also overhauled the inflight product and fare structure, generally to good reviews.

After a turbulent two decades, Virgin Australia is on the upswing again. It has stopped trying to chase Qantas and that can only be a good thing. And as the relaunched Virgin Australia settles down, local observers are becoming increasingly confident about its future.