Sir Richard Branson said that a possible tie-up with Air France-KLM to boost its services in Europe and the Middle East “makes sense”.
“We’ll see whether something comes from it,” said Virgin Atlantic’s founder and chairman when asked about the possibility of a tie-up with Air France-KLM during the launch of Virgin’s new domestic service Little Red earlier this week.
“But the most important thing right now is for us to get the Delta deal through,” added Branson. “That’s going through its due process and once that’s happened I wouldn’t be at all surprised if we had some discussions.”
Virgin Atlantic and Delta have this week filed an application for antitrust immunity with the US Department of Transportation, ahead of their proposed joint venture on flights between the US and the UK.
Craig Kreeger, the airline’s new chief executive – who took the helm in February after 27 years at American Airlines – said: “From the UK perspective, it offers a whole new set of destinations and frequencies to places we don’t fly to or fly to infrequently, by connecting our network to Delta’s network in the US.
“Delta is, as of now, the largest airline in the US – in the Americas – and we’re suddenly going to have connections for our customers where they will be able to earn frequent flyer miles in our programme, their corporate relationship with us will apply on to the network that Delta flies, and they’ll have lounge access and enhanced connectivity as we work together with Delta to make that as seamless as possible.
“But equally important for Virgin Atlantic is that from the US perspective we suddenly now have access to Delta’s frequent flyers, Delta’s corporate relationships, Delta’s travel agency relationships, and Delta is really excited about being able to offer our service to their customers, because they think that’s going to take them off other alliances and other airlines and move them on to us and Delta.”
He added: “Delta has been very clear in all of my conversations with them that what they are really excited about is our service to Heathrow, but that it remains Virgin Atlantic service to Heathrow, that it is a product they believe they will be able to sell effectively to their customers.
“For us, that’s a whole new source of potential customers and will also diversify us away from a large reliance on the British economy, which has not been a great thing to be relying upon in the past couple of years.”
Kreeger confirmed that the airline would consider a further joint venture with Air France-KLM – like Delta, a member of the Skyteam alliance.
“What I would say is that our first priority is executing the Delta relationship as excellently [as we can], and at the right time we will evaluate whether Air France-KLM – or, in fact, a broader relationship with Skyteam – makes sense. We haven’t made those decisions yet, nor have we begun the evaluation of them.”
Sourced by bbt
By Robin Searle
Delivery of Boeing’s troubled 787 aircraft will be crucial to Virgin Atlantic’s aim of returning to profitability by 2015, according to the airline’s president Sir Richard Branson.
Speaking to Travel Weekly during the inaugural celebrations for Virgin’s domestic offshoot Little Red in Edinburgh, Branson said he felt the target was viable and dependent on the integration of more cost-effective aircraft.
“As long as the 787s don’t get delayed again, there is every chance that it can be possible,” he said.
Virgin is due to take delivery of Boeing’s 787 Dreamliner in late summer 2014 as part of a wider fleet overhaul. It also hopes to boost revenue with the launch of Little Red services from Heathrow to Edinburgh, Aberdeen and Manchester and through an expected tie-up with Delta Air Lines in the US.
Virgin’s new chief executive Craig Kreeger believes the airline can transform a loss, expected to be about £130 million for the financial year to February 2013, into a profit within two years.
“(To return to profit) our strategy includes trying to find new sources of revenue, and that includes creating connectivity through Little Red and through the relationship with Delta,” said Kreeger.
“We have made some tough decisions, including a pay freeze for staff, but we have to ensure that no decisions are made at the expense of the customer or our people.”
The two airlines filed an application with the US Department of Transportation seeking antitrust immunity for their joint venture this week.
Speaking about the appointment of former American Airlines executive Kreeger, Branson said: “Craig has a lot of experience in the States, and through the Delta deal the States is going to play a bigger and bigger role in Virgin Atlantic’s future.”
Sourced from Travel Weekly
By Robin Searle
Virgin Atlantic’s new short-haul airline Little Red will be able to compete with British Airways despite lower frequencies and the need to transfer between terminals at Heathrow, its new chief executive insists.
Speaking at the launch of Little Red services in Edinburgh, Craig Kreeger said he was confident available flight times “covered the day very well” and new transfers between terminals would ensure the change would not be off-putting for customers.
Little Red services currently fly in to Terminal One, while long-haul services depart from Terminal Three. If a proposed tie-up with Delta is approved as expected, that will mean more flights operating from different terminals, with Delta flying from Terminal Four.
While admitting that Virgin would be talking to Heathrow bosses about relocating Little Red services to Terminal Three to ease the process, Kreeger said he was confident the completely airside bus transfer would not be off-putting for customers.
“I have tried it myself and the whole process took under 20 minutes,” he said.
“I am confident (about competing with British Airways) and I am confident we will be chosen time and again by those that give us a try.”
Virgin Atlantic president Richard Branson said that the airline had “had its hands tied for 30 years” by not having sufficient slots at Heathrow to offer its own connecting flights to regional airports.
But he said the launch of Little Red flights to Manchester, Edinburgh and Aberdeen would bring in new passengers and generate repeat business.
“Due to BMI’s demise a few crumbs came off the table, and we hope to put those crumbs to good use,” he said.
“It will offer some proper competition to BA on those routes and, more importantly, on all the routes which Virgin Atlantic flies.”
Sourced from Travel Weekly
“I’ve been saying for 30 years that we need more runway space and we need a government that is brave enough to make a decision and get on with it,” he said.
“We should get at least two (additional runways) built at Heathrow as fast as possible while thinking about other options to the west and east.”
Branson said the current “stagnation”, with Heathrow operating the same number of runways as during the second world war, was “holding Great Britain back”.
He added: “It should be funded by private enterprise, so it is not as if the government should have to put its hand in its pocket.
“The contribution to GDP would be enormous, and in itself could pull a country out of recession.”
New Virgin Atlantic chief executive Craig Kreeger, who joined the company from American Airlines, said a number of other European countries had been more forward thinking in recognising the economic benefits of developing improved airport facilities.
A decision on airport capacity has been deferred pending the findings of the Davies Commission, which is not due to report in full until 2015.
Sourced from Travel Weekly
By Natalie Thomas
British Airways and Iberia boss Willie Walsh said he would be happy to wager Sir Richard Branson a “knee in the groin” that Virgin Atlantic won’t exist in its current form in five years’ time.
The aviation boss, who is chief executive of International Airlines Group (IAG), was responding to a challenge by Sir Richard that he would pay BA staff £1m if the Virgin Atlantic brand name has disappeared in five years’ time.
A public spat broke out between the two rivals after Mr Walsh suggested earlier this week that the Virgin Atlantic brand would be consigned to the history books if US giant Delta buys a 49pc stake in the carrier set up by Sir Richard in 1984.
The furious Virgin chief responded by challenging Mr Walsh to a £1m wager.
Speaking in Seoul, where BA has launched its latest route, Mr Walsh said he did not respect the British entrepreneur “in the way I respect other people in the industry”.
He suggested a £1m wager would not be fair as Sir Richard is a “billionaire banker”.
“I don’t think a million pounds would hurt him, I don’t have a million pounds so maybe a bet that would be as painful to him as it might be to me – so maybe something like a knee in the groin,” Mr Walsh said.
The IAG chief said he didn’t know Sir Richard very well but “on the limited occasions” he had met him he hasn’t seen anything that would “make me want to meet him again”.
“I just don’t see that the guy has anything that stands out in terms of what he has achieved in the industry,” Mr Walsh said. “I’ve said it publicly, I don’t respect him in the way I respect other people in the industry and that’s a personal view.”
Mr Walsh did, however, praise Steve Ridgway, Virgin Atlantic’s outgoing chief executive.
Delta is in talks with Singapore Airlines about buying its 49pc stake in Virgin. Negotiations could come to a head as early as this week although there is no certainty a deal will come off.
Sir Richard said in a blog yesterday: “Rumours have been spread in the press that I am planning to give up control of Virgin Atlantic and, according to Willie Walsh – who runs BA – that our brand will soon disappear. This is wishful thinking and totally misguided. Will BA never learn?”
Sourced by The Telegraph
The news that SkyTeam member Delta Air Lines is reported to be interested in acquiring Singapore Airlines’ 49% stake in Virgin Atlantic has led to speculation that Sir Richard Branson may relinquish control of the airline which he set up nearly 30 years ago, and in which he still has a 51% share.
Virgin Atlantic’s long-term future has been uncertain since Branson appointed Deutsche Bank in 2010 to explore future strategy options. The announcement back in September that the airline’s long-time chief executive Steve Ridgway will step down next March has added further to speculation about the airline’s future strategy.
Even if Virgin Atlantic joined SkyTeam it would remain the smallest of the three global alliances at Heathrow
Of the three global alliances SkyTeam (whose members also include Aeroflot, Air France, Alitalia, KLM and Saudia) has by far the least presence at London Heathrow airport with just over 6% of weekly seat capacity this summer. Of the SkyTeam carriers at Heathrow Delta is the biggest in terms of seat capacity offering on average nine daily flights spread across five of its US hubs; Atlanta, Boston, Detroit, New York JFK and Minneapolis/St. Paul. Of these destinations Virgin Atlantic also serves Boston and New York JFK. Virgin Atlantic is currently the biggest non-alliance airline operating at Heathrow with around 5.5% of seat capacity. If Virgin Atlantic were to join the SkyTeam alliance they would then have about 12% of Heathrow capacity. Once Virgin Atlantic begins its UK domestic services next year this share is likely to rise still further.
In comparison the Star Alliance carriers (which include Air Canada, Lufthansa, SAS, Singapore Airlines, Swiss, Turkish Airlines and United) have a combined market share of just under 20%, with Lufthansa and United having the largest individual shares. The oneworld alliance which British Airways belongs to (as well as American Airlines, Cathay Pacific and Qantas) accounts for just under 55% of seat capacity at Heathrow, aided by the recent acquisition of bmi British Midland which, as a subsidiary of Lufthansa, was part of the Star Alliance.
BA’s London – US capacity would still be 50% bigger than a Delta/Virgin alliance
British Airways currently has around 40% of the London – US market in terms of weekly seats, operating 40 non-stop flights per day this summer from London to 20 US airports, 18 of them from Heathrow plus Orlando and Tampa from Gatwick. American Airlines, United and Virgin Atlantic offer similar capacities from Heathrow. However, in addition to serving eight destinations (Boston, Chicago O’Hare, Los Angeles, Newark, Miami, New York JFK, San Francisco, and Washington Dulles) non-stop from Heathrow, Virgin also serves Las Vegas and Orlando from Gatwick. Combining Virgin and Delta’s seat capacities would result in a 27% share of the current London-US market, still significantly smaller than British Airways’ share.
Virgin’s financial position not helped by dominance of four-engined aircraft in fleet
Virgin Atlantic reported a pre-tax loss of £80m in the financial year ending March 2012, not helped by the high price of aviation fuel, which has hit the airline particularly hard as three-quarters of its 44-strong fleet of long-haul aircraft are four-engined Boeing 747s and Airbus A340s. The acquisition during the last two years of 10 twin-engined Airbus A330s will definitely help but no further new aircraft are expected now until the first of the airline’s 15 ordered Boeing 787-900s start being delivered in 2014.
Sourced from TTG Digital
Virgin Atlantic founder Sir Richard Branson is unlikely to relinquish control of the airline as part of any deal by Singapore Airlines to offload its holding.
The disclosure came from the carrier’s chief executive Steve Ridgway amid speculation that Delta Air Lines is considering a bid for SIA’s 49% shareholding, with European partner Air France-KLM also lined up for a stake
Ridgway told news agency Bloomberg after SIA confirmed that it may dispose of its shareholding: “He [Branson] is the majority shareholder.
“What they said today, it’s about Singapore selling some or all of their stake.”
SIA is looking to focus on local markets where opportunities are opening up at the same time that Gulf carriers Emirates, Qatar Airways and Etihad Airways present new challenges, Ridgway said.
“India has opened up, China has opened up and there are three fearsome competitors on their western side,” he said.
“That’s what their agenda is about. I’ve got to leave it to Singapore now, they’ve made that stock-exchange announcement and we just need to let them work that through.”
Virgin Atlantic is “well down the road” in choosing a new chief executive, he said, adding that the aim is to make an announcement before Christmas or slightly after and that candidates will not be put off by the possibility of a new investor.
“All these things are about opportunities,” Ridgway said. “If there is a good opportunity there the job remains as attractive as it is today.”
Sourced from Travel Weekly
By Sophie Griffiths
Virgin Atlantic is to start flying from Heathrow to Manchester airport from March 2013, the airline revealed this morning.
The route is designed to provide competition to British Airways short haul service, and is Virgin’s first foray into domestic flying.
Richard Branson’s airline is planning to apply or all of the remedy slots being awarded by the European Commission following the IAG takeover of bmi, but is using some of its existing slots to service the Manchester to London route.
Virgin said it believed competition on this route had been neglected in the remedy process, and said it was aiming to provide choice for the 650,000 passengers who travel between the two cities.
Commenting, Virgin Atlantic chief executive, Steve Ridgway said: “Flying between Heathrow and Manchester is just the start for Virgin Atlantic’s new short haul operation. We have the means to connect thousands of passengers to our long haul network as well as to destinations served by other carriers.
“Our new service will provide strong competition to omnipresent BA; keep fares low and give consumers a genuine choice of airline to fly to Heathrow and beyond.”
Ken O’Toole, chief commercial officer at Manchester Airports Group added: “We are pleased to see Virgin Atlantic increasing their presence in Manchester and to see competition returning on the London route, as that will be to the benefit of passengers flying from our airport.”
Virgin will operate three daily flights to Manchester using Airbus A319 aircraft from March 31 2013.
Tickets are available from today.
Sourced from TTG Digital
Sir Richard Branson has promised “massive expansion” by Virgin Atlantic if the government performs a U-turn and Heathrow gets a third runway.
The Virgin Atlantic president said lack of slots at Heathrow was holding the airline back. Branson said: “We are so constrained at Heathrow. There are so many routes we would like to fly.
“The only thing we can do is hope for a third runway, hope that the politicans realise this is damaging the UK. Then we would do a massive expansion.”
Branson said: “Lack of airport capacity is holding back this country more than anything. In the last 10 years we have put on 200 aircraft in America and Australia. Yet Virgin Atlantic has only been able to get 38 aircraft in 27 years.
“We are not flying to South America. We’re not flying to Russia. It is because we can’t get the slots.”
Branson insisted Virgin Atlantic’s expansion was not held back by lack of cash despite a lengthy search for a new investment partner. The carrier remains 49%-owned by Singapore Airlines, which indicated some time ago it was prepared to sell.
He told Travel Weekly: “We are a fussy bride. But we are working well with Singapore Airlines. We have a great relationship. I don’t think there will be any changes there.”
Branson said Virgin’s search for partners “is more about buidling new network connections”. He pledged: “There will be further announcements on that.”
The Virgin president blamed the recently announced end to services to Kenya on constraints at Heathrow, saying: “It is another slot issue. If we had the right slots [allowing connections onwards from Heathrow] we could have kept the route going.”
He said: “The government has boxed itself in on Heathrow. [But] we should at least have one runway built.
“Planes are getting quieter. A lot of noise that Heathrow gets at the moment is from planes going round and round waiting to land. Some of that would go away if we had a third runway. You could have very strict rules on noise and we would support that.
“The thing that wakes people up are dirty, noisy planes and they should not be allowed into Heathrow.”
Branson also hit out at the government over Air Passenger Duty (APD), calling the tax “unacceptable”. He said: “We have asked the government to undertake a report on the impact of the tax. If they won’t, we will get on with it ourselves.
“The taxman is squeezing the industry and squeezing individuals who want to fly. When Freddie Laker started [Laker Airways] he talked about enabling people to fly who have never been able to afford it. Now the taxman is making it difficult for the average person to go on holiday. We have to fight hard to get APD reduced.”
Laker Airways pioneered budget transatlantic flights in the late 1970s following a long battle with the authorities.
Virgin Atlantic launched its second route to Canada at the end of last week with an inaugural flight to Vancouver.
Sourced from Travel Weekly