Olympics partly to blame for Virgin Atlantic’s deepening losses

Virgin Atlantic, a UK-based airline, has partly blamed the 2012 London Olympic Games for its latest reported losses.

Sir Richard Branson’s company has reported a loss of £93 million for the last financial year, adding to the £80 million deficit that it reported for the previous year. The airline’s new chief executive, Craig Kreeger, said that a dent in business travel that was partly due to the effect of the Olympic games had impacted on the figures, although he was optimistic for the future, forecasting a return to profitability for the company within two years.

Kreeger said, ‘Last year saw a double dip recession, a continued weak macro economy, and an Olympic Games which, although a fantastic event, severely dented demand for business travel. Despite these challenging circumstances, the enduring strength of the Virgin Atlantic brand has not wavered – we have increased our revenues, our load factors, and carried many more passengers than the previous year.

I am confident we have concrete plans in place to take Virgin Atlantic forward and return the business to profitability within a two-year time frame. The commitment of our staff and loyal customer base is not to be overlooked and as a brand with high advocacy we will continue to innovate and inspire in true Virgin spirit.’

The group’s revenue did see an increase of 5 percent, to £2.87 billion, and it registered a 3.5 percent increase in passenger numbers to 5.5 million.

Virgin Atlantic is implementing a number of measures to reverse its fortunes, including the recent launch of new domestic airline, Little Red, and cuts to its administrative operations.

Norwegian and Virgin in Dreamliner cooperation

Norwegian Air, a Norway-based low-cost airline, has signed a memorandum of understanding with UK-based airline and transatlantic specialist, Virgin Atlantic.

The agreement between the two airlines is intended to be of mutual benefit, with Norwegian’s long-haul pilots being granted access to Virgin Atlantic’s extensive long-haul knowledge, and Virgin benefiting from the use of Norwegian’s brand new Boeing 787-8 Dreamliner for its instructors to receive pilot training.

The agreement means that Virgin Atlantic’s pilots will be able to gain experience on the new aircraft prior to the delivery of its first Dreamliner in September 2014.

Torstein Hoas, Norwegian Long Haul director of flight operations, said, ‘Introducing a new aircraft type to an airline is an extensive affair. It is therefore important that we learn from each other. Virgin Atlantic is a successful long-haul airline with almost 30 years of Trans-Atlantic experience. It will be very beneficial for us to receive this support. At the same time, we are looking forward to helping Virgin Atlantic introduce the 787 Dreamliner to its fleet. The cooperation will be a great advantage to both parties.’

The general manager of flight operations at Virgin Atlantic, captain Dave Kistruck, commented, ‘Virgin Atlantic are delighted to announce our training partnership with Norwegian. Our combined experience is being effectively utilised to ensure the safe and efficient introduction of the Boeing 787 aircraft to our fleet. We have much in common with Norwegian, having similar high quality training requirements, which has allowed our partnership to take shape.’

Virgin Atlantic’s order is for the slightly larger 787-9 Dreamliner.

Couture in the clouds, Vivienne Westwood redesigns Virgin Atlantic uniform

Vivienne Westwood, the fashion designer whose imaginative and sometimes controversial creations have been raising eyebrows for the last four decades, is teaming up with UK-based Virgin Atlantic airline to redesign the company’s air stewardess uniform.

Even at 71 years of age, the fashion designer’s creative flair continues to attract the rich and famous to her studio, and now Virgin Atlantic boss Sir Richard Branson has entrusted her with the image that his cabin crew will portray for the next few years.

The airline’s stewardesses will still be adorned in the distinctive shade of red that has become part of the company’s brand image, but according to the Daily Mail, Westwood’s take will reference 40’s couture cuts. The suit will be drawn in at the waist and have double pleats to provide a feminine silhouette. The male crewmembers will not be excluded from the fashion evolution, and will be attired in burgundy-coloured Saville Row suits.

Richard Branson was quoted in the Mail, saying, ‘Virgin Atlantic has a distinct spirit and from a design perspective we continually try to challenge the norm and stand out from the crowd. Our current uniform has been around for more than 10 years and we have seen other airlines start to copy it. When we were choosing the designer for this project, we wanted to work with a group of people who share our spirit of adventure, who believe in challenging the status quo and creating something truly memorable.’

The new uniforms will be issued to all 7,500 of Virgin’s cabin crew, Clubhouse staff and Virgin Holidays employees, and they will initially be introduced for a trial period from July this year.

Branson slates governments’ terror travel advice

Sir Richard Branson, head of the Virgin Group, which includes Virgin Atlantic airline, has spoken out against what he sees as heavy-handed advice to travellers from Western governments regarding destinations that have suffered acts of terrorism.

According to Branson, advising travellers to stay away from such destinations hands victory to the terrorists, and he wants to see such advice banned. Bali is among the tourist destinations that he believes has suffered an undue decline in its tourism following advice that was issued by Western governments in the wake of a terrorist bombing there in 2002 that caused the death of 202 people.

Commenting in The Independent newspaper, he said: ‘Terrorists put bombs in a Bali nightclub – then for the next 10 years Bali’s economy has been ruined because travel advisories stop tourists from travelling there.’

His concern is not only for the economies of the countries that are affected by a reduction in tourism, but also for the knock-on effect that it has on companies like his own. Using the recent Kenya kidnapping incidents as an example he continued to comment, ‘Terrorists carried out a kidnapping in Kenya – and the US Department of State, by including the word ‘warning’ in their travel advisory, has effectively negated all insurance, devastating industries from tourism to film, and even contributed to making it uneconomical for Virgin Atlantic to continue flying there.’

The Virgin boss then contrasted the reaction to these overseas incidents with acts of terrorism that have occurred in the UK and USA, saying, ‘Governments and people show 100 per cent support and sympathy, as they rightly should…After 7/7, visitors continued to flock in (to London).’

The UK Foreign Office responded by saying that there was a high public demand for travel advice and that the safety of British Nationals abroad was the main motivation for issuing such warnings.

A spokesman at the Foreign Office said, ‘The safety of British Nationals will always be our utmost priority and we have a responsibility to make sure British nationals have the necessary information and advice so that they can make their own choices about foreign travel. We know there is a demand from the public for advice about threats to their safety and security and we would rightly be criticised if UK lives were lost and we had not reflected a known terrorist threat in our travel advice. We rarely advise against travel to a country due to the threat from terrorism. We do so only if we judge that the threat is sufficiently specific, large-scale or endemic to affect British nationals severely.’

Virgin Atlantic reacts to losses with pay freeze

The new chief executive of Virgin Atlantic, a UK-based air carrier, has imposed an immediate pay freeze at the company in reaction to the expectation of large annual losses, according to a report in the Sunday Times.

An internal memo that has been seen by the newspaper shows that recently appointed executive, Craig Kreeger, has reacted swiftly to the airline’s expected record annual losses of £135 million. With reference to Virgin Atlantic’s financial performance, the memo reportedly said that it is ‘well behind where we anticipated.’ The predicted loss will follow a deficit of £80.2 million that the company reported last year.

The airline employs 9,000 staff that will be subject to the freeze, and while no job losses have yet been announced, the option is unlikely to be discounted as the company endeavours to balance its books.

Virgin Atlantic has apparently confirmed the detail of Kreeger’s memo, which talks of a cost-cutting plan in addition to the pay freeze. The company has already implemented plans to save £40 million and take an extra £50 million in long-haul revenues, but Kreeger has decided that these actions alone are unlikely to turn its finances around.

‘The 2012-13 financial airline performance will be a significant loss. Two years of significant cash losses have depleted our resources and decreased our ability to invest,’ Kreeger said, and expanding on his pronouncement that the company would have to make ‘some tough calls,’ he added, ‘One of those decisions is to recognise and communicate the reality that we cannot afford any pay increases this year. It is not ideal that this is the first big decision I have to take.’

Virgin is introducing more fuel-efficient aircraft, introducing a new UK domestic airline, Little Red, and has formed a partnership with US-based Delta Airlines to help it compete with the BritishAirways/American Airlines alliance on transatlantic routes.

Virgin Atlantic Announces Alliance with Delta Air Lines

Virgin Atlantic, an airline subsidiary of UK-based Virgin Group, has entered into a joint venture with US based Delta Air Lines, for an expanded trans-Atlantic network.

As part of the agreement Delta will be investing £223 million in Virgin Atlantic to acquire a 49% equity stock in the airline, currently held by Singapore airlines. The majority stake in the airline will be retained by Virgin Group and Sir Richard Branson.

Steve Ridgway, the chief executive of Virgin Atlantic, said, ‘Consumers will reap the rewards of this partnership between two great airline brands on services from the UK to the USA, Canada and Mexico through a shared ethos in the highest standards of customer service. This joint venture will deliver much more effective competition at Heathrow.

Both airlines are confident that the Department of Transportation will be as convinced as we are of the extensive consumer benefits arising from this joint venture, with expedited approval being granted by the end of 2013.

The trans-Atlantic market is Virgin Atlantic’s heartland – it’s where we started. By aligning with Delta we can continue to grow our North American network and offer greatly enhanced connectivity across the USA.’

The new trans-Atlantic network will be offering 31 round-trip flights between UK and North America with a combined total of nine daily round-trip flights from London Heathrow Airport, in UK, to John F Kennedy International Airport and Newark Liberty International Airport in US.

Delta chief executive officer, Richard Anderson, said, ‘Our new partnership with Virgin Atlantic will strengthen both airlines and provide a more effective competitor between North America and the U.K., particularly on the New York-London route, which is the largest airline route between the U.S. and Europe.

By combining the strengths of our two companies in a joint venture, we can provide customers with a seamless network between North America and the U.K., and continue building a better airline for our customers, employees and shareholders.’

Virgin Atlantic Acquires BMI’s Heathrow slots

Virgin Atlantic, an airline subsidiary of UK-based Virgin Group, has acquired the London Heathrow Airport slots that were recently vacated by British Midland International (Bmi) airline, following Bmi’s acquisition by IAG, the parent company of British Airlines.

Virgin Atlantic has acquired all 12 of the available slots at London Heathrow Airport and will be using them to offer short distance flights to Scotland.

The airline chief executive officer, Steve Ridgway, said, ‘We have fought hard for the right to fly short haul and take a strong challenge to British Airways within these shores. For 28 years both airlines have battled for customers all over the world and it has meant that British consumers have ultimately had some of the world’s best flying and lowest fares.

This is the beginning of an exciting new era in Virgin Atlantic history and we now feel a responsibility to everyone that has supported us in this challenge.

Passengers can look forward to a great short haul service with us but most importantly reap the benefits from the re-injection of vital competition we can provide on these routes.’

The airline intends to offer its expanded operations to Scotland from March 2013, with a focus on the Edinburgh and Aberdeen routes that were previously served by Bmi. By offering to fly around 700,000 passengers every year from Scotland to London, Virgin Atlantic is offering competition to British Airways, which currently has a monopoly on the routes.

Ridgeway said, ‘Virgin Atlantic is totally committed to providing a competitive price and choice for passengers flying from Scotland to Heathrow and beyond.

At least 1.8 million Scottish passengers, equivalent to a third of the population, have been left without a choice on these routes since IAG’s takeover of bmi. As a monopoly operator, BA has the opportunity, the incentive and the means to increase fares and reduce the number of flights available.

As we shook up the status-quo in long haul travel nearly 30 years ago, we’re now doing all we can to have the same decisive impact on the short haul market. Our aim is to reach a significant new base of both direct and connecting passengers, and in doing so we intend to bring our award-winning service, competitive prices and greater choice to the Scottish travelling public.’

Rival airlines unite for report on APD

Four major airlines in the UK have set aside their business rivalry and have jointly commissioned a survey into Air Passenger Duty and its impact on the country’s economy.

The four companies, British Airways, Virgin Atlantic, Ryanair and Easyjet first came together under the ‘Axe the Tax’ slogan last year, but have now stepped up their campaign by appointing Pricewaterhouse Coopers, a UK accountancy firm, to investigate the economic effects of the increased duty on the British economy.

The airline industry in the UK is unanimous in its condemnation of the tax, which increased by 8 percent at the beginning of the 2012 financial year in April, and is scheduled for a further increase in 2013. Via its ‘Fair Tax on Flying’ initiative, the industry is urging people to use its website to contact their MP’s and register their disapproval of the increases. The initial target is for 100,000 respondents to the petition, with over 90,000 having already taken a few seconds to complete the on-line e-mail template.

Responding to the numbers of new supporters that the fight against Air Passenger Duty has been gaining, including many trade associations and business groups, the chief executive of the British Air Transport Association, Simon Buck, commented: ‘It is great news to see more supporters joining the campaign. It is now clear that we are drawing support from businesses across all regions of the UK as well as the tourism industry. It is time for the chancellor to listen to what we are saying.’

Travellers Say No to Use of Mobile Phones during Flights

Air travellers have expressed their rejection for use of mobile phones in flights, says a recent survey conducted by a UK-based flight comparison site, Skyscanner.

Around 86 percent of those polled said that it is ‘annoying to have to listen to other people’s conversations’, while only a small minority, of 1 percent of respondents, said that they are willing to pay more for seats in airlines which offer mobile calls.

Virgin Atlantic, an airline subsidiary of UK-based Virgin Group, is the first airline based in the UK to offer mobile phone calls during its flights from London to New York, US. The airline has priced the calls at GBP1.00 per minute, while text messages will be charged at GBP0.20 per message. The airline is yet to launch the service.

The Skyscanner travel editor, Sam Baldwin, said, ‘In a world where we are now almost always ‘on call’, it seems people don’t want to say good-bye to their last sanctuary of non-connectivity. Flying allows us to switch off for a few hours, both from our own calls, and other people’s. However, Virgin’s move into onboard mobile is the beginning of the end of the no-phone zone. I think it’s inevitable that within a few years, making mobile calls at 30,000 feet will be commonplace on all airlines.’

The recent survey also highlighted that if mobile phone use is made available in-flight, around 48 percent will be keen to send texts, 35 percent will use it to surf the Internet, 10 percent will send emails, and only 6 percent will be keen to make or receive calls.

Virgin Atlantic to End Kenya Flights

Virgin Atlantic, a UK-based airline company, is to end all of its services between London and Kenya from September this year.

The London to Kenya service, which has been in operation for the last five years, is being axed due to rising fuel costs and falling passenger numbers, according to Virgin Atlantic’s president, Sir Richard Branson. However, it has been confirmed that customers who have already booked flights with the airline after the September 23 deadline outbound, and the final return from Nairobi the following day, will be given a full refund or moved to an alternative carrier.

Alternative airline options for passengers to Nairobi include British Airways, KLM, Emirates and Air France.

Commenting on his company’s decision to axe the Kenya flights, Sir Richard Branson said that he was saddened by the decision and added, ‘A combination of record fuel prices, higher and higher taxes imposed by the Government and a poorly timed slot not providing connections from London, have made it uneconomical to fly from Nairobi. Governments must be more realistic about the aviation taxes they impose and we urgently need to increase capacity at Heathrow.’

In addition to fuel costs, which have increased by 50 percent in the last five years, and an increase in Air Passenger Duty of 100 percent, civil unrest in the country and high-profile kidnapping cases have further hit Kenya’s tourism, with a subsequent reduction in air traffic.

Virgin Atlantic will be replacing the axed flights with new flights to Mumbai in India and an additional flight to New York from the autumn.