Virgin Atlantic has launched a new TV advertising campaign under the banner of “Depart The Everyday”.
Filmed in a mock-up Virgin Atlantic aircraft cabin, you see passengers depart a dreary and overcast UK and enter into a surrealist world in all three cabins at 38,000 feet.
The aircraft hold is a ball pool. Passengers dance on the ceiling. The air vents dispense rainbow ice cream. Of course, no Virgin Atlantic TV advertisement would be complete without a shot of its signature Upper Class bar and suite. It exudes Virgin Atlantic’s characteristic self-confidence.
Virgin Atlantic & Virgin Group have today, Monday 20 August 2018, announced they are to launch a new group loyalty programme in 2019.
At present, Virgin Group and Virgin Atlantic have separate loyalty programmes. Virgin Group operates Virgin Red which issues points for customers of numerous Virgin branded businesses. The rewards are relatively modest, such as free WiFi on Virgin Trains. Virgin Atlantic also operates its own frequent flyer programme Virgin Flying Club.
In 2019, Virgin Atlantic and Virgin Group will launch a new, and as yet unnamed, programme. It will adopt Virgin Flying Club miles as its currency.
The New Programme
Details of the new programme are scant at the moment. Virgin Atlantic has provided a brief update for its Flying Club members.
Delta and Virgin Atlantic have operated a joint-venture between the UK and USA since 2013 and wish to combine this with Delta’s joint-venture with Air France-KLM. Delta owns 49% of Virgin Atlantic. When the joint-venture completes, Air France KLM will acquire a stake in Virgin Atlantic from Virgin Group, making Delta the single largest shareholder.
– The airlines have expressed a desire to co-locate at London Heathrow. Given Virgin Atlantic’s significant investment at Terminal 3, this would most likely mean Air France and KLM moving from Terminal 4 to 3.
– Virgin Atlantic will codeshare on Air France and KLM flights from UK airports to their respective hubs in Paris Charles de Gaulle and Amsterdam.
– Virgin Atlantic will also codeshare on Air France and KLM flights around the world, thus offering significantly more booking options to Virgin Atlantic passengers.
– Virgin Atlantic will retain its own frequent flyer programme, but with earning and redemption opportunities on Air France and KLM flights.
In practice, this is likely to be rolled out progressively and codeshares may only be available for certain routings, eg when connecting to/from certain destinations covered by the joint-venture.
Competing Against American Airlines and British Airways
A clear theme is a desire/need for Virgin Atlantic and Delta to be a stronger competitor against BA and Oneworld at London Heathrow and in the UK market, particularly for corporate customers and frequent flyers.
The combined joint-venture sees it itself as a much stronger competitor in UK regional airports such as Manchester and Glasgow where it can offer both direct flights to the US and connections via Amsterdam and Paris Charles de Gaulle.
Air France and KLM can also compensate for Virgin’s relatively weak non-US network where it can offer codeshares to a very large number of worldwide destinations. Indeed, Air France and KLM serve very many destinations in Africa and Asia that are not served by BA.
As Virgin Atlantic reported a loss in 2017, achieving higher margin corporate revenue and cost savings from merging back office functions will be critical to its future.
There is a degree of irony in this submission in that BA and KLM did once explore a merger. This was arguably one of the greatest missed opportunities in aviation. The plan for co-operation between Virgin and Air France-KLM was very much that could have been explored between BA and KLM. It will be interesting to see how American Airlines and BA respond, both at Heathrow and at UK regional airports. Continue reading “Air France-KLM, Delta, & Virgin Atlantic’s Joint-Venture Plans”
Virgin Atlantic has suspended its daily service from London Heathrow to Dubai from Sunday 31 March 2019.
The route was taken off sale today, Wednesday 27 June 2018. Virgin Atlantic has been flying to Dubai since March 2006. Its suspension follows the the cancellation of a number of routes outside of North America from London Heathrow including Accra, Cape Town, Mumbai, Nairobi, Sydney, Tokyo Narita, and Vancouver.
There will be of course continue to be substantial capacity between London and Dubai with Emirates operating six A380s a day from London Heathrow alone, as well as three times daily flights from Gatwick and daily flights from Stansted. BA will also continue to fly to Dubai up to three times daily from London Heathrow.
Virgin has not yet announced any re-accommodation arrangements for displaced passengers. However, if your flight is cancelled you are entitled to a full refund.
Virgin Atlantic has today, Thursday 21 June 2018, announced that its CEO Craig Kreeger is to retire from the airline from 1 January 2019.
Craig Kreeger will be replaced by an internal appointment, Shai Weiss. Shai is currently Chief Commercial Officer and and has been with the airline since July 2014 having previously worked with a number of Virgin businesses.
Craig joined Virgin from American Airlines where he was closely involved in the launch of its transatlantic joint-venture with BA in 2010. This was in itself a radical departure for Virgin which had traditionally appointed senior executives from within.
“Plan To Win”
During his tenure Craig oversaw a number of radical changes.
These included the launch of Virgin’s transatlantic joint-venture with Delta, a reshaping of its route network, a slimming down of its Head Office, and the renewal of Virgin’s fleet with the delivery of 17 Boeing 787-9 Dreamliner aircraft.
Craig was also the architect of Virgin’s “Plan To Win” which was intended to secure record levels of profitability by 2018, by beating the previous record of £98m in 1999.
Whilst Virgin is still a very strong brand and can market itself with a confidence and flair that few can match (aided in part by BA’s continued ability to throw PR banana skins in front of itself), consistent profitability has proved elusive. Virgin reported a loss of £28.4m before exceptional items for 2017.
The next 12 months or so should see one of the most significant events in Virgin Atlantic’s 34 year history.
Virgin and its 49% shareholder Delta are in the process of securing regulatory approval to combine their transatlantic joint-venture with that of Delta and Air France-KLM. The latter joint-venture launched in 2009 and traces its origins back further to joint-ventures between KLM and Northwest Airlines and Air France and Delta.
As part of this, Sir Richard Branson’s Virgin Group will cede control of the airline, by selling a 31% stake in the airline to Air France-KLM. This will leave Delta as the single largest shareholder.
Virgin has today alluded to a new corporate plan which will succeed “Plan To Win”. Known as “Velocity” (and not to be confused with Virgin Australia’s frequent flyer programme), this will include the launch of the combined joint-venture with Air France-KLM. Previous announcements have indicated that this will include cost savings such as co-location at airports (which would be difficult to achieve at Heathrow) and reciprocal frequent flyer recognition.
However, not much else has been said.
2019 is already shaping up to be a significant year for Virgin Atlantic with the arrival of the first of 12 Airbus A350-1000 aircraft which will operate at both Heathrow and Gatwick. Further developments will be awaited very much with interest.
Virgin Atlantic has today, Wednesday 16 May 2018, announced a series of changes to its transatlantic route network.
As part of these changes, Virgin is to move its route to Las Vegas from Gatwick to Heathrow from Sunday 31 March 2019.
Virgin Atlantic has flown from London Gatwick to Las Vegas since June 2000. At the time it was the only airline to fly direct to Las Vegas from London. That was until BA launched its own route from Heathrow in October 2009. Virgin has also operated limited flights from London Heathrow for the Consumer Electronics Show.
Due to the move the flight will switch from a Boeing 747 to Boeing 787. This means a significant increase in Upper Class seats from 14 to 31 and a decrease in premium economy seats from 66 to 35 and economy seats from 375 to 192. The additional flight at Heathrow will be accommodated by a reduction in frequency on London Heathrow – Los Angeles.
Operating from Heathrow will enable Virgin to compete against BA which offers substantially more premium capacity with its Boeing 747 service from Heathrow.
BA will continue to fly to Las Vegas from Gatwick year-round. Norwegian also flies from Gatwick to Las Vegas on a winter seasonal basis from 5 November 2018.
London Heathrow – Las Vegas
Flight VS155 Depart London Heathrow 12:40 – Arrive Las Vegas McCarran International 15:25
Flight VS156 Depart Las Vegas McCarran Internaional 19:05 – Arrive London Heathrow 12:55
Additional Boston Frequency
Virgin Atlantic has also announced an additional flight to Boston will launch on Sunday 31 March 2019.
It will be operated by an Airbus A330-300 aircraft. An additional transatlantic day flight is certainly welcome.
Flight VS157 Depart London Heathrow 20:30 – Arrive Boston Logan International 23:00
Flight VS158 Depart Boston Logan Internaional 19:05 – Arrive London Heathrow 20:10
These flights will be on sale at Virgin Atlantic from Saturday 19 May 2018.
Virgin has also confirmed that winter seasonal flights from London Heathrow to Barbados will return on Tuesdays and Saturdays from Tuesday 11 December 2018 to Saturday 23 February 2019.
Virgin Atlantic has reported a financial loss for 2017.
Bloomberg reports that the airline lost £28.4m before exceptional items.
This compares to a profit of £23m for 2016. This is Virgin Atlantic’s first loss after three consecutive years of profit. Passenger numbers fell by 100,000 to 5.3m.
Virgin has cited numerous causes for its loss
These are: The fall in the value of the pound following the 2016 EU Referendum result; disruption to flights to Florida and The Caribbean due to Hurricane Irma; and engine maintenance to its Boeing 787-9 fleet which has necessitated leasing in aircraft from other airlines.
These are made with some justification. Virgin is a “dollar short” company. It has more expenses than revenue in dollars which means it is exposed to a fall in the pound. One reason why BA’s parent IAG bought Aer Lingus is because it is a “dollar long” company.
In a widely anticipated competitive response to American Airlines and British Airways launching basic economy fares, Virgin is to offer three different economy products.
These changes also broadly align Virgin’s economy products to those of its transatlantic joint-venture partner, Delta Air Lines.
The three products are:
1. Economy Delight
This will be Virgin’s leading economy product.Passengers will enjoy a seat pitch of 34″. Virgin currently offers extra leg room seats for a separate charge. There will be up to 36 Economy Delight seats on every aircraft and Virgin is to retrofit these seats to aircraft.
Passengers will also benefit from priority check-in and priority boarding. It is broadly similar to Delta’s Comfort+.
2. Economy Classic
This is effectively the same as Virgin’s current economy product.
However, passengers will be able to select a seat at the time of booking for free. Currently, Virgin charges a fee for a seat assignment in advance of online check-in, except for certain classes of fare.
3. Economy Light
This is an entirely new fare and is the equivalent of “basic economy”.Passengers will not receive a free checked luggage allowance. Nor will they be able to choose a seat for free at check-in. These fares are also non-refundable and cannot be changed.
All passengers will receive continue to receive free food & drink, in-flight amenities as well as access to the in-flight entertainment system.
This move was inevitable, not only because American Airlines and British Airways are to launch basic economy fares, but also its transatlantic joint-venture partner Delta now offers basic economy fares. Though it has of course been done in characteristic Virgin Atlantic style. Announcing “Economy Delight” is clever move as it detracts from headlines about scrapping free checked luggage.
Separately, Virgin has also announced the introduction of automated bag drops at London Gatwick and Heathrow. The airline has also confirmed that the first of its 12 Airbus A350-1000 aircraft will be delivered from spring 2019.
A little under ten years ago, when Virgin America and what was then V Australia were in their formative years, there was much talk of the formation of a “Virgin Alliance”.
In February 2009, the then CEOs of Virgin Atlantic, Virgin America and V Australia gathered in Los Angeles to talk up the concept of a new fourth alliance to rival Oneworld, Star Alliance and SkyTeam.
Sir Richard Branson, who then also hoped to set up new Virgin airlines in Brazil and Russia, flew around the world to show that you could now fly around the world London Heathrow – Hong Kong – Sydney – Los Angeles – London Heathrow on Virgin branded airlines.
Much has changed since then. Virgin America has been acquired by Alaska Airlines and the brand will soon disappear. Virgin Atlantic suspended its Sydney service in 2014. What is now Virgin Australia has undergone numerous changes to its structure and is now owned by Etihad, Singapore Airlines, HNA Aviation Group and others.
After a long period of inactivity, Virgin Atlantic has launched a new codeshare arrangement with Virgin Australia from Sunday 25 March 2018.
It is now possible to book, via Virgin Atlantic, flights from London to Brisbane, Melbourne and Sydney via Los Angeles.
From a cursory scan of flights online, this is not the most efficient way to fly to Australia due to length of the stopover in Los Angeles which takes the flight time to at least 30 hours. It is also of course conventional to fly from London to Australia eastbound via the Middle East or Asia. However, this may be an option for those who want to earn Virgin Flying Club miles or sample Virgin Australia. Note that some trans-pacific codeshare flights are operated by Delta which has a trans-pacific joint-venture with Virgin Australia.
Also note that whilst Virgin Australia offers economy, premium economy and business class as per Virgin Atlantic, the design of the cabin and seats differs. Full details of Virgin Australia’s in-flight cabins and amenities are available on its website.
We have seen announcements online referring to Virgin Australia’s recently launched Hong Kong – Melbourne route also being included in the codeshare. However, we can’t see any flights on sale at Virgin Atlantic at present.
Air France KLM, Delta and Virgin Atlantic have today announced a significant series of transactions which will see Sir Richard Branson’s Virgin Group cede control of Virgin Atlantic.
Virgin Atlantic is currently 49% owned by Delta Air Lines and 51% owned by Virgin Group.
Air France KLM is to acquire a 31% stake in Virgin Atlantic for £220m, reducing Virgin Group’s ownership of the airline to 20%. Sir Richard Branson is to retain the position of President.
Separately, Delta Air Lines and China Eastern will each acquire a 10% stake in Air France KLM for a combined sum of €751m.
Virgin Atlantic will retain its name. In order to preserve all of its flying rights, it remain a majority UK owned airline with an Air Operating Certificate in the UK. (Quite how this will be achieved has not been disclosed.)
In addition, Virgin, Delta and Air France KLM are to operate a combined transatlantic joint-venture between Europe and the United States. At present Delta has separate transatlantic joint-ventures with both Air France-France and Virgin Atlantic.
Operating a combined joint-venture will mean that Virgin will codeshare on Air France KLM’s transatlantic routes from Paris and Amsterdam and allow reciprocal earning of frequent flyer miles and recognition of frequent flyer benefits. Virgin and Air France KLM will also benefit from access to each other’s corporate customer bases.
There are a few unknowns:
Nothing has been said about whether Virgin Atlantic will join the SkyTeam alliance of which Delta and Air France KLM are members.
When Delta acquired a 49% share in Virgin Atlantic there was a significant restructuring of its route network with routes to Tokyo, Cape Town, Mumbai, and Vancouver suspended. Virgin has also suspended Accra, Nairobi and Sydney. This has left only Dubai, Shanghai, Johannesburg, Lagos, and Delhi as non-US long-haul routes from London. It’s not clear whether these will remain or be removed in favour of codeshares from the respective hubs of KLM and Air France.
The press releases refer to co-location at key hubs to improve connectivity and achieve cost savings. One of these is London Heathrow. Currently Delta and Virgin Atlantic fly from Terminal 3. Air France and KLM operate from Terminal 4. Consolidating all operations in one terminal would make sense, but would involve a lot of upheaval.
It’s also not clear whether Virgin’s frequent flyer programme “Flying Club” will remain in the long term or be merged with Air France KLM’s “Flying Blue”. Today’s release refers to an enchanced frequent flyer partnership. However, a combined flying programme could be a powerful rival to the British Airways Executive Club and Avios currency, particularly given that KLM has a substantial presence at UK regional airports.
Whilst today’s announcement has been heralded as positive news, it has to be noted that Virgin Atlantic is forecast to make a loss this year. Furthermore, with Virgin suspending London Heathrow – Chicago it was arguably struggling to compete against its transatlantic rivals.
As for Sir Richard Branson, this does effectively mean the end of his ambitions in the aviation industry. Whilst the Virgin name will remain, he will no longer control the airline. The Virgin Group has disposed of many businesses over the years, but it had always maintained that it would keep control of Virgin Atlantic, this business most closely associated with his public persona.