As Virgin Atlantic approaches its 35th year, it remains a very strong brand in the UK. However, profitability in recent years has proved elusive.
The airline reported a loss for 2017. Next year, there will be a number of significant changes to improve its financial performance. Here’s a quick run through of what to expect.
Air France-KLM & Delta
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 primarily intention is to make the combined joint-venture much more competitive against American Airlines and BA.
This is particularly because Air France and KLM can offer many destinations in Asia and Africa not served by Virgin (or indeed BA). KLM in particular also has extensive coverage of UK regional airports and can offer many connection opportunities not offered by Virgin (or again BA in some cases).
This is likely to lead to extensive reciprocal codesharing between Virgin Atlantic and Air France and KLM. Virgin may also pursue greater co-operation with Air France and KLM on non-transatlantic routes. Subject to space, Air France and KLM may also co-locate with Virgin Atlantic in Terminal 3 at London Heathrow.
As part of this, Sir Richard Branson’s Virgin Group will cede control of the airline, by selling a 31% stake to Air France-KLM. This will leave Delta as the single largest shareholder.
Sir Richard Branson has long had little involvement in the day-to-day running of the airline. However, this is symbolic as Virgin Atlantic has been the one business he has previously resisted ceding control of.
Separate to these changes, Virgin’s CEO Craig Kreeger will retire on 1 January and be replaced by an internal appointment, Shai Weiss. Shai is currently Chief Commercial Officer and and has been with the airline since July 2014.