Air France KLM acquires a 31% stake in Virgin Atlantic

Air France KLM is to acquire a 31% stake in Virgin Atlantic and will operate a transatlantic joint-venture with Delta Air Lines.

Virgin Atlantic, Air France KLM and Delta
Virgin Atlantic, Air France KLM and Delta

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.

Here are the news releases from Air France KLM,  Delta and Virgin Atlantic. Sir Richard Branson has also penned a letter (with the inevitable barbs at BA and International Airlines Group CEO Willie Walsh).

Why Virgin Atlantic’s #VAnotBA promotion falls flat

Why Virgin Atlantic’s #vanotba £50 flight discount is not worth the effort

Virgin Atlantic
Virgin Atlantic #VAnotBA Promotion

Once upon a time, Virgin Atlantic never missed an opportunity to have a joke at the expense of its arch-rival British Airways.

Whether it was BA’s decision to introduce World Images tail fins, or to order twin rather than quad-engine long-haul aircraft or the botched opening of Terminal 5, Virgin Atlantic always seized the opportunity to generate free publicity.  Meanwhile, BA had no option but to maintain a dignified silence through gritted teeth.

For a long period of time, this worked very well.  It generated huge PR for Virgin Atlantic and, at least in PR terms, closed the gap in terms of the relative size of the two airlines.

Over the past few years, things have gone very quiet in terms of the rivalry between the BA and Virgin. Partly because Virgin has undergone changes in management and a restructuring to stem years of financial losses whilst BA has expanded considerably, primarily thanks to its merger with bmi in 2012.  Also, the overtly contrived publicity stunt has long been out of fashion.

So it’s something of a surprise to see Virgin launch a new promotion actively encouraging passengers to switch their bookings from BA to Virgin with the promise of a £50 discount.

Here’s how it is supposed to work:

  • You make a flight booking directly with British Airways (a price quote is not sufficient).
  • You then contact Virgin Atlantic twice, first by e-mail and then by telephone to make the same booking, and Virgin will give you a £50 discount off your flight for the same dates and destination.
  • You then have to contact BA to cancel your booking.
  • Crucially, you must contact BA within 24 hours of making your original BA booking in order to cancel your booking without penalty.  Otherwise, the cancellation will be processed in accordance with the rules of your fare and could be non-refundable.
  • Passengers are encouraged to share their experience using the hashtag #VAnotBA on social media.

Full details are on the Virgin Atlantic website.  Here are the rules of BA’s 24 hour cancellation policy.

Here is why this promotion is a bad idea:

1.  It feels like it is run for the benefit of Virgin Atlantic rather than passengers.

A £50 discount is, in the grand scheme of things, quite modest.  There is also a very limited window of opportunity.  The promotion runs from today, Tuesday 13 June to Thursday 15 June.

A cynic might wonder whether this promotion is run primarily to generate PR.

2.  It requires a lot of effort on the part of passengers

To take advantage of this promotion, you have to first make a booking direct with BA, e-mail the booking reference to Virgin, call Virgin to obtain a discounted flight and then contact BA to cancel your booking and obtain a refund from BA.

This is a lot of effort for a £50 discount.

3. It could all go wrong very easily

BA’s 24 hour cancellation window, amongst other limitations, only applies to direct flight only bookings.  It does not apply to BA Holidays bookings with hotels or car hire or flight bookings via travel agents.

BA is hardly going to be charitable if passengers inadvertently find themselves having to pay for two flights to the same destination on the exact same day.

You also have to wait for BA to process your refund. Given how busy the airline is dealing with compensation claims from last month’s IT outage, this could take many weeks.

A passenger could also easily find themselves having to pay a credit card bill with two flight bookings before the BA flight is refunded.  If a passenger cannot settle the credit card bill in full, the interest cost could easily wipe out the £50 saving.

London Flight Cancellations due to severe East Coast USA “Storm Stella” weather on Tuesday 14 March

“Storm Stella” is expected to cause very severe disruption across the East Coast of the United States on Tuesday 14 March 2017.

As a consequence, a large number of transatlantic flights from London’s airports are cancelled on Tuesday 14 March.  Flights to New York, Boston and Philadelphia are most affected with widespread cancellations.  There are delays and cancellations to Baltimore and Washington as well.

Airlines have also implemented flexible rebooking policies for those who are due to travel to the East Coast of the USA this week.

If your flight is cancelled you should be entitled to a full refund or a rebooking to an alternative date.

Here is the latest information from airlines operating transatlantic flights from London on Tuesday 14 March.

As at 23:00 GMT Tuesday 14 March, transatlantic operations from London’s airports should return to normal on Wednesday 15 March.

Continue reading “London Flight Cancellations due to severe East Coast USA “Storm Stella” weather on Tuesday 14 March”

Virgin Atlantic launches seasonal London Heathrow to Barbados route from Tuesday 12 December 2017

Virgin Atlantic will fly from London Heathrow to Barbados twice weekly from Tuesday 12 December 2017.

Virgin Atlantic is to launch a new winter seasonal route from London Heathrow to Barbados.

The airline will fly from London Heathrow to Barbados Grantley Adams International Airport from Tuesday 12 December 2017. Flights will operate twice weekly each Tuesday and Saturday.

This will be the only direct route between London Heathrow and Barbados. This will complement Virgin Atlantic’s existing daily service from London Gatwick.

Flights will be operated using an Airbus A330 aircraft with 33 Upper Class, 48 Premium Economy and 185 Economy seats.

Flights will be on sale from Monday 27 February at Virgin Atlantic.com

And here’s the timetable:

Flight VS131 Depart London Heathrow 13:15 – Arrive Barbados 17:55 (Tuesday, Saturday)
Flight VS132 Depart Barbados 20:15 – Arrive London Heathrow 07:55 (Tuesday, Saturday)

Virgin Atlantic unveiles its new Clubhouse in London Gatwick’s North Terminal

Virgin Atlantic has opened a new Clubhouse lounge in London Gatwick’s North Terminal.

Today sees a significant reorganisation at London Gatwick. easyJet has consolidated its operations in the North Terminal. 

To accommodate this move, British Airways has moved from the North Terminal to the South Terminal. Virgin Atlantic has moved from the South Terminal, its home at Gatwick since the airline first launched in 1984, to the North Terminal.

This move of course means new lounges for both BA and Virgin Atlantic.

Virgin Atlantic has today opened its new Clubhouse in the North Terminal.  It is located on level 4 of the terminal, after security.

Lounge features include:

  • A marble bar offering complimentary drinks including bespoke cocktails from East London bar The White Lyan
  • A complimentary to order brunch menu featuring popular staples such as Eggs Benedict
  • Floor to ceiling windows with views of the airport’s apron
  • A woodland themed play area for younger travellers
  • A Clubhouse spa with a selection of complimentary treatments such as facials and paid for treatments such as wet shaves and massages.  The spa is open from 7.00am to 12:30pm

Here is the spa treatment menudining menu and cocktail menu.

First impressions are that the lounge looks bright, spacious and (at least when the weather’s good) the floor-to-ceiling window views should put passengers in the right frame of mind for a holiday.

Here are some official pictures released by Virgin Atlantic:

Passengers travelling in Virgin’s Upper Class cabin and Flying Club gold cardholders are eligible to access the lounge.

Virgin Atlantic flies from London Gatwick to Antigua, Barbados, Cancun, Grenada, Havana, Las Vegas, Montego Bay, Orlando, St Lucia, Tobago and Varadero.

Virgin Atlantic’s Hong Kong Clubhouse is to close from Sunday 5 February 2017

Virgin Atlantic’s Clubhouse lounge in Hong Kong has closed.

Virgin Atlantic Clubhouse, Hong Kong
Virgin Atlantic Clubhouse, Hong Kong (Image Credit; Virgin Atlantic)

Virgin Atlantic has long been known for its small, but distinctive, portfolio of Clubhouse lounges around the world. That portfolio will be a little smaller shortly as its Clubhouse at Hong Kong International Airport is to close from Sunday 5 February 2017.

The reason for the closure is that the lease on the space occupied by the clubhouse has come up for renewal and Virgin Atlantic has decided not to renew the lease for reasons of cost.

Passengers travelling in Virgin Atlantic’s Upper Class cabin and Flying Club Gold members will be able to use the third party Plaza Premium lounge.

The Plaza Premium lounge is located near Gate 40 on Level 7, Departures level of Terminal 1. The lounge is open 24 hours a day. Facilities include showers, a bar, and a private resting area.
Continue reading “Virgin Atlantic’s Hong Kong Clubhouse is to close from Sunday 5 February 2017”

Virgin Atlantic suspends its seasonal route from London Heathrow to Chicago O’Hare

Virgin Atlantic will not reinstate its summer seasonal service from London Heathrow to Chicago.

Virgin Atlantic has announced it is suspending its summer seasonal route from London Heathrow to Chicago O’Hare airport from summer 2017.

The seasonal route had been due to return in 2017 from May to October.  However, the route has now been suspended permanently.

It is something of understatement to say that the Chicago route has something of a chequered history at Virgin Atlantic.

The route has been launched and suspended on more than one occasion and most recently has operated on a summer seasonal basis only.  It is highly unlikely that the route will now ever return.

Whilst no reason has been given for the cancellation, it is likely that United and British Airways & American Airlines offering significantly higher frequencies (some six joint daily flights in the case of AA & BA) has put Virgin Atlantic at a competitive disadvantage.

Affected passengers should contact either Virgin Atlantic or their travel agent to arrange re-routing via Delta and Virgin Atlantic services to other North American gateways such as New York JFK and Detroit.