Business Traveller reports on the airline's expansion plans from the Mexican resort, including plans to serve Moscow, and Richard Branson's obligatory publicity stunts featuring Keith Lemon and Alexandra Burke.
The airline started twice weekly flights (Tuesday and Saturday) from London Gatwick to Cancun on July 7, with the outbound service scheduled to depart at 1125 and arriving at 1545, and the inbound service leaving at 1805 and landing at 0915 the following day.
Upon arrival in Cancun, the onboard media contingent disembarked from the aircraft to watch as Richard Branson performed a wing walk with UK X Factor winner Alexandra Burke and two members of crew who waved flags. While posing for photos, Branson was then rugby tackled by comedian Leigh Francis (aka Keith Lemon) who was also on the flight, resulting in both of them coming close to falling off. The spectacle was accompanied by a live mariachi band on the ground.
Virgin Atlantic's 34th destination, the Cancun route is operated by a B747 configured with 379 economy, 58 premium economy and 14 Upper Class seats (to see a seat plan click here). Virgin is in the process of investing £50 million in giving seven of its jumbos a facelift (to see a seat plan of this aircraft, click here), with new premium economy and economy products installed, along with a new in-flight entertainment (IFE) system. Virgin says the retrofitting will be complete by Christmas.
Edmond Rose, director of commercial and revenue planning, said: “We've grown our leisure business very strongly over the years and so we now have nine aircraft in our leisure fleet and we added one more last year. Our future plans for leisure growth would depend on getting more aircraft. With Cancun it's a big-volume market and a very attractive destination. We need to operate to the places UK passengers want to go – it is one of the top five long-haul leisure destinations from the UK.” As well as competing with BA on the route, Virgin is also up against Thomson, which advertises its services as scheduled flights.
At a press conference the following morning, on July 8, Branson also announced Virgin Atlantic's intentions to launch a new route to Moscow next year. The service represents the carrier's first move in building a broader network including short- and mid-haul flights from London Heathrow.
The airline plans to operate daily flights to the Russian capital using its new A330 aircraft fitted with new Upper Class, premium economy and economy products. Traffic between the two cities has trebled in the last ten years and demand on the route continues to grow, with BA having recently launched a flight in March fitted with First and Club World (see online news March 9).
Virgin Atlantic chief executive Steve Ridgway said: “This route is now open for another UK airline following BA’s takeover of Bmi and we are making preparations to take up these rights early next year. Linking these two cities will be an important part of our strategy to run short-haul flights into Heathrow thus feeding our long-haul network. It will also radically improve competition on the route giving business and leisure travellers much better choice.”
A press release issued by the airline read: “As well as securing designation from the UK government, the route launch will be predicated on winning the Heathrow slots that BA was forced to give up following its purchase of Bmi earlier this year. Virgin Atlantic will be fighting to take up the 12 daily slot pairs so that it can provide renewed competition and feed its long haul network.
“The move will increase much needed competition at London Heathrow, again offering consumers the choice that was taken away following BA’s acquisition. Flying to Russia reflects Virgin Atlantic’s strategy of mixing emerging economies with its more established destinations."
But as Rose noted, Virgin has been waiting a long time to serve Moscow. He said, “We originally wanted to fly to Moscow 15 years ago – in 1998 we won the rights to fly there and were planning to operate from winter 1998. We had the slots and Heathrow but Bmi appealed the decision and it was overturned, and Bmi won the traffic rights instead. Now BA has taken over Bmi and as two UK carriers are allowed, we have every intention of winning the rights to be that second carrier.”
The Virgin release read: “Virgin Atlantic has been focusing on connecting its routes from the east and south to its transatlantic flights, doubling its own connecting traffic through Heathrow in the last two years alone. Its London Heathrow to Mumbai route launch in October of this year will also connect the Indian commercial centre with New York, Boston, Chicago, Miami and Washington via Heathrow.”
However, Branson said the UK airline industry is facing real hurdles to expansion: “We should also be talking about wholesale expansion to Asia, to Africa, to South America, real extra competition but it's impossible at the moment – and has been for the last 15 years. Great Britain came to an effective full stop about 15 years ago and that has meant that millions of travellers from around the world are going to cities other than in the UK. And that affects every single aspect of the UK – hotels, restaurants, clubs, shops. In time it will turn us into a third-world country – it is that serious.
“The last time a new runway was developed at Heathrow in 1947 – in the meantime Germany, France and Italy have opened 17 new runways. We need a bold, brave government. We needed an aviation review 20 years ago, ten years ago, five years ago, and when this government got into power – but we are told it is delayed yet again. At the very least there should be an aviation review to see whether we are right or wrong, and unless that review includes Heathrow, we are not going to participate in it.”
Ridgway said: “Our core flying has always been across the Atlantic but we have been clear that we will also continue to grow our routes to emerging markets if given the slots at London Heathrow. Moscow would be our third BRIC country and we think it is imperative for British trade that we are operating in these economies.
“Given the increased consolidation in the market and challenging economic environment, we need to develop our network proposition and ability to sell more connecting journeys. Winning the Bmi remedy slots will help us add connectivity to serve a huge number of travellers who have lost choice and the benefits of competition through the BA takeover.”
So how does applying for the remedy slots work? Rose explained: “In order for IAG to get approval for BA to take over Bmi, they made some commitments to the European Commission including giving up 12 daily slot pairs at Heathrow on certain routes. They are open to any carrier to apply for and you submit a business plan. You can also offer a monetary amount as part of your bid but the commitments provide that the monetary amount you offer is only a tie-breaker. The Monitoring Trustee will rank the applicants so if there is a clear number one then no money will change hands.”
During the press conference at the Royal Hideaway Playacar in Cancun, Branson acknowledged the problem of APD, which is at an all-time high: “One of the things we are campaigning for from the government is air passenger duty that is a lot fairer. At the moment, for example, if you fly to Hawaii it is much less than going to Cancun.”
After the press conference, Branson and Ridgway took part in a novelty “beach Olympics” that involved them racing to don Mexican outfits, drinking tequila shots, jet-skiing out into the sea to collect a bikini-clad model each, driving them back to the shore, running up the sand to drink a shot of vodka, changing into a Russian outfit and rushing to be the first to get to some miniature Christmas trees. It seemed as though Ridgway let Branson win but both were smiling as they posed for the cameras and fake snow billowed over them.
For more information visit virgin-atlantic.com.
Report by Jenny Southan
