Virgin to invest £100m in new product

Virgin Atlantic says it will invest £100m in product development, following pre-tax profits of £18.5m over the last year. The carrier has not given specific details on what the product development will entail, but says it is “investing heavily in new product innovation so that we retain and enhance our leadership in customer service and experience”. A spokesperson for the airline confirmed that the £100m investment in product development is "forthcoming", and does not include the A330s which have already been brought into service, adding that as forthcoming A330s are introduced with Upper Class (the current ones feature economy and premium economy only), "this could come out of our product development budget". The spokesperson also said that Virgin will be updating "many elements of the onboard service and some product developments in the cabins also". Virgin took delivery of two Airbus A330-300 aircraft earlier this year, featuring a new inflight entertainment system, and a newly-designed economy seat (see online news April 2). The carrier today announced a return to profit over the last year, with revenues up 13 per cent, and pre-tax profits of £18.5m. Commenting on the news CEO Steve Ridgway said: “We have demonstrated the resilience of our business by weathering the toughest economic period for aviation and have now returned the business to profit.  A sharp recovery in the first half of the year has been tempered by more challenged trading in the latter period due to increased capacity in the market and high fuel prices. “Whilst we have been very focused on trading the airline back to profitability, we have worked hard to introduce new aircraft, new routes and extra rotations to the existing network where there has been high demand.” However he warned that since the turn of the year, “market conditions have become tougher with increased capacity, faltering consumer confidence and high fuel prices”. He added that while “business traffic remains strong, demand in the economy cabin is more challenged”, and warned that “continued rises in Air Passenger Duty” have affected Caribbean routes and premium economy products. For more information visit virgin-atlantic.com. Report by Mark Caswell