Virgin Atlantic, 25-year-old free spirit

23 Feb 2009

Virgin Atlantic will mark 25 years of “non-conformity” in June, a trait that is serving it well in the tight economic times.

Guided by the vision of maverick founder Sir Richard Branson, the carrier has pioneered trend-setting cabin products such as the Premium Economy class (featuring a wider seat with more legroom than Economy), launched during the 1992 recession, and which has since been updated.

Now that a new economic trough is affecting business and downsizing is the buzzword, Premium Economy works extremely well for corporates, says Steve Ridgway, Virgin’s chief executive. “Some passengers will do Upper Class (Virgin’s business class equivalent) one way and Premium Economy another way. It depends. If they’re flying back for the weekend, they might go for Premium Economy, and if they’re going to an important meeting, they might opt for Upper Class. So it’s a good blend.

“We’ve learnt to manage this sort of cabin flow, people moving between cabins. Upper Class is still very important for people to arrive in the best shape for meetings and so on, but nonetheless, Premium Economy is a fantastic value proposition for both leisure and business travellers.”

Ridgway says Virgin has journeyed a long way from 1984 “when we first started, a tiny airline in England with one aircraft going to New York (from London Gatwick), and here we are 25 years later”.

At the end of last year, Virgin added a second daily service between London Heathrow and Hongkong, a market where it has enjoyed a 15-year presence. (The original daily LHR-HKG flight continues to Sydney.) However, Ridgway admits that given the recession, it was “probably not a great time to start it”.

However, he expressed great faith in the territory’s dynamic economy. “It is better placed (than other destinations in the region) to withstand the ups and downs.

“In the medium to long term, it will be very successful so that we have two flights a day to London and one flight a day to Sydney (via Hongkong). But, as we did with Sydney, you have to make a commitment and then, you have to start to build the market. Virgin has a very good reputation in Hongkong.”

On the Hongkong-Sydney route, where Ridgway admits that Virgin continues to go up against dominant players Cathay Pacific and Qantas, he says: “If you look at the traffic flow now between London and Australia over Hongkong, it’s transformed. I know it’s all about competition, but at the same time, it’s great for the consumer. So we’ve all stimulated the market between us.”

As to why Virgin still shies away from joining an airline alliance, Ridgway explains: “We don’t want to reign in our individuality or our free spirit. But at the same time, we do cooperate with lots and lots of carriers so it may be at some stage in the future make sense to join one.”

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Julian Tan

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