Virgin Atlantic positive about post-recovery Asian potential

28 Nov 2009

Virgin Atlantic sees great growth opportunities in Asia but the next 12 months will be focused on consolidation, the airline’s chief financial officer Julie Southern told Business Traveller Asia Pacific.

The carrier, which flies to London and Sydney out of Hongkong and from London to Delhi, Shanghai and Tokyo, will renew its fleet with the arrival of Airbus A330s and Boeing 787 aircraft between 2011 and 2013, and will use much of 2010 to work on perfecting the new products.

“We do see a stronger market and Virgin Atlantic reacted quickly to the economic crisis. We do plan to reinstate the second Hongkong-London service when the market recovers but for the next 12 months our focus is on keeping things relatively stable. In 2010, we will be preparing for the arrival of our new planes. Although we’re obviously disappointed that the Boeing aircraft have been as delayed as they have.”

Southern said Virgin Atlantic’s longer term challenge for Asia was the capacity of its London Heathrow home base.

“Our biggest obstacle for expanding Asian routes will be getting slots at Heathrow, but it makes sense as East Asia and India are the most likely spots of growth in the world economy,” she said.

While there are currently no plans to create an Asian Virgin offshoot, as has happened in Australia with Virgin Blue and V Australia, Southern said: “At Virgin, you learn never to say never.”

Likewise the airline has no plans to join any of the major alliances but Southern said that its success was that it was "50 percent of the way there", with successful partnerships with airlines in the big networks, especially the Star Alliance, but Virgin Atlantic was happy to be a “niche player”.

Southern said that the airline’s premium-economy class category had proven resilient at a time when many business travellers have had to trim budgets and downgrade their travel programmes.

“The success of the product is obvious. Virgin Atlantic invented the premium economy category and look at how many airlines have copied it. We have also shown business travellers that although the Virgin brand is different and funky, we have a serious business product too and we are increasing our share of business travellers as a result. For example, our new Upper Class Wing at Heathrow Terminal 3 means you can be dropped off and be through our private security channel and in the lounge in ten minutes.

"There has to be substance in the product too, not just the brand," Southern said.

Kenny Coyle

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