Willie Walsh takes aim at Virgin Little Red

10 Apr 2014 by GrahamSmith

IAG chief Willie Walsh today criticised the decision to award domestic services to Virgin subsidiary Little Red.

Speaking at the CAPA Airlines In Transition 2014 conference in Dublin, Walsh said he found it "bizarre" that the EU Commission gave the business to Virgin, saying it must be "costing [Virgin] a fortune".

He added that by outsourcing the service to Aer Lingus, Virgin had shown that it couldn't even operate it.

Walsh was speaking on a panel alongside Stephen Kavanagh, chief strategy and planning officer for Aer Lingus, which operates the flights on behalf of Virgin (see news, December 10).

Kavanagh had previously described for the aviation industry audience the process by which Virgin had outsourced the operation to Aer Lingus on a "cost-plus basis".

He said: "Virgin are not a short-haul operator. And the complexity of  adding an A320 or a B737 [short-haul aircraft] to their AOC [Air Operators Certificate[ and all the associated costs meant they decided they would outsource.

"Given we're a large operator of A320s we could help. It works for Virgin because they would never be able to produce a seat on a short-haul aircraft as cheaply as Aer Lingus."

However, Walsh then said: "But do you not think it bizarre for an airline like Virgin to admit that they cannot operate these aircraft... that it's too difficult for them, too complex for them to fly A320s because they are so different to fly than A330s, that they have to go and pay someone else to do someone else to do it?"

Kavanagh pointed out that Aer Lingus offered superb value for money for their customer (Virgin).

Commenting on Virgin's domestic routes, Walsh said: "Is it profitable for Virgin? Absolutely not, it must be costing them a fortune." He added that he referred to them as Big Red.

His remarks follow reports that Little Red has been struggling (see news, November 2013 and May 2013).

Walsh went on to criticise the decision to award the routes to Virgin.

He said: "How did the commission give the business to Virgin, if Virgin are saying they can't do it? That to me is bizarre.

"The argument was made that you replicate competition by providing these slots to somebody and then the person getting it [Virgin] says 'We can't do it.'"

Tom Otley

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