INVEST & MANAGE: Virgin Atlantic Committed to Domestic UK Operations

UK carrier Virgin Atlantic Airways will continue with its plans to launch UK domestic air services next year despite the carrier’s sister venture Virgin Trains managing to hold onto the licence to operate rail services along the west coast mainline. Speaking at last week’s ‘Invest and Manage Airports’ conference at Stamford Bridge, the London home of Chelsea Football Club, Edmond Rose, director commercial and revenue planning, Virgin Atlantic Airways, said the carrier is “fully committed” to its domestic growth.

Although the activities of Virgin Atlantic Airways and Virgin Trains are completely independent they are both part of Sir Richard Branson’s Virgin Group empire. The timing of the original announcement that the airline would serve the Manchester – London Heathrow route from next spring just days after Virgin Trains lost its bid to continue its franchise for railway services that cover the same route, had led many analysts to believe the two decisions were linked.

However, having secured rights to continue to serve the rail route, Edmond Rose has put an end to this speculation. Speaking at the conference he said: “We are fully committed to launching domestic services in the UK. When we look at routes we look to operate them ourselves. We will be launching flights from Manchester to London Heathrow next March. These will be flown with an aircraft under a wet lease agreement from another operator but using the full Virgin brand, livery, uniforms and service.”

According to Rose, Virgin Atlantic officials have already held talks with non-aligned air carriers and members of the Star and SkyTeam alliances to provide feed into their own networks at the London airport. “We feel there is a really strong potential to provide passengers for not only our own long-haul flights, but those offered by others from Heathrow,” he said, highlighting that bilateral airline partnerships outside alliances are a good way forward for the carrier. The airline could also serve destinations in Scotland subject to a ruling from the UK Civil Aviation Authority (CAA).

Away from the domestic expansion there is a lot of other ongoing projects at Virgin Atlantic. The transition of flying from four-engined Airbus A340s to twin-engined A330-300s continues and has been a “key development” for the carrier, according to Rose, with fuel price volatility. The airline also expects to hear this week from the UK CAA over who has been selected in the scarce capacity hearing to replace bmi British Midland International on the London – Moscow route.

Other new long-haul routes are also potentially on the cards, but Rose warned that a significant investment is always required in new air service development. “Long-haul flying is expensive when you want to go in with a daily schedule and actually launching a new route can cost between £50 million and £75 million,” he said. These high costs, due mainly to the huge operating costs of flying long-haul, mean Virgin Atlantic does not expect any new route to breakeven in its first year, maybe not even in its second.