Virgin Atlantic CEO Cautiously Optimistic Despite UK Economic Pressures

Virgin Atlantic is noticing signs that corporate travel has stabilized and is starting to recover, reaching 80-85% of pre-pandemic numbers.

Virgin Atlantic CEO Shai Weiss said he saw continued strength in corporate traffic, which has been slower to recover versus tourism following the rise of video conferencing during the pandemic and businesses making travel budgets cuts.

“We're at about 85% of 2019 numbers. It's hard to say what the long-term trend is. I'm not calling it right now,” Weiss told reporters onboard a Virgin Atlantic Airbus A330-900 on display at the air show.

In June, Virgin recorded record US revenues, up 10% year on year. Weiss described this as a “very strong performance,” marking the first time that more than 50% of Virgin’s revenues have originated in the US. This has been driven partly by the UK carrier’s equity partnership with Delta Air Lines.

India is also “going well” and Virgin is poised to take advantage of the slot remedies that it has been granted at Seoul in Korea as part of Korean Air-Asiana merger deal, when that is finalized.

However, UK-originating sales are coming under a “bit of pressure,” hinting at a possible slow-down. This needs to play out more, Weiss said, with the new Labor government coming into power and increased living costs becoming “slightly more contained.” He added that the strength of the pound against the dollar may also buck this trend.

In the 2024 financial year, Virgin is anticipating 9% revenue growth.

Weiss was asked whether Virgin’s plans to return to London Gatwick (LGW), which used to be the airline’s home base before it moved to London Heathrow (LHR). Virgin suspended operations from the LGW during the pandemic. Weiss said a return to LGW might be on the cards “at some point,” but gave no timeline.

Virgin has 40 long-haul aircraft based at LHR and another five at Manchester Airport (MAN) in northern England. Weiss said Virgin was not evaluating any further aircraft orders, having completed its fleet renewal planning with seven additional A330-900s plus nine purchase rights that were announced during the air show.

By Q1 2028, Virgin will operate 12 Airbus A350s, 19 A330neos and 14 Boeing 787s, marking a complete renewal of Virgin’s former Airbus A340 and Boeing 747 fleet. As part of the fleet renewal, Virgin will reduce its 787 fleet from 17 to 14 by 2028, with the potential for one or two incremental 787s if needed.

Weiss said no airline was unaffected by supply chain issues, but Virgin was in “a good position” to complete its fleet renewal by Q1 2028. “These delivery slots are gold dust,” he said.

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