09 October, 2014

Virgin Consolidates Routes

There are changing times ahead for loss making Virgin Atlantic.  The vibrant and colourful airline is all set to increase flights between the UK and the US but is cutting destinations further away as part of its push to return to profitability.
Virgin Atlantic is majority-owned by Sir Richard Branson’s Virgin Management company and is consolidating its route pan after a review of its network, working in partnership with its American shareholder Delta Airlines. Delta snapped up Singapore Airline’s 49 percent stake in Virgin Atlantic for $360m (£219m) in 2012, and established a joint venture in January of this year, following regulatory approval.

This latest shake-up sees Virgin intensify its service across the Atlantic, a move to ensure its aircraft service more profitable routes.   Mr Kreeger, who took over from long-standing chief executive Steve Ridgway in February last year and has said he wants Virgin to break-even by the end of the current financial year. These changes are intended to create what he hopes will be a successful and sustainably profitable business.
Facing the axe are flights to far-away destinations including Mumbai, Tokyo Narita, Vancouver and Cape Town which will all end over the next nine months.  In their place come a new service to Detroit, also on the way are extra services to New York, Los Angeles, Atlanta, San Francisco and Miami. 

Virgin are also swapping some services with Delta, allowing the US airline to fly an extra flight from Heathrow each day, whilst Virgin will be adding a flight between Manchester and Atlanta.
“Transatlantic flying has always been at the heart of our network, and our most financially successful region,”  Mr Kreeger said.
Continuing that the restructuring allowed Virgin to play to its “strengths” and focus on routes “most important to our customers.”
Commenting on the current speculation of airport expansion in the UK's south east, Mr Kreeger added that Virgin would “love to” re-enter the four international cities to which it is cutting services if Heathrow were to be expanded. The airline has long been a supporter of an expanded Heathrow.
Virgin is not just a US destined carrier,  even after the cuts that airline will still have international flights to a number of cities including Delhi, Johannesburg, Hong Kong, Shanghai and Dubai, as well as an impressive array of Caribbean routes.
Virgin also confirmed it was committing £300m over the next four years to the benefit of customers, alongside the introduction of the airline’s first Boeing 787 Dreamliners, due to launch in late October.