Virgin ups competitive threat to BA

The British carrier with operations into Nigeria, Virgin Atlantic will start to take delivery of twenty one Boeing 787 aircraft in matter of weeks according to the Financial Times.

The Boeing 787 will primarily be replacements for its Airbus A340 aircraft some of which fly the London-Lagos and London-Abuja routes.

The 787s are more fuel efficient than the A340s, and therefore should be an important part of Virgin’s efforts to return to profit.

Virgin plans to invest £300m in a number of customer service improvements such as putting WiFi on its aircraft and building an airport lounge in Los Angeles.
These are part of plans by Virgin to scale its competition with British Airways and return to profit.

Virgin Atlantic also plansto increase flying on its core transatlantic routes, as Sir Richard Branson’s airline seeks to mount a stronger competitive threat to British Airways and return to profit.

From next summer, Virgin will increase frequencies on routes between London and New York and Los Angeles, and add new services such as Detroit. It will drop flights to Tokyo’s Narita, Mumbai, Vancouver and Cape Town.

The changes to Virgin’s network are designed to maximise the benefits of the carrier’s partnership with Delta Air Lines, which bought a 49 per cent stake in the UK airline last year. The two airlines have a joint venture on transatlantic routes, similar to a partnership between British Airways and American Airlines.
Craig Kreeger, Virgin Atlantic’s chief executive, said the network changes were “a big deal for us”.

“It allows us to continue to capitalise on the growth we are seeing from routes in transatlantic,” he added.

“We are on track for becoming profitable this year. It is a sign that we moving into a success phase, allowing us to grow in time.”

Virgin has been lossmaking for two years. It halved its pre-tax losses in 2013 to £51m, down from £102m a year earlier, and lifted revenues 4.9 per cent to £2.98bn.
The 500 additional flights planned for next summer will be a 4-5 per cent increase on the same period this year, and are expected to attract a mix of leisure and business travellers.

This spring the European Commission began an investigation into Delta’s stake in Virgin, after allegations that the UK airline was effectively being controlled by the US carrier.
Mr Kreeger dismissed the allegations. “I have no concerns,” he said. “I’m quite confident that with all the conversations I’ve had with government officials, we are genuinely governed in accordance with control processes.”

Delta paid $360m to buy its Virgin Atlantic stake from Singapore Airlines. Sir Richard retains a 51 per cent stake in the UK carrier.