Special Report: Virgin Atlantic ramps up US services

Special Report: Virgin Atlantic ramps up US services

Emma Jones, the carrier’s vice-president of sales sets out further expansion plans. Ian Taylor reports

Virgin focuses on MAN flights

Virgin Atlantic began flying to the US 34 years ago last month when its inaugural flight from Gatwick took off for Newark, New Jersey.

The carrier remains focused on services to the US – as well as to the Caribbean – through its joint venture (JV) with Delta Air Lines – and it still flies to Newark from Heathrow. Virgin also operates from Heathrow to New York JFK, of course, as well as to Boston, Washington, Atlanta, Miami, Orlando, Las Vegas, Seattle, Los Angeles and San Francisco.

It flies from Gatwick to Orlando and Las Vegas; from Manchester to New York, Boston, Orlando and San Francisco; and it operates summer services from Glasgow and Belfast to Orlando.

As if that was not enough, Virgin’s JV partner Delta operates from Heathrow to Portland, Salt Lake City, Minneapolis-St Paul, Detroit, Boston and Atlanta, as well as to New York JFK – to which the carriers jointly provide a daily shuttle service.

Virgin added a sixth daily service between Heathrow and New York JFK this year and extended its seasonal Belfast-Orlando service to 28 weeks this summer – trebling the number of flights. However, Manchester is the focus of expansion for next year.

Emma Jones, Virgin Atlantic vice-president of sales, said: “We’re looking to increase our flights from Manchester by 20% from March 2019. It will be the biggest programme we’ve ever flown from Manchester, with a new route to Los Angeles and increased services to Boston and Las Vegas adding 14,000 seats.”

The Los Angeles service will operate three times a week from May. Flights to Las Vegas will double from two to four a week from the end of March. Virgin’s Boston service will increase to three a week from May and its daily services to New York and Atlanta will switch to using a Boeing 747, increasing the number of seats on each flight to 455.

Jones said: “We will have up to six flights a day to the US from Manchester. We see it as a huge opportunity. There is huge leisure traffic, but Manchester is also an opportunity for us in the SME [small and medium-enterprise business travel] space, to Boston in particular.”

There are differences between the Heathrow and Manchester markets. Jones said: “Manchester is predominantly a UK point-of-sale market. There is a lot of connecting traffic through Heathrow – and convention traffic to Las Vegas.”

Virgin takes connecting traffic from regional airports at Manchester through codeshare partner Flybe – including from Aberdeen, Edinburgh, Belfast, Exeter and Southampton. It also takes connecting passengers from Edinburgh and Aberdeen at Heathrow thanks to daily multiple Flybe services launched last year.

Jones said: “We work closely with Flybe in the regions where they are our primary partner.

“Delta supports our connections at the other end. We see a lot of passengers from Manchester and Heathrow going to Atlanta and on to Florida, or to Boston and on to other destinations. About 10% of customers travelling with us to the US connect on to Delta flights.”

Virgin and Delta are both located at Heathrow’s Terminal 3 to make life easy for customers and allow those with flexible tickets to switch flights comfortably.

Jones added: “One of the many advantages of working with Delta is being able to integrate our technology.”

The transatlantic JV will be extended to a three-way partnership with Air France‑KLM next year, when Air France‑KLM will also take a 31% stake in Virgin Atlantic. Jones said: “We’re still working through the agreements and [obtaining] regulatory approval. But it will be an advantage in terms of offering more options to customers.”

‘We have no plan for trade GDS fee’

The travel trade remains key to Virgin Atlantic’s sales, according to Emma Jones.

She said: “Trade bookings are a huge element of our business. Agents are an extension of our internal sales team so we work closely with the trade and focus on educational opportunities. Fam trips are very important.”

Jones’s previous job was as a corporate travel buyer – she joined Virgin two years ago – so she is aware of the challenges agents and travelmanagement companies face now that British Airways, Iberia, Lufthansa and Air France-KLM levy fees on GDS bookings and seek to drive sales via alternative NDC‑enabled channels.

She said: “We’re watching the market, [but] we have no plan to charge a GDS fee. We want our fares in all channels.”

Virgin is working on a New Distribution Capability, but predominately in the business-to-consumer space.

Carrier’s strategy mitigates a ‘tough operating period’

The aviation market to the US is among the world’s most competitive and has been made more so by low-cost flights by Norwegian Air from Gatwick, even as airlines’ costs are rising.

Virgin Atlantic vice-president of sales Emma Jones said: “It has been a tough operating period. The fall in the pound [from June 2016] increased our operating costs, the cost of aircraft leasing and of fuel, and had an impact on the number of UK customers taking flights across the Atlantic.”

Jet fuel and aircraft leases are priced in dollars, which led Virgin Atlantic to report a £14 million loss for 2017. The recent rise in the dollar-price of oil – which hit $80 a barrel at one point last month – has put further pressure on margins. Jones said: “Fuel is a large percentage of our costs. We buy fuel more than a year in advance, but we continue to monitor the impact and keep fares under review.”

Switching to new, more fuel-efficient aircraft is vital. Virgin will take delivery of the first of 12 new Airbus A350-1000s next year. The carrier has yet to reveal the new cabins it will install on the aircraft, but Jones promised: “The A350 will be unrivalled in terms of comfort and reliability.”

Virgin already operates a fleet of Boeing 787 Dreamliners but, in Jones’s words, has “had challenges with the Rolls-Royce Trent engines” on these.

The problem is industry-wide. It has led to a proportion of the 787 fleet being grounded for lengthy periods and meant Virgin has had to improvise to maintain its flying schedule. The carrier acquired four former Airbus A330-200s from Air Berlin in March, which it has revamped and put into service from Manchester and Gatwick. These will have Premium and new Upper Class cabins installed by the end of the year.

At the same time, Jones believes innovations in Virgin Atlantic’s product and service will maintain the carrier’s status. She said: “We recently launched our new economy brands – Economy Delight, Economy Classic and Economy Light – which allow customers to choose the product that suits their budget.”

The fare options are part of a £300 million investment to deliver improvements. Jones said: “We’ve introduced a signature scent called AIR to invoke wellbeing at check-in, in Clubhouses, at airport gates and when boarding. We’ve introduced afternoon tea in the Clubhouse in partnership with a celebrity patisserie chef.”

She added: “We have Clubhouses in all our hub markets, which is a differentiator for us.”

Coming to America: Virgin Atlantic links

Heathrow: New York (JFK and Newark), Boston, Washington, Atlanta, Miami, Orlando, Las Vegas, Seattle, Los Angeles, San Francisco

Gatwick: Orlando, Las Vegas

Manchester: New York, Orlando, San Francisco, Boston

Glasgow: Orlando (seasonal)

Belfast: Orlando (seasonal)

Delta Air Lines: Ex-Heathrow: Atlanta, Boston, Detroit, New York JFK, Minneapolis-St Paul, Portland, Salt Lake City

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