Changes Imminent at Virgin Atlantic

In a press release, Virgin Atlantic announced planned changes and estimated record sustained profitability by 2018.

With reduced international routes and rumors of a shutdown on domestic service in the U.K., Virgin Atlantic remains optimistic that a bright future is just over the horizon. In a press release published September 3, the airline’s CEO Craig Kreeger laid out plans for a strong future, with record levels of sustained profitability as early as 2018.

“Our ambition is to be profitable for the long term, earn competitive returns, and invest those into providing the very best experience for our customers on the routes they most want to fly,” Kreeger stated. “[This] announcement allows us to play to our strengths and focus our network on routes between the U.K. and U.S., as well as other critical global destinations that are most important to our customers.”

The airline outlined a plan that would increase air traffic to the United States by adding daily service from London Heathrow Airport (LHR) to Detroit Metropolitan Wayne County Airport (DTW), Los Angeles International Airport (LAX) and John F. Kennedy International Airport (JFK). Seasonal services will be added from LHR to Hartsfield-Jackson Atlanta International Airport (ATL), Miami International Airport (MIA) and San Francisco International Airport (SFO).

Virgin Atlantic also announced plans to end international routes that include services to and from Cape Town International Airport (CPT), Chhatrapati Shivaji International Airport (BOM), Narita International Airport (NRT) and Vancouver International Airport (YVR). Virgin Atlantic said that these airports would still be served through their network, but direct routes are scheduled to be terminated between October 2014 and April 2015.

The press release also announced increased opportunities to fly to the U.S. as the airline “looks to maximize the benefits” of its partnership with Delta Air Lines. As part of a joint venture, Delta and Virgin Atlantic will exchange flight routes. Delta will take over operations of an existing Virgin Atlantic service from LHR to Newark Liberty International Airport (EWR), while Virgin Atlantic will operate a daily Delta service between Manchester Airport (MAN) and ATL.

In addition to the route changes, Virgin Atlantic also announced a major investment in their passenger experience. According to Travel Weekly, the $483 million plan includes the construction of a lounge at LAX and the instillation of Wi-Fi on every aircraft.

The announcements come amidst rumors that Virgin Atlantic’s U.K. domestic carrier, Little Red, could be shutting down. The Sunday Times reported that the airline is set to close Little Red due to reduced passenger loads. Citing British Civil Aviation Authority Statistics, Air Transport World said the domestic carrier reported an average load factor of only 37.6 percent in 2013.

Representatives from Virgin Atlantic were non-committal in their response to the report, according to published statements. The Telegraph reported that, when asked about the future of Little Red, a spokesperson for Virgin Atlantic said: “We look at Little Red through the same lens as the rest of the business — it must deliver on performance, potential or strategic contribution. Little Red is still in its growth phase, so it is too early to comment on these criteria.”

[Photo: iStock]