Virgin Atlantic is currently celebrating its 40th anniversary. To commemorate this, The Times had an interview with founder Richard Branson, covering so many aspects from the airline (thanks to Creditcrunch for flagging this). I wanted to cover some of the highlights, because Branson had some surprising things to say.
It’s important to keep in mind that while Branson is a billionaire, he’s sort of a marketer and dreamer above all else. He says a lot of lofty-sounding things, and is often light on details. In this post I wanted to cover the four topics from the story that I found to be most noteworthy. In no particular order…
In this post:
Branson thinks Virgin Atlantic will outlive him
There’s no denying that Virgin Atlantic is a much-loved airline, known for its fun culture, and its innovative passenger experience. Now, while people enjoy flying with the airline, the business case for the company is a different story. Virgin Atlantic hasn’t turned an annual profit in nearly a decade, since 2016. Yes, even as other airlines have been reporting record profits in the past couple of years, and the demand for premium long haul travel has been through the rough.
Furthermore, all of this is despite the fact that Delta owns a 49% stake in Virgin Atlantic, and a majority of Virgin Atlantic’s network is part of the Delta, Air France-KLM, and Virgin Atlantic, transatlantic joint venture. If Virgin Atlantic isn’t making money now, one has to wonder what the company is waiting for? Despite the lack of profitability, the airline doesn’t seem to actually do much to change its strategy.
Branson defends himself, saying that people have been talking about the airline disappearing forever, and how Virgin Atlantic is his favorite of all the businesses he started:
“Every decade we’ve had people talking about the Virgin Atlantic brand disappearing. It will outlive myself and, hopefully, outlive my children and grandchildren as well. I’ll fight tooth and nail to keep it going.”
And speaking of children and grandchildren, Branson has revealed his succession plan, and wants his two children to take over the airline. His 42-year-old daughter is currently on the board of Virgin Group, and serves as chief purpose and vision officer, and while his 39-year-old son is an informal adviser to Virgin Group.
Branson promises amazing new Upper Class seat
In something that strikes me as being pure hyperbole, Branson is promising that a new Upper Class (Virgin Atlantic’s term for business class) product will be introduced. He says it will be “ridiculously good,” and “better than BA first class.”
There’s no additional context for this, but I sure am puzzled. Virgin Atlantic’s Boeing 787-9s sure could use a new Upper Class product, but the airline hasn’t announced any concrete plans to update those seats. And while I’m no British Airways cheerleader, when airline executives claim that their business class is better than the first class on other airlines, it literally never turns out to be true.
There’s only so much space that airlines can reasonably allocate to each business class passenger while making the economics work, and this plan defies that. But I think at this point we’d all settle for just about any kind of new 787 Upper Class seat.
Branson says replacing onboard bar was a mistake
Virgin Atlantic used to be known for being one of the few airlines to have an onboard bar for business class passengers. This was consistent throughout the fleet up through the Boeing 787-9.
However, with the Airbus A330-900neo and Airbus A350-1000, Virgin Atlantic has replaced this concept with “The Loft,” which is essentially a lounge area with a couple of benches.
Branson explains that this “was a dreadful mistake,” and says that Virgin Atlantic will “be bringing back the bar as soon as we possibly can.” Now, it’s not clear what that actually means, since I can’t imagine the airline will actually spend the money changing existing aircraft in this way.
Branson wouldn’t go so far as to explain why the decision was made to drop the bar, though some Virgin Atlantic staff say that the investment from Delta has ruined what makes Virgin Atlantic unique, with some even calling the airline “Virgin Atlanta.”
Branson says Virgin Atlantic will return to Gatwick
At the start of the pandemic, Virgin Atlantic discontinued flights from Gatwick Airport (LGW), instead focusing London-area operations on Heathrow Airport (LHR). After all, Heathrow slots are more valuable, and the carrier shrunk at the start of the pandemic.
Branson says that the airline will announce new routes to North America soon, “some of which will eventually be from Gatwick.” Virgin Atlantic still has slots at Gatwick Airport, which are being leased to EasyJet. But Branson feels strongly about returning to the airport, saying:
“It matters — it’s where we started. I will twist arms.”
I’m not sure what exactly that will look like. Virgin Atlantic isn’t really growing all that much — the airline is taking delivery of A330-900neos, and retiring A330-300s in the process.
Sure, the airline will see some modest growth, so I guess eventually maybe we’ll see a plane or two based at Gatwick Airport? Still, I’m not sure a lack of Gatwick flights is why Virgin Atlantic is losing money.
Bottom line
Virgin Atlantic is celebrating its 40th anniversary. That’s quite an achievement, and the airline has done a lot to innovate the passenger experience. Branson gave an interesting interview for the occasion, which leaves me scratching my head.
I’m not sure what to make of these updates, but Branson insists Virgin Atlantic will bring back the Upper Class bar, is promising a “ridiculously good” new Upper Class that’s better than British Airways first class, and says that the airline will return to Gatwick. Furthermore, despite the airline reporting annual losses for nearly a decade, he insists the airline will outlive him.
What do you make of this interview with Richard Branson?
I never understood why VS limited itself to be a British-only airline. With their premium concept and focus on the US (where open skies treaties with the EU are in place), they could've expanded to other member states so that their growth is not limited by LHR, and also to be a bit less dependent on the UK economy. Of course in the hindsight it's probably better since they're no longer an EU carrier and...
I never understood why VS limited itself to be a British-only airline. With their premium concept and focus on the US (where open skies treaties with the EU are in place), they could've expanded to other member states so that their growth is not limited by LHR, and also to be a bit less dependent on the UK economy. Of course in the hindsight it's probably better since they're no longer an EU carrier and would have to close (or sell) non-UK operations. But back in the day it would make a lot of sense to me.
The problem is that most Virgin flights go to the USA or Caribbean countries (effectively treated as US$ countries ) and Brits on average genuinely don’t want to or can’t afford to go to these countries any more. I’m a business professional and used to take the kids to Florida. No way I could afford that nowadays. We used to regularly holiday in the Caribbean in Feb but nowadays the majority of the tourists are...
The problem is that most Virgin flights go to the USA or Caribbean countries (effectively treated as US$ countries ) and Brits on average genuinely don’t want to or can’t afford to go to these countries any more. I’m a business professional and used to take the kids to Florida. No way I could afford that nowadays. We used to regularly holiday in the Caribbean in Feb but nowadays the majority of the tourists are Americans, everything is priced in US$ and even the bulk of the food comes from the USA. We fly to Asia nowadays where hotel quality is far superior, staff are fantastic, tips are minimal and food is high quality and cheap. Sadly Virgin don’t fly to Asia except for China. The world has changed and Virgin don’t seem to get it. Plus their cash fares are extortionate.
Except ONS data doesn't backup your personal experience!
US remains the largest non-European destination from the UK and the only one in the Top 10. Barbados, Mexico, Canada and Jamaica are also large holiday destinations for Brits. Over 3m visits to North America & Caribbean vs 1m visits to Far East Asia vs 1.4m to India and Middle East.
Asia is very hard to make work for European airlines at the moment due to Russian...
Except ONS data doesn't backup your personal experience!
US remains the largest non-European destination from the UK and the only one in the Top 10. Barbados, Mexico, Canada and Jamaica are also large holiday destinations for Brits. Over 3m visits to North America & Caribbean vs 1m visits to Far East Asia vs 1.4m to India and Middle East.
Asia is very hard to make work for European airlines at the moment due to Russian airspace restrictions. Thailand is a large holiday market, but the yields are too low (high backpacker) with little business demand to make it work.
Also US is the #1 market for tourists visiting the UK so inbound traffic is high.
I flew Virgin from Heathrow to JFK yesterday and I did think it was a cut above other airlines I have flown on that route which are BA, Delta and American.
I chose an A350 because I knew it would show Virgin off to its best. But the fun British personality began with a very chatty and warm person at check in. The TV screens in economy were huge and while the first meal was...
I flew Virgin from Heathrow to JFK yesterday and I did think it was a cut above other airlines I have flown on that route which are BA, Delta and American.
I chose an A350 because I knew it would show Virgin off to its best. But the fun British personality began with a very chatty and warm person at check in. The TV screens in economy were huge and while the first meal was ho hum, the second economy meal was a cute little afternoon tea with a bagel and then a scone served with jam and clotted cream offered with a sparkling rose.
It was these little touches which would encourage me to choose Virgin again.
I have flown Virgin overnight to the UK on an older A330 and that was not as great - slow service and one hot meal, so this was better.
But, to be clear, it was astronomically better. Just a cut above.
When I hear Richard Branson say 'new routes, new business class' all I have to remind myself of is their London - Sao Paulo route. On, off, on again, off again. I have never seen so much hype from an airline over something that never even happened.
See, what most people don't realize is there's a pre DL VS and then there's a DLVS.
The former VS is the 787 with bars or the supposed to be A380 with casino and gym. The flashy Clubhouse. The spa. etc.
Then there's the DLVS with the A330neo and A350 with the dreadful "Loft" in a quest to seek profit.
Can't really blame RB for that since he already sold his soul for cash.
Right Tim?
I've flown with them a few times since the pandemic with work and have found them to be better than what's offered by BA and as I'm based in the north of the UK, their leisure offering from Manchester is extremely welcome... However! For leisure, they are just so expensive it doesn't make sense to fly virgin. And premium economy is so overpriced that that doesn't make sense either.
For example, a direct flight from...
I've flown with them a few times since the pandemic with work and have found them to be better than what's offered by BA and as I'm based in the north of the UK, their leisure offering from Manchester is extremely welcome... However! For leisure, they are just so expensive it doesn't make sense to fly virgin. And premium economy is so overpriced that that doesn't make sense either.
For example, a direct flight from Manchester to Orlando at peak time will cost over $2500 more for a family of 4 when compared to Norse direct from London, and $1000 more than BA from London.
And premium economy is usually over double the price of an economy ticket. Whilst I'm fortunate I can afford it, I choose not to because I'd rather travel on a whole other adventure where I'm sat in economy, than be a little more comfortable for just a few hours.
The Trump of aviation - lots of hyperbole but nothing seems to eventuate into reality
Everything Virgin and Branson does is always to quote a common British phrase "all fur coat and no knickers". They don't really innovate or do anything different in any industry they get involved in, and often it is just a lot of PR and branding, which never lives up to the reality of the experience. Even the product isn't consistent in quality - ask anyone who has flown to India or China with them and they'll tell you how at best mediocre it is.
Virgin is a classic case of trying to cost cut to profitability. It doesn't work. Virgin was successful because people loved it enough to choose it over other carriers in all classes. There was a time when they were far superior to BA in every way. From the Upper Class lounge with the spa and all sorts of cool treats, to the onboard experience with over the top amenities, the bar and the masseuse on...
Virgin is a classic case of trying to cost cut to profitability. It doesn't work. Virgin was successful because people loved it enough to choose it over other carriers in all classes. There was a time when they were far superior to BA in every way. From the Upper Class lounge with the spa and all sorts of cool treats, to the onboard experience with over the top amenities, the bar and the masseuse on board, to arrivals with showers that were then new and actually had amenities, another spa that stayed open until 2pm (now it's 12:30) to transfers to and from the airport.
Their premium economy on most routes was actually comfortable (think old business class) and I hear they were fun in economy.
Their newer Upper Class seats are solid and overall better than BA's new seats. Both airlines have planes with old seats that suck in part of their fleet, so that's a wash. But their premium economy has gone downhill. Spas all gone. Masseuse on board gone. Transfers gone. Amenities basic now, although they still have nice PJs! Premium economy seats no longer a differentiator. They're not cheaper (in fact I flew BA last week because VS was 4.5x more expensive). So, what do they have going for them now? Still better lounges than BA, especially at outstations. Friendlier staff, generally and their cheeky reputation. They can attract people who hate BA/Oneworld or are Skyteam loyalists.
If you don't have massive European connectivity out of LHR which they don't, you need to make people WANT to book away from BA and they don't have a compelling case anymore. It's not a coincidence in my mind that they haven't made money since 2016, as they accelerated the cuts in the years before that.
I used to love Virgin to the point that I annoyed my boss. Now I just like them better than BA and I make my choice on cost and which alliance I need to top up my status (as DL Diamond and AA EXP). And that makes me kind of sad. I miss Virgin and I hope Richard Branson brings it back.
Well it depends on your definition of successful. Superior to BA in every way... apart from profitability. It underperformed for Singapore Airlines. it bought the stake for £600m and sold it to Delta for £224m. And had lost money in 12 out of the last 18 years.
I recently flew Virgin Atlantic Upper Class on the A350 LHR to LAX and I will never fly Virgin again. Their new seat in the A350 while more comfortable to sleep in is one of the most cramped and unintuitive seats Ive ever had -- impossible to find a good relaxing position with buttons that dont operate properly. The wifi was dreadful and wouldn't connect with my computer and nobody had any solutions. The food...
I recently flew Virgin Atlantic Upper Class on the A350 LHR to LAX and I will never fly Virgin again. Their new seat in the A350 while more comfortable to sleep in is one of the most cramped and unintuitive seats Ive ever had -- impossible to find a good relaxing position with buttons that dont operate properly. The wifi was dreadful and wouldn't connect with my computer and nobody had any solutions. The food was literally unidentifiable - like it had been purchased at Amazon as a prepared meal with meager portions. The only + was the flight staff who tried hard... All this was better than the 787 Upperclass flight and thats saying something... Virgin Atlantic is significantly worse than any US carrier's biz class product at this point. Its only point of comparison is BA's old Biz Class seating which inexpicably still is what they use on all their 777 flights from LHR to LAX... Branson is delusional at this point. The bar is the least of their problems.
I hear a lot of hate for the 787 seats, but their great advantage is that you can actually see the other people in J from your seat, which helps to foster the communal-party vibes that are VS's unique selling point. Yes, sometimes, I just want to sit in my seat and work/sleep/read and not be bothered... and at those times, I don't fly VS. When I fly VS, it's because I want to party...
I hear a lot of hate for the 787 seats, but their great advantage is that you can actually see the other people in J from your seat, which helps to foster the communal-party vibes that are VS's unique selling point. Yes, sometimes, I just want to sit in my seat and work/sleep/read and not be bothered... and at those times, I don't fly VS. When I fly VS, it's because I want to party with the rest of the J cabin, make new friends, network, etc., which has never happened to me on an A350.
I’m interested though as I have never flown VS J are other people also in this mood (or partying,networking etc.)?
Also unless you book your flight within a few days it’s pretty hard to anticipate what you are going to feel like doing.
I can't speak for all the flights, but I usually do VS J on daytime LHR-->LAX flights. Due to the nature of that flight, most of the J cabin is filled with entertainment industry people (of which I am one), and on the 787s, I usually end up getting drunk with everyone, exchanging numbers, making friends/connections, etc. It's really a one-of-a-kind flying experience!
Seems like "Delta!" is just a convenient scapegoat for the angst of Virgin employees and nostalgic loyalists, which is sort of ironic, considering that DL is likely the only reason that Virgin Atlantic still exists. In the last decade:
* VS failed multiple times at building a feeder network;
* They didn't command the highest premium nor the most traffic, in any single longhaul market;
* They didn't have any routes...
Seems like "Delta!" is just a convenient scapegoat for the angst of Virgin employees and nostalgic loyalists, which is sort of ironic, considering that DL is likely the only reason that Virgin Atlantic still exists. In the last decade:
* VS failed multiple times at building a feeder network;
* They didn't command the highest premium nor the most traffic, in any single longhaul market;
* They didn't have any routes east of Heathrow where they weren't 3rd-fiddle or worse; and
* Their financial performance was so underwhelming that even Singapore threw up its hands and offloaded VS at the first opportunity.
This was all pre-Pandemic, so that can't be blamed either. Virgin was a mess, and not much has really changed today.
As much as AvGeeks might not wish to hear it: Delta throwing Virgin a bone, in exchange for a few mundane routes (that basically act as strawman-LHR slots), is probably the best thing that VS currently has going for it.
True.
DL made it possible for VS to survive.
It's just not the same VS we grew up loving anymore.
I'm a silver Virgin and flew to London in the back - fortunately quite empty - in a row of four rather than take the old upper class from IAD a few weeks ago. It's costing them money.
this just simply highlights that their strongest US stations are DL hubs and their biggest challenges are in other airline hubs and against other alliances.
Their feed on the LHR end is negligible, and the airport isn't even really connected to the national rail network (so passengers based outside the London area typically prefer flying from their local airport via a European hub), so there just isn't that much point to point demand to the smaller US destinations. I am sure their flights to popular holiday destinations like Orlando and ANU sell out without much DL feed.
So likely...
DL supported: ATL, BOS, JFK, LAX
Holidays supported: LAS, MIA, MCO, TPA
Challenged: IAD, SFO
I've flown the new Virgin planes with the loft, and I 100% agree with Sir here. Virgin used to be known as a fun airline with cheeky "Cool Britannia" vibes. The on-board bars were a big part of that. The loft is basically a wasted space, a staging area for FAs or unused at all. No one knows what to do with it. I have sat in the lounge, working and ordering drinks just to try something different, but it wasn't fun.
If they're doing so bad i cant understand why they would yet spend so much money on new planes and get rid of the A330-300 that are not even 15 years old. some are as young as 11 years.
Probably leases. Better operating economics may outweigh the increased lease costs.
TBH, even the A350 business class isn't all that great
I wish they will start flying again to EWR
VS gave it’s LGW lounge to Plaza Premium - I wonder if the intention is to get it back, or if the Gatwick experience will come with a huge quality hit.
Everything about Gatwick is a quality hit. The terminals with no seats and rubbish shops, bad parking, horrible gate areas and the rudest passengers in Europe. The only saving grace are the staff there who are lovely.
"... premium long haul travel has been through the rough."
Through the ROOF, I think
Yes to bringing back the bar!!!
VS could actually be really good if they fixed their 787s.
They have a fairly decent lineup of destinations like the Maldives and others, but every single route that's non NA based is a 787.
All things aside, they have top tier business class lounges, food, and a solid loyalty program.
you'd think Sir RB might be a little more focused on announcing a refit program for the 787 Upper Class rather than lamenting the social space vs the bar
The original concept for Virgin Atlantic of being a point to point longhaul carrier in another carrier's hub was as much of a failure as AA thinking they could be a niche carrier at JFK.
After years of Branson believing he could fix VS on his own, DL's need to be bigger at LHR gave them the reason to pump billions into VS and it has worked for both airlines. VS' TATL flights in...
The original concept for Virgin Atlantic of being a point to point longhaul carrier in another carrier's hub was as much of a failure as AA thinking they could be a niche carrier at JFK.
After years of Branson believing he could fix VS on his own, DL's need to be bigger at LHR gave them the reason to pump billions into VS and it has worked for both airlines. VS' TATL flights in combination at least have significant feed on the US end. VS has managed to add enough beyond-LHR flights to create some decent connections which benefits DL and VS.
As for the Loft, people do use it but they liked the ability to drink while shooting the breeze. It does succeed at moving conversations out of the main business class cabin.
As for LGW, it is all about creating size and scale which VS needs in order to be profitable. With the right flights, LGW can work in addition to LHR.
"After years of Branson believing he could fix VS on his own"
Ummmm Singapore had a 49% stake since 1999! RB wasn't trying to do anything on his own.
What "billions" did DL pump in? They acquired the 49% stake from Singapore for $360m and a further $255m bailout during COVID. Nothing else because they can't increase their ownership beyond 49%.
LGW will be about Virgin Holidays air/hotel packages to Florida and Caribbean. Thats...
"After years of Branson believing he could fix VS on his own"
Ummmm Singapore had a 49% stake since 1999! RB wasn't trying to do anything on his own.
What "billions" did DL pump in? They acquired the 49% stake from Singapore for $360m and a further $255m bailout during COVID. Nothing else because they can't increase their ownership beyond 49%.
LGW will be about Virgin Holidays air/hotel packages to Florida and Caribbean. Thats where Virgin really makes money and Holidays provides the volume.
I don't know why they don't shift all the 787s and A330 (non-neos) to LGW and make them all leisure routes (Caribbean, Vegas and Orlando).
Then you would be sure if you were flying from Heathrow that you won't get the awful Upper Class confin.
That's an easy answer:
Because if they don't have enough aircraft (currently nor on order) to do that, while maintaining their extremely valuable Heathrow slots, which they will lose if they don't continue to operate consistently.
Not quite... as they could lease out their LHR slots...
I just think it is much more efficient and economical to keep at one airport than split across two airports and LHR commands better yields. Once they run out of slots at LHR they may shift some leisure to LGW.
VS is such a difficult enigma to decipher. As a DL loyalist, I fly VS on every route I can because the product holistically is far superior to DL’s. On the other hand, they don’t make money…so the experience premium isn’t sustainable. I get the frustration of “Virgin Atlanta” completely, but DL is also keeping them afloat.
and DL had nothing to do with the end of onboard massages or elimination of the bar.
DL would never have either of them or "waste the space" for a lounge.