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…
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?
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