Virgin Atlantic Reveals MASSIVE Growth Aspirations

Filed Under: Virgin

Virgin Atlantic has just presented a fascinating vision for the future, which could see the airline going from their current 19 destinations to 103 global destinations. That’s right, the airline wants to add 84 new routes… allegedly.

Heathrow May Be Getting A Third Runway

Heathrow Airport is more or less at capacity, and for years there have been talks about the possibility of a third runway being built. While this could very well change, currently the plan is that the airport could get a third runway by 2026 (personally I’d be shocked if that timeline sticks).

If this happens, the plan is for the airport to continue to expand capacity in stages, with the goal of having a capacity of 150 million passengers per year by 2050. With a third runway, we could be looking at an extra 700 flights per day to the UK’s busiest airport.

British Airways Is Against Heathrow’s Third Runway

As you might expect, Heathrow’s third runway is incredibly controversial.

Generally speaking, environmentalists and area residents are against the third runway. Similarly, British Airways is against the third runway. IAG (the parent company of British Airways) controls about half of the capacity in & out of Heathrow, and this gives them tons of pricing power. They have the monopoly as London’s global airline. Additional slots translates into additional competition and lower fares, something British Airways most definitely doesn’t want.

Conversely, most other airlines are in favor of Heathrow expanding, as it would give them a lot more access to the market.

Virgin Atlantic’s Huge Expansion Goals

Virgin Atlantic has just shared their bold vision for the future, which would see them giving British Airways competition on a global level.

Obviously Virgin Atlantic is trying to create a compelling case for them to be granted lots of slots with the construction of the third runway, arguing that consumers would benefit from British Airways no longer having what amounts to a monopoly.

As Virgin Atlantic CEO Shai Weiss describes the plans for the airline:

“Never has the need for effective competition and choice at Heathrow Airport been more evident than during this summer of disruption, which has brought misery for tens thousands of travellers. Britain, and those who travel to it, deserve better than this. Air passengers need a choice and Virgin Atlantic is ready to deliver when Heathrow expands.

Heathrow has been dominated by one airline group for far too long. The third runway is a once in a lifetime opportunity to change the status quo and create a second flag carrier. This would lower fares and give real choice to passengers, as well giving Britain a real opportunity to boost its trade and investment links around the world. Changing the way take-off and landing slots are allocated for this unique and vital increase in capacity at the nation’s hub airport will create the right conditions for competition and innovation to thrive.”

Virgin Atlantic’s 84 New Destinations

Virgin Atlantic wants to add 84 new destinations in the UK, Europe, and across the globe, in addition to their current 19 long haul destinations.

How would the 84 proposed Virgin Atlantic routes be distributed?

  • 12 would be domestic, including to Belfast, Glasgow, and Manchester
  • 37 would be European, including to Barcelona, Dublin, and Madrid
  • 35 would be global, including to Buenos Aires, Jakarta, and Kunming

Here are a couple of maps showing the destinations they intend to add service to:

Here’s a full list of the destinations they want to fly to, with the bolded ones representing routes they already fly:

Aberdeen, Britain Abu Dhabi, UAE Accra, Ghana
Addis Ababa, Ethiopia Amsterdam, Netherlands Athens, Greece
Atlanta, USA Auckland, New Zealand Austin, USA
Bangalore, India Barcelona, Spain Basel, Switzerland
Beijing, China Beirut, Lebanon Belfast City, Britain
Berlin (Tegel), Germany Bogota, Colombia Boston, USA
Brussels, Belgium Budapest, Hungary Buenos Aires, Argentina
Calgary, Canada Cape Town, South Africa Chicago, USA
Cologne, Germany Copenhagen, Denmark Cork, Ireland
Delhi, India Denver, USA Dublin, Ireland
Dusseldorf, Germany Edinburgh, Britain Exeter, Britain
Fortaleza, Brazil Frankfurt, Germany Geneva, Switzerland
Glasgow, Britain Gothenburg, Sweden Guernsey, Britain
Hamburg, Germany Havana, Cuba Helsinki, Finland
Hong Kong, China Inverness, Britain Istanbul, Turkey
Jakarta, Indonesia Jersey, Britain Johannesburg, South Africa
Karachi, Pakistan Kolkata, India Kunming, China
Lagos, Nigeria Las Vegas, USA Lima, Peru
Lisbon, Portugal Liverpool, Britain Los Angeles, USA
Luxembourg, Luxembourg Lyon, France Madrid, Spain
Manchester, Britain Mexico City, Mexico Miami, USA
Milan, Italy Moscow, Russia Mumbai, India
Munich, Germany Nairobi, Kenya Newark, USA
New York JFK, USA Newcastle, Britain Newquay, Britain
Nice, France Orlando, USA Osaka, Japan
Oslo, Norway Panama City, Panama Paris, France
Prague, Czech Republic Raleigh Durham, USA Rome (Fiumicino), Italy
Rotterdam, Holland San Diego, USA San Francisco, USA
Santiago, Chile São Paulo, Brazil Seattle, USA
Seoul, South Korea Shanghai, China Singapore, Singapore
Stockholm (Arlanda), Sweden Stuttgart, Germany Sydney, Australia
Tel Aviv, Israel Tokyo (Haneda), Japan Toronto, Canada
Toulouse, France Vancouver, Canada Vienna, Austria
Warsaw, Poland Washington DC, USA Xi’an, China
Zurich, Switzerland

Is Virgin Atlantic Serious?

There’s certainly an element to all of this that makes you wonder if Virgin Atlantic executives have lost their minds. After all, it’s not often that you see an established global airline say “oh yeah, we just want to quadruple in size in seven years.”

There are obviously lots of logistics standing in the way:

  • The airline would have to order dozens and dozens of planes to make these routes work
  • Some of these routes make me scratch my head, like how they would fly to Auckland or Sydney; would these be tag flights, and if so, do they really think those will be profitable?

Personally my take here is that Virgin Atlantic is somewhat serious. They want to create a case for the value to travelers in having a second “flag” carrier. This announcement certainly proves that point, and paints a picture of what could be.

However, I also think they realize this is highly unlikely. Heathrow is a slot restricted airport, and slots are bloody expensive. While the per slot cost will obviously go down if a third runway is built (simple supply and demand), the cost for Virgin Atlantic to acquire all of these slots will no doubt be prohibitively expensive.

Here’s The Catch

Virgin Atlantic’s CEO specifically says how he wants the airport to change the way slots are allocated. It sure seems to me like Virgin Atlantic basically wants to be given dozens and dozens of slots for free because they feel it benefits consumers to have a second flag carrier.

I’d say it’s highly unlikely this comes to fruition, but that won’t stop Virgin Atlantic from dreaming… and I commend them for that, because British Airways sure needs some competition.

What do you make of Virgin Atlantic’s desired massive expansion at Heathrow?

Comments
  1. Chicago coming back? They cut that a few years as they couldn’t compete with the plethora of BA and AA flights.

  2. They want to do Jakarta, despite the only airline which used to serve it nonstop bled heavily on the route? Let’s be real, this is simply their case of “what could be, if you proceed”. Though whether or not market conditions will allow for it is of course another story

  3. I would love to see Virgin Atlantic to start flights to all of those cities. It can be a short haul and a long haul airline. We just have to wait and see. If A will stick to there plan.

  4. I’d love to see an Orlando to Heathrow. Even though they already operate 2 to 3 x daily to Orlando from Gatwick, LGW doesn’t have enough connections.

  5. I don’t think they are that serious about the domestic/Euro expansion unless they want to sit on slots once they get them. They tried it before and failed. It truly sucks for them to have to split operations right now between LGW and LHR, but maybe they can double down on LGW if the 3rd runway doesn’t work out?

  6. BA, much like AA, wants to survive based on slot squatting. They have no actual interest in competing by running a superior airline but instead want to deliver the absolute bare minimum viable product while shaking down the market. There’s a reason AA is giving up on JFK and Boston where customers will happily take their business over to a better airline. It’s the same reason BA’s terminal at JFK looks like a condemned garbage dump.

    With their new product Virgin is delivering an experience in business class that is better than BA in First when you factor in the ground experience. BA opposes expansion because no way in hell would anyone fly them if you can take your business to Virgin (or in the future JetBlue.)

  7. I’d agree this is mostly about getting the runway, but if they do start flying connecting flights in Europe that could scale up rapidly. Especially leveraging their JV with Delta.

  8. Virgin hasn’t had much luck in the past with UK domestic and intra-European efforts. Think Virgin Atlantic Little Red with wet lease EI aircraft, or further back Virgin Express (now part of Brussels Airlines). Especially with more Europeans favoring high speed train travel, I don’t see much intra-Europe capacity growth. Globally, yes.

  9. They could grow by acquisition. They’ve already bought Flybe who serve the domestic airports and they can expand them and/or redirect flights to LHR.

    For long haul there are two ailing airlines out there right now they could acquire; Thomas Cook and Norwegian. They have an aircraft fit with both of them (A330 for TC and 787 for Norwegian) and lots of slots at Gatwick. Yes I know Gatwick isn’t Heathrow, but they could start some operations well before 2026 from LGW and switch to LHR when the time is right.

    If Ed Bastian wants to do it, he will.

  10. This is actually genius. I don’t think they really want the full list, but really to drive a discussion on slot allocations and competition. I think they are trying to leverage their position as a distant number 2 to get some competition remedies. Classic situation where you Shoot for the stars, but you just might get to the moon

  11. I mean, as far as Intra-European flights go, given the possible acquisition of FlyBe, a serious expansion in the market wouldn’t be too out of the question.

    Should it go through, its possible VS might reduce some of the other FlyBe markets and consolidate them all into Heathrow?

  12. Most of those domestic and European routes are already part of the FlyBe network. If the takeover goes ahead there wouldn’t need to be much of a fleet investment. Whether they can make these routes profitable is another matter. Obviously it would need a massive investment in long haul fleet to make these plans work. I think part of the announcement is political but it’s not inconceivable some of these new routes will happen.

  13. grabamile.boardingarea.com,

    You overlook the fact that Virgin recently bought FlyBe, with its extensive domestic UK network.

    BA doesn’t really fly out of regional UK airports, other than to London.

  14. I think that slots need to be re-auctioned every decade at slot constrained airports. That would actually help, you know, the customer.

  15. Virgin for a long time served Sidney and that was cancelled. Nairobi was quite short lived. Currently, BA apparently serves as the short haul feeder for Virgin. I often see virgin flight offers from Germany and BA is always the feeder.

    Yes, the airline could use short haul routes esp to the rest of Europe. Domestic UK doesn’t work so well and that’s why ‘London Airways’ has with time limited these.

    Getting old planes shouldn’t be an issue though……papa Delta loves them all old but extra polished.

  16. My favorite are those flights to Karachi (Pakistan) and Orlando from Heathrow! I’m pretty sure that would be Orlando’s first flight to Heathrow (meanwhile they have a bunch of flights to Gatwick).

  17. @Ray
    Let’s be honest. Garuda isnt a very well run airline, and their London route was an example of them at their worst. I imagine if VS ever serves Jakarta, they’d do it with some very efficient 787s that are the right size for the route, on a schedule that’s great for US connections, and with the right frequency over a long period of time so that business come to depend on it.

  18. I see this as studied and viable. Fortaleza is a perfect example. Booming area for tourism, closest major S.A. hub to Europe with feeder flights all over NE Brazil and Air France and KLM are quietly killing it there. They are going for the potential. Not the obvious. Love it.

  19. Ed Bastian should take a stake in Norweigan and drop their Alitalia Bid.

    If VA bought Norweigan, they would gain a major stronghold at Gatwick and intstanly expand their European presence.

  20. Overly, dangerously ambitious which, if realized, will bring down Virgin as a going concern. Might be that only 5 to 15 percent of the new cities on the list become a reality over 7 years. I agree with some who said it would make sense to acquire Norwegian or Tho. Cook to bring in quickly the aircraft, slots and reduce costs – depending on the outstanding debt of these two. Norwegians 787s can fit into the mid-range to long-haul cities, Tho. Cook’s aircraft can fill in the European routes that Virgin is thinking about. It’s also possible that Virgin acquire one of the Spanish LCCs, e.g. Vueling for their European plans. Many of the city pairs on the list are already saturated and don’t have a economical business plan hope of realization;

  21. I find it funny that they think TXL will still be open in 7 years (in all fairness I do too) which means BER would be only 18 years delayed at that time.

  22. I’m sorry Lucky but you are wrong. LHR slots are bloody expensive, but that’s on the secondary market (airlines buying them from other airlines). New slots are free – not only in LHR but everywhere. What VA wants with this is to lobby for regulators to not give away slots according to IATA rules (which all countries, stupidly, follow), where incumbents get the new slots on the same proportion that they currently have (so, BA has 50% of current slots, would get first dibs on 50% of the new ones; this is what VA doesn’t want).

  23. Right now, Virgin is mostly a point-to-point international carrier. I’d love to see the stat on how few of their customers connect through London.

    In order for them to become a large scale network carrier, they’re going to need regional feed. With the exception of Emirates, network carriers usually rely on a combination of short-haul and long-haul connectivity. Europe is a really tough regional market. The ULCCs murder the legacy network carriers and their LCC subsidiaries. I don’t know how one can break into this saturated market.

    All the growth is in mainland China and greater Asia. Are there good opportunities to provide long haul there?

    I know it’s often extremely profitable to provide service to/from London, but how much more O&D can the market support?

  24. No PDX
    No MSP
    No DTW
    I guess Ed Bastian has other ideas or just can’t spread the love.

    No BKK or DPS.
    VS probably has no idea where Brits like to go.

    And KMG!!!!!!!!!!!
    There are at least 5 better cities in China to fly to than KMG. Odd places like RDU does have heavy business link, but I can’t think of anything in KMG.

    My conclusion is VS is just randomly messing around without a well though excuse. This is even worse than DL getting PDX-HND.
    Maybe someone can give me a better picture?

  25. Given that Virgin gave up many of these routes just a couple of years ago (eg Cape Town, far east), this is clearly just a game.

  26. This is pure PR b/s, designed to push for the 3rd runway (which is still by no means certain).

    The UK is geographically tiny, especially when you look at where on the islands the population is actually living, so it’s never had much of a shorthaul market; and when you look at how many of the routes with significant traffic levels are served by fast and frequent rail links, air really struggles to compete: London-Manchester is now >95% rail, even London-Edinburgh/Glasgow is almost all rail. That leaves airlines fighting over traffic in cities like, er, Inverness, Aberdeen, maybe Plymouth. It’s not rich pickings.

    AirUK was maybe the last decent-sized, domestic-focussed airline. Think of it as a UK version of Porter. They ended up losing money and being bought by KLM, who abandoned pretty much all the intra-UK routes and turned them into a feeder to Schiphol, rebranding it into their KLM CityHopper family. Somehow KLM seems to make that work, though I’ve no idea if it’s profitable.

    Equally, it’s good to see some love for both Bogota and Fortaleza; I suspect both are currently under-served with decent options from NW Europe.

    @Alpha
    “They have no actual interest in competing by running a superior airline but instead want to deliver the absolute bare minimum viable product while shaking down the market.”

    You’ve just described the goal of every business — to have a monopoly supply from which they can generate super-rents. Why would BA be any different?

    “With their new product Virgin is delivering an experience in business class that is better than BA in First when you factor in the ground experience”

    But now I think you’ve never actually flown either airline.

  27. I believe, if they opened, a flight wat from Manchester to Tampa, be really good,it would stop going, via Atlanta, Ams, JFK, ( say maybe three times a week.)
    The new Delta flights from Ams to Tampa, seemed a success.Delta are starting Man to Boston, in May 2020. we will wait and see.

  28. A direct flight from LHR to Kolkata would be great, as this market is not served by any airline. No BA or Air India.

  29. You trade very little about the fact that on their new planes they are shrinking the width of premium economy by almost 3 inches!

  30. Even if the third runway was to open in 2026, that does not include increased terminal space! Terminals will come at a later stage and progressively. That will happen in subsequent years. Therefore even if Virgin is serious, this growth plan is more a 12-15 year growth plan.

  31. Being mostly owned by Air France KLM and Delta it makes sense for all transfer traffic to go via Amsterdam or Paris from the UK. It’s overly ambitious for an airline with just 47 long haul aircraft to fly to destinations already mostly served by their owners I suspect Flybe could be rebranded as FlyV. But VS need to have least 100 longhaul aircraft if they want to realise their ambition However I don’t think they can do much without the input of their majority shareholders Air France KLM and Delta

  32. If this happens it will be great to FINALLY book through on Virgin to DUB!! The amount of traffic they source from the Irish market to leisure routes is huge but only possible through an OTA booking where the short hop to/from DUB/ORK and LHR/MAN/LGW is served by Aer Lingus or BA. Not to mention, regional/narrowbody aircraft in the VS livery will be awesome to see! 🙂

  33. Would they introduce local attire to be worn by cabin crew for the flights to KHI. British Airways hired locals as cabin crew to work those flights. Now that BA is back in ISB I don’t think they have any local hires or the local attire worn onboard.

  34. @Rui N.

    I was just reading the current version of the IATA slot guidelines and I don’t see any reference to additional lots being divided up as you describe.

    Section 8.3.5 says that 50% of slots in the unallocated slot pool, including any newly created slots, should be allocated to “New Entrants”, who are defined as airlines using less than 5 slots on that day – so Virgin would not be eligible.
    The other 50% (or more if not enough new entrants apply) are then allocated according to various criteria – for example going year round on an existing seasonal route takes priority over a new routes. These criteria can include competition policy and “local guidelines”

    You are correct that an airline does not have to buy slots form the slot pool – only if they buy them from another airline.

  35. @ Kbulo,

    TXL has been shitting down for years. You probably mean “Shut down”. The answer is “Who knows?”. BER, Berlin Brandeburg is siome 10 years late, no opening date has been announced and the airport is on the way to becoming the “Spruce Gooce” (Howard Hughe’s giant “Hercules”, which at least flew once… and is now parked in Long Beach near the Queen Mary).

    Just like Brexit, BER may NEVER happen.

    That nobody has been jailed on this account, by the way, is scandalous in view of the costs, waste and

  36. Didn’t Virgin have a shot at expansion years ago through acquiring British Midland ? Obviously, it failed.

    As far as I am concerned, Britain only needs ONE flag carrier but it doesn’t have to be BA. These things change. The USA once had a flag carrier. It was called PANAM…

  37. VS may fly to Jakarta via Singapore which AF, LH, TK and EK used to do. SIN-CGK is the world’s busiest international route by flight numbers but many flights go out full especially on weekends and prices are gone up of late so there may still be some spare capacity there for VS.

  38. @TheNicePaul

    Why would you assume that? I’ve flown both BA first and Virgin Upper Class. While the old herringbone Virgin seats were weak, the soft product and ground experience were fantastic. Now with a comparable hard product to BA’s first class I can’t imagine preferring BA first (Virgin also has air vents and working power outlets so double win.)

    BA first’s ground experience is *weak* and feels like a budget cut version of what Virgin offers in *business* class. The employees are surly, the spa is overbooked, the decor is low class, the food is rubbery, and everything is understaffed.

    Taxpayers subsidize these airlines. If all we’re going to get is a shakedown because they’re competition averse then they should lose their slots.

  39. This is why it should never have been allowed for BA to take over bmi. Virgin were the other contenders in the bid to buy it and despite it going to the competition commission it still went ahead and BA bought bmi who had the 2nd most slots after them. Had it gone to Virgin, which they did argue at the time, back in 2012, this wouldn’t have happened…

  40. @lucky small mistake in the article. Rotterdam is not in Holland (technically it is in south-holland province) but in the country The Netherlands. It’s correct for AMS though.

  41. As Tom, Neil, and USBusinessTravel have pointed out they [are part of the consortium that has] bought FlyBe. They’re partnering in that consortium with Stobart and have formed a new group called Connect Airways Limited – this group has acquired Fly Be, Propius, Stobart Air, and has arrangements with Logan Air and other small regional partners. Many of these are PSO contracts (like some of compass air’s routes in the US) with guaranteed revenue on underserved and vital point to point routes. The Virgin brand will bring awareness to those places as destinations, and will also unify the various entities under one booking system and umbrella, meaning that these customers when they travel internationally, will start to develop loyalty. They will mostly be flying ATRs, dash 8s and Embraer E170/190s, with huge room to grow from the new liners coming out over the next while, such as the C-series/A220 and also second hand planes like the Avro RJs and Embraer jets that are being retired by most operators. In many of these markets, they’ll have exclusivity on the routes.

    Virgin have obviously learnt from their mistakes in wet leasing EI A320s for Little Red, and were very clear that the reason that did not work is that it was based on feeder flights interlining to Virgin Atlantic long haul, and it just wasn’t realistic to sell 174 seats each flight. The standalone little red brand was also a mistake.

    Delta have worked well with global connectivity, and there’s a lot of data and operating experience that they can bring to the table. Marketing under a single brand is key, and it will allow virgin to finally compete with BA – I’d compare this to cityflyer, which most flyers don’t realise is a separate operation, more so than Delta Connect, which is a franchise operation. FlyBe/Stobart have several existing wet lease and franchise agreements that they can also learn from.

    The only irony is that the fly be slots are the ones that virgin gave up / leased out when they abandoned Little Red.

  42. @Anon — “Beijing builds a brand new airport in less time than it takes heathrow to get another runway”

    LMAO! Also totally true about speed of infrastructure projects in USA, especially in California!

  43. Stuart,

    You are right about KLM -Air France, their flights to Fortaleza are a major development. I flew last Summer with KLM to Fortaleza and in both direction the flight was full. It would be great to see Virgin flying from London to Fortaleza as well.

  44. @Aniron – I mean the A380 is an awesome plane, and a narrow body definitely can’t offer the same experience. But I’d rather have direct aisle access, WiFi, air vents, and a closing door, and a terminal with functioning bathrooms.

  45. Typical Virgin publicity. It must be a quiet summer on Neckar.

    Hell will freeze over before this happens even if the slots are available. Virgin have only ever cherry picked the most profitable routes and dropped any they were wrong about like molten metal – e.g. Sydney where even with Virgin Australia at the other end they couldn’t make a go of it against the competition.

  46. Interesting to see SYD back on their sights as they flew that route for years via HKG and gave it up, and closed their office in Mascot around 5 years ago.
    Also, interesting to see PER not on their ‘vision’ map, as I’ve read many articles that they want to I’ve QF competition on the PER-LHR route.

Leave a Reply

Your email address will not be published. Required fields are marked *