Craig Kreeger, who took the top job on February 1, said the new service, flying from Manchester, Aberdeen and Edinburgh into London Heathrow, will be a key part of the wider Virgin Atlantic business.
“It really is about getting passengers down to Heathrow and connecting on to our long haul networks. If we didn’t think they’d made sense, there’s no reason for us to be flying them,” he said.
Virgin last year acquired 12 pairs of take-off and landing slots at Heathrow that British Airways was forced to give up after buying BMI.
Asked why he thought Little Red would succeed where BMI had not, he said: “We’ve done this in a way that will work. BMI obviously struggled but they didn’t have the long-haul network to connect to.
“So it’s a completely different proposition from a business case standpoint to create a short haul network that feeds a long haul network the size of ours which gives the capability for it to be successful.
He denied industry suggestions that Virgin only bid for the slots to block rivals from acquiring them, noting that the Scottish slots in particular can only be used for those specific routes.
He was speaking ahead of an ‘inaugural’ launch flight today on which he and Virgin founder Sir Richard Branson will fly from Heathrow to Edinburgh.
Once in the Scottish capital, the pair are expected to be joined by Nicola Sturgeon, Scotland’s deputy first minister, to discuss the economic benefits of the new services.
The actual first flights began between Manchester and London on Easter Sunday, with Edinburgh joining the network on Friday, and the Aberdeen route opening tomorrow. (April 9)
The Little Red planes are A320s which have been ‘wet leased’ from Aer Lingus, the Irish flag carrier. “That means Aer Lingus is actually flying the plane on our behalf. So they’re employing the cockpit and the cabin crew and operating the flight with our livery and our product,” he said.
Mr Kreeger went on to say that such a lease is cheaper to run given Virgin has no experience of operating narrow-bodied planes. All the staff are however trained by Virgin, with the new chief executive describing it as “a single class, short haul flight, with a Virgin style.”
“It’s a way of offering the virgin product to a different set of customers who have not had access to that before,” he said.
He also dismissed any suggestion that Virgin Atlantic was placing itself in competition with Virgin Trains, which runs services between London, Manchester and Edinburgh, and is part-owned by Sir Richard.
“We’re not viewing that as a primary competitor on this route. We obviously think this is about offering our entire network to the people of say, Manchester, and Manchester to the rest of our network.
“Yes we will carry some people between Manchester and Heathrow, airport to airport, if that’s convenient for them. But the bigger opportunity for us is Manchester to the rest of the world, and therefore BA is our primary competitor.”
http://www.telegraph.co.uk/finance/newsbysector/transport/9977384/Virgin-CEO-little-Reds-long-haul-links-should-help-it-fly.html
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3 Apr 2013 (Teleglraph)
Julie Southern, Virgin’s chief commercial officer, said: “We are very interested in exploring what further cooperation opportunities there are, particularly with Air France-KLM and Alitalia.”
However, she added that “no detailed discussions” have taken place yet, with talks due to take place in the “coming months”.
The airline is already planning a joint venture with Delta Air Lines this year in an attempt to challenge British Airways’ dominance of the London to New York market.
It is thought that a similar deal could be made between Virgin and Air France-KLM to open up more flights to Asia, the Middle East and Africa. Italian airline Alitalia could also be involved in the tie-up.
Virgin is considering altering its business model and may be willing to sacrifice its independence as it looks to return to profitability.
Jean-Cyril Spinetta, Air France-KLM’s chief executive, said the Franco-Dutch group may consider a joint venture with Virgin on Asian and African routes.
Delta, which is planning to take a 49pc stake in Virgin Atlantic, already has a partnership with Air France-KLM and Alitalia on transatlantic routes. The enlarged group are thought to be considering asking regulators if they can all work together on the pricing and marketing of flights between Europe and the US.
Last year, rumours of the tie-up with Delta prompted BA chief executive Willie Walsh to predict such a deal would lead to the Virgin brand disappearing within five years.
http://www.telegraph.co.uk/finance/newsbysector/transport/9968125/Virgin-planning-talks-with-Air-France-KLM-and-Alitalia-over-joint-venture.html
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Delta buys 49% stake in Virgin Atlantic
Delta Air Lines has confirmed it is to take a 49pc stake in Sir Richard Branson’s Virgin Atlantic.
The deal represents a significant challenge to British Airways’ dominance of the London to New York market.
11 Dec 2012
The $360m (£224m) deal will see Delta buy out Singapore Airlines’ stake, switching Virgin’s focus back to its core transatlantic market.
“Our new partnership with Virgin Atlantic will strengthen both airlines and provide a more effective competitor between North America and the U.K., particularly on the New York-London route, which is the largest airline route between the U.S. and Europe,” Delta chief executive Richard Anderson said in a statement.
The deal represents a significant challenge to British Airways’ dominance of the London to New York market.
The deal will be subject to US competition law, as well as similar EU regulation. Today both companies said they were confident of the deal being approved.
Steve Ridgway, Virgin Atlantic chief executive, said: “Consumers will reap the rewards of this partnership between two great airline brands on services from the UK to the USA, Canada and Mexico through a shared ethos in the highest standards of customer service. This joint venture will deliver much more effective competition at Heathrow.”
The two airlines will operate 31 peak day transatlantic flights, with nine roundtrip flights on the key London to New York route every day.
As well as sharing costs and revenues from all joint venture flights the deal will see Virgin and Delta share airport lounges and frequent flier points.
In a statement the airlines said they expected to get regulatory approval within 12 months.
http://www.telegraph.co.uk/finance/newsbysector/transport/9737334/Delta-buys-49pc-stake-in-Virgin-Atlantic.html
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