Virgin Atlantic’s Little Red domestic airline has been flying planes which are on average more than 60pc empty, figures reveal.
The domestic carrier, which was launched in March last year to feed passengers from the north of England and Scotland into Virgin Atlantic’s long-haul network from Heathrow, has been the subject of intense speculation over poor ticket sales.
Data collated by the UK regulator, the Civil Aviation Authority, confirms for the first time that the domestic service has faced an uphill struggle in its launch year.
The CAA’s figures show Little Red’s load factor – indicating how many seats flown were actually occupied – was just 37.6pc in 2013, the lowest in the industry.
Little Red’s performance puts it well behind rivals British Airways and easyJet, which recorded load factors of 72.4pc and 77.8pc respectively for 2013, according to the data.
In an interview with The Telegraph last month, Virgin Atlantic’s chief executive, Craig Kreeger, who is seeking to return the airline to profitability by the end of this year, refused to reveal Little Red’s load factor, saying rumours of the service’s demise had been “greatly exaggerated”. He said at the time: “The real answer is it’s been building steadily and I’m now extremely comfortable with it.”
Responding to the CAA figures this weekend, Virgin insisted Little Red’s load factor so far this year has been “considerably higher than the 2013 average”.
The carrier, which is now 49pc owned by Delta Airlines of the US, said: “We are very pleased with the progress we are seeing after Little Red’s first year of operation.
Little Red offers customers a compelling alternative for domestic flights and more choice for connections to the rest of our long-haul network… Little Red ensures there will continue to be healthy competition on routes to and from Heathrow.
“We expected it to take some time for our customers to be fully aware of the service and we planned for comparatively low initial load factors.
“Now Little Red is gaining momentum. Since the start of 2014, it has been gaining market share, beating revenue and load factor budgets and generating great customer feedback. Our load factor so far in 2014 is already considerably higher than the 2013 average. We expect this to continue as we move into the summer travel season.”
Little Red was launched after rival British Airways swooped on the UK domestic carrier, bmi, in a £172.5m deal in 2012, which was contested by Sir Richard Branson. Bmi, which was previously owned by Germany’s Lufthansa, had been a major source of feeder traffic for Virgin Atlantic.
Virgin Atlantic’s financial results for 2013 show Mr Kreeger, a former American Airlines executive who took the helm of the UK carrier in February 2013, succeeded in reducing its losses to £51m from £102m.
One comment under the photo and article:
What a tacky and tasteless advertisement.
You’re not fooling anyone, beardy.
What is it with all the sexual innuendo from this guy? Dressing up as a stewardess in another advert, I recall. Is it just sensationalist trash for the proles?
Probably too expensive, Virgin is not known for it’s low costs despite it’s altruistic marketing message to the contrary – What was it about “you can fool the public some of the time but ……..”
CAA data airline by airline showing their number of passengers and load factors for 2013
Losses halve at Virgin Atlantic
Craig Kreeger’s turn-around programme begins to take shape as lossses fall to £51m in year to December 2013
24 Apr 2014
Losses at Virgin Atlantic halved in the year to December 2013 as new chief executive Craig Kreeger’s turn-around programme began to take shape.
The Virgin Group-controlled airline, which celebrates its 30th anniversary this year, made a pre-tax loss of £51m in the 12 months to December.
Direct comparison for the prior year is made difficult due to a change in year-end – from February to December, bringing it in line with Virgin Group – but in the same period a year ago the loss was £102m on a pro-forma basis.
The last reported annual loss – for the 12 months to February 2013 – was £128.4m before exceptionals.
The airline emphasised that on a 10 month basis, from March to December 2013, the airline was profitable – before tax and exceptional items – to the tune of £7m.
Mr Kreeger said the airline made “good progress” last year and was on track to reach profitbality by the end of this year.
He arrived at the airline in February 2013, taking over from long-standing chief Steve Ridgway, since which time he has focused on cutting below-the-wing costs, launching Virgin’s UK domestic service Little Red, and bringing the airline closer to Delta Airlines.
Delta bought a 49pc stake in Virgin Atlantic for $360m (£214m) from Singapore Airlines in December 2012.
The tie-up received regulatory approval last September, since which time the two airlines have begun to co-operate, the most visible example of which has to date has been Delta’s move to Terminal 3 – from Terminal 4 – at London’s Heathrow airport.
The joint venture is designed to bolster the profitability of both airlines by working together on trans-Atlantic and other routes.
“Going forward, the impact from our Delta relationship, which greatly enhances our revenue opportunities in the US…means we are confident that we will deliver on our target and return to profitability,” Mr Kreeger continued.
The annual results also show that group turnover rose by 4.9pc in the year to December, including an increase in passenger revenue of £153m.
Some 6.2m passengers were flown by the airline in the year, including on its loss-making Little Red service which flies passengers between Manchester, Edinburgh, Aberdeen and Heathrow.
The airline’s results include the figures for Virgin Atlantic Cargo, where sales fell 3.4pc as a result of a weak cargo market, and Virgin Holidays, which generated undisclosed profits on the back of an 8.1pc increase in revenue.