Let’s keep the Virgin theme rolling this week, shall we? Last week, Chris Rossi, Virgin Atlantic’s Senior Vice President, North America was in town here in LA for Brit Week. While he was here, we were able to get together for half an hour to talk shop. I was hoping this could become an Across the Aisle piece, but my inability to master recording on my new Android phone prevented me from getting the full transcript. So, I’m afraid you’ll have to settle for highlights.
We covered a lot of topics, so let’s dive right in to them.
Will Virgin Atlantic remain independent?
No use in starting off with fluff questions, right? With all the speculation about the future of Virgin Atlantic as an independent entity, I thought it best to just start there. Of course, there wasn’t much Chris could tell me. He said that it’s really business as usual. I asked if it was a distraction and he said that it was only a distraction in all the external coverage being focused on the airline. Internally, it’s no different.
He did drift into alliances a bit by saying “we’re one of those last few independent [airlines], and we happen to be in a very good position in terms of assets at Heathrow.” But that’s as much as I could get. Not a surprise, of course. We won’t know of a deal until it’s actually happening, if it happens at all.
Former Tail Slogan #1: No Way BA/AA
Virgin Atlantic spent a lot of time fighting the British Airways/American Airlines anti-trust immunity grant (that’s why that slogan was painted on the airplane), but the alliance has gone forward. I wanted to know if Virgin had seen any impact so far. The result? Nothing. “It’s too early stage to know. We haven’t seen any impact, negative or positive.”
His concern is about what will happen if AA and BA use their market power to pressure corporations and travel agencies into signing more restrictive deals. That’s a process that takes time, so Chris says Virgin Atlantic is still waiting to see where it goes. So far, nothing has changed.
Former Tail Slogan #2: 4 engines for long haul
We then spoke about the introduction of A330 service. I could only chuckle at the introduction of this airplane, because Virgin Atlantic used to have “4 engines 4 long haul” painted on its birds. Clearly, economics got the better of them. Chris said the A330 provides a 15 percent cost advantage over the A340, so it’s a very attractive airplane.
There are two in the fleet right now, and the first five will be dedicated to leisure routes with only economy and premium economy seats. Today, they’re flying Orlando to Manchester and London/Gatwick. Airplanes 6 through 10 will have Upper Class and could go on more business-oriented routes, but those are a little way down the line.
I asked if the A330s would open up new routes for the airline, but for now, the answer is no. The plan is to put these on existing routes. They can return some of the A340s if they want, but no plans have been made. If business is good, these can be used for expansion. I imagine with a 15 percent cost advantage, that could open up some routes that don’t make sense with the existing fleet today.
Swapping Spit with Other Virgins
Since Chris runs the show in the US, I was curious if there had been much traffic flowing between Virgin Atlantic and Virgin America. He said there hadn’t been a ton, but he anticipates that will change. Much of the hold-up has been with Virgin America’s systems since they couldn’t communicate properly with other airlines. Now that’s changing and he expects the next step in cooperation to be in the fall.
I wondered why there would be much traffic. After all, Virgin America only adds a few cities (San Diego, Seattle, and Los Cabos) that Virgin Atlantic doesn’t serve itself with legitimate connections. (Nobody is going to connect through LA to go to Dallas.) Chris said the bigger opportunity is in the UK-based passenger who wants to make multiple stops in the US. So they’ll be able to sell a single itinerary to the person who wants to fly into Vegas, up to SF, and then back to the UK.
I still don’t see this as a huge market. It seems to me that if there’s going to be real traffic flow, Virgin America would need to start serving more cities from eastern locations where connections make more sense. But it does seem that they should be sharing more traffic than they are today.
The Ever-Changing Livery
One thing that always bugs me about Virgin Atlantic is that it seems to change its colors every other week. And it’s never a big change. The airline just adds some silver or purple, changes the font, etc. So why the heck does the management team bother?
Chris laughed, and he said that the most recent livery change was really an internally-focused one. They refreshed their brand principles and had a big effort internally to get people re-dedicated to the airline. So the external face of that effort was the change in colors. I still don’t get it. I’m all for touchy-feely things, but this just seems like a huge exercise without a ton of benefit. If there are Virgin Atlantic folks out there, chime in and let me know what you think.
Hrm, why does the changing livery bother you? Other large companies with lots of locations (restaurants, coffee shops, etc) do the same thing. Starbucks’s logo has been rehashed and squished around too many times to count, but its still their logo? Why does Virgin Atlantic need to be any different?
I find livery changes to be hugely wasteful. It takes a lot of time, costs a lot of money, and is simply a distraction. Sometimes, it makes sense, but constant small tweaks of things like fonts makes little to no sense to me.
Sometimes livery changes feel like re-arranging the deck chairs on the Titanic.
You would have thought all the Virgins would have been set up in the beginning to work with each other, even if only planning for down the road joint ventures.
I think the new livery is definitely an improvement. The previous one was too fussy. Your first question is the most interesting, I do wonder how long they can remain independent. The current ownership structure is just weird, especially as it remains outside of Star Alliance. There seems to be no obvious operational benefits. If my memory serves me correct it was just a financial transaction that got Virgin out of a hole. Although I am a BA fan, I do hope they remain a strong competitor to BA. Perhaps one day when all these archaic ownership rules are dead, it can join up with the other Virgin entities.
“It’s too early stage to know. We haven’t seen any impact, negative or positive.” “That’s a process that takes time, so Chris says Virgin Atlantic is still waiting to see where it goes. So far, nothing has changed.”
I wonder is this is truly a concern, travel agents still deal with independent airlines all the time Gulf Air, Ethihad, Emirates and with the half ownership by Singapore must carry some weight. I wonder really how many agents and corporations would really pass more restrictive agreements, however I do where they are coming from.
I think the difference is that those middle eastern airlines usually can provide something far greater than the large alliances in some areas. They can provide greater schedule and connectivity to a lot of places that are hard to reach otherwise, so travel agents/corporates aren’t going to be able to walk away from that. Virgin Atlantic, however, doesn’t provide any of that. BA and AA easily match or outdo Virgin Atlantic on every route in terms of schedule and connections. So, it’s harder to justify straying from BA/AA if so much other business is dependent upon those airlines.
That, at least, is the argument. Whether it’s believable or not is a whole different question.