Four years ago, I sat down with Virgin Atlantic SVP of North America, Chris Rossi during Brit Week, to talk about changes at the airline. Chris was back again for Brit Week earlier this year and I had the chance to sit with him again. My, how things have changed.
Last time, we talked about how Virgin Atlantic remained one of the last of the independents. Well, that’s no longer true now that Delta has bought a huge stake in the airline. When Delta stepped in, things changed very quickly and the two airlines became tightly connected with frequent flier tie-ups, codeshares, and a joint venture. We’ve seen Virgin Atlantic put its airplanes on Delta routes and vice versa, and I wanted to know how those decisions were being made. According to Chris,
It’s both product and capacity and where we can be most competitive. Look at Detroit [to London]. The Virgin A330 vs the Delta 767 offers a bit more capacity. And in Atlanta to Manchester, it’s the same thing. Also, the brand preference is for Virgin in the UK, so for UK point of sale like a Manchester-Atlanta flight, the Virgin product works well there.
Beyond the brand preference, there’s also Virgin’s premium economy which is very different from Delta’s Comfort+ extra legroom offering. According to Chris, that is important but they struggle with it because of technological limitations. Certainly that’s been an issue for people wanting to book Virgin Atlantic premium economy on a Delta-coded flight since Delta can only offer partial inventory.
I wanted to know if this deal with Delta was it or whether more partnering was coming. In particular, would Virgin Atlantic join SkyTeam?
We’re looking at it, so we haven’t ruled it out, but we’re so focused on the [joint venture with Delta].
Well, that doesn’t tell us much. Though to be fair, it really did seem like an afterthought when we discussed it. The focus is really about cozying up further with Delta over the North Atlantic. I was curious about the importance of other flights in the network, the ones that go east and south from London. We saw many of them dropped in favor of redeploying capacity over the Atlantic instead, but I figured connectivity to places further out would still be important. Did it matter?
Yeah it does. With the way our network is set up from London to the East, the key destinations from the US are Delhi and Johannesburg and Lagos to a degree. We do carry quite a bit of traffic, even Atlanta to India is a very big market, which I hadn’t realized.
Despite all these network changes, it seems that the biggest change has involved aircraft. This is a company that flew the 747 (currently with 367 seats on business routes) as its flagship. And it has plenty of A340-600s (with 316 seats) as well. These are all big airplanes, but in the next few years, they’ll be gone. As Chris noted, “the majority of the fleet will be 787s and A330s by 2018.” Those aircraft only hold 264-266 people, a huge reduction.
The same thing will happen over at Gatwick on Virgin’s leisure routes. Those 747s are much more dense, seating 455 people (smaller business class), but those will start to go away in the next 5 years. And it’s pretty much a given that the replacement will be smaller. After all, Virgin Atlantic has said clearly that it is unlikely to take delivery of the 6 A380s it has on order.
With these smaller airplanes, what will service patterns look like? We talked at great length about LAX as a prime example. This is a market that Virgin has somewhat regularly served with 2 daily flights. But that changes this year. With smaller aircraft, Virgin can fly three times in the summer (including the one flown by Delta) using smaller aircraft and only two times in the winter with its usual service pattern, better matching capacity to demand.
The service pattern is just a small part of what’s happening in LA though. There’s been a big investment in the passenger experience with the renovation of Terminal 2 and the addition of a Virgin Clubhouse lounge. Now that Air France/KLM and Air New Zealand have left for the renovated Bradley Terminal, there was room for Virgin Atlantic to do some good things in Terminal 2.
It took over the former Air NZ check in positions at the east end of the terminal. Now, premium passengers will check in on the side in a more exclusive area, sail through security, and then walk into the lounge (in the space where the former Air France/Northwest lounge was.) Once this work is all done, Terminal 2 will feel like a private terminal compared to the big Bradley Terminal most other international carriers are using.
Considering we had just talked about how quickly Delta and Virgin Atlantic had tightened the relationship, it still seemed strange to me that we were talking about Virgin Atlantic remaining in Terminal 2 on the opposite side of the airport from Delta. But Chris said that was something they discussed.
We looked at that and there simply wasn’t the real estate with the customer proposition we wanted to deliver. Once we knew that, it was, “ok, let’s do the best job we can in Terminal 2.”
And even though there is “quite a bit” of connecting traffic from London on to Hawai’i on Delta and a little bit up and down the coast, they don’t make connections easy. There are no behind security connections using buses or anything like that.
Overall, it’s hard to argue with what Virgin Atlantic and Delta are doing together. This is an airline that has lost money for several years, but all of a sudden, the connectivity with Delta has turned it into a profitable entity. That’s good news.
[Original 787 photo via Angel DiBilio / Shutterstock.com]
16 comments on “Reflecting on Virgin Atlantic’s Changes with Its North American Boss”
On the face of it, looks like Virgin Atlantic’s intentions at LAX are noteworthy. I have yet to fly out of Terminal 2, but with the relatively low number of daily flights do you think they might share some space with Delta for other international flights?
For example, 2 weeks ago I was in terminal 5 for a domestic Delta flight on a 737 loading next to a 777 going to Narita. The boarding area was a zoo. Maybe better managed out of Term 2, if some form of pre or post security-check in and transport to gate was in place.
On another note, would be interesting if there was a connection with Skyteam/KLM/Air France. I wouldn’t have a problem flying to Gatwick or Manchester on Virgin and connecting to let’s say Düsseldorf on KLM or AF metal.
I don’t think your example would be interesting for anyone. From Gatwick/Manchester to Düsseldorf with AF/KL would mean another transfer in Paris or Amsterdam. Only when flying to one of these cities, AF/KL could be interesting.
Aside: KLM doesn’t fly to Gatwick, but that’s just a detail :)
JMR- True, I didn’t do a lot of homework on this post, but recently I did read an interesting opinion piece saying that Manchester and Amsterdam was a better hub for UK/Europe than Heathrow could ever be with another runway added that on. My parents going from Berlin back home said LHR was their worst part of the trip.
SYVJEFF – There’s room for Delta to fly from T2 for sure, but Delta isn’t going to want to do that because the connecting experience is pretty terrible. The facility works for a couple of Virgin flights but not much more. (Though I still think that it would work well with Virgin Australia since flight times are at different times than Virgin Atlantic’s.)
The VS/DL was a big win for VS who gets all that DL U.S. feed to VS flights. The only thing DL gets out of it is VS slots at LHR to codeshare and try and match what AA/BA can offer. VS beyond London is nothing since DL can already compete with it’s KL/AF partners.
Don’t underestimate what VS does for DL. DL, with VS added in, gets a schedule and product on JFK-LHR that competes very nicely with AA-BA and sells well to big corporate clients in NYC and LON, plus some good international feed into ATL on VS flights from Manchester and the like. SkyTeam presence in LHR was negligible before the deal; DL needed a foothold. Once the VS network was reconfigured and their fleet modernized and redeployed, VS fit into the DL fleet and network nicely. Plus Sir Richard is always great to have around :)
Don’t forget, as 49 percent shareholder in VS, Delta gets plenty of profits back on shared PAX.
Love your caricatures! (truly a hidden talent)
I’m just glad Delta’s caption wasn’t Virgin’s and vice-versa!
I found it very odd when DL/VS removed VS metal and sent it to ATL/DTW where VS and the broader Virgin brand doesn’t have much if any recognition or following. I get that it’s a metal neural JV but it’s still odd. So they will have 1x 787-9 and 1x 346 for the foreseeable future at LAX?
The comments about UK point of sale is interesting I just wonder how much UK originating traffic comes out of MAN for ATL.
Anyway smaller gauge seems to be consistent with DLs strategy and those being employed by other carriers. Smaller gauge should help improve yields.
ATL and DTW can offer connectivity with many cities that would never have non-stop VS service.
Josh G – Actually, in the summer it’s 1 787-9 and 1 A340-600 in addition to the Delta 767. But in the winter, Virgin Atlantic goes back to 2 A340-600s.
To be fair though, the 49% ownership or whatever it is that DL bought, previously belonged to SQ. So VS was never truly THAT independent, it’s just that SQ didn’t take much a commanding interest in VS the way that DL has. It all goes to prove how well-oiled the DL machine is…
Although I am happy for the two companies things are working out financially (= what they care about) for my family this tie-up has had some really crap consequences. My teenage son goes to school in the north of England and to visit him or for him to fly to us (Charlotte, NC) Delta/Skyteam and AA/One World are both contenders.
As my son is only 14 he flies as an unaccompanied minor. To visit with us one obvious connection would be MAN – ATL and then connect on the short hop to CLT. But the MAN – ATL flight is now a Virgin flight, whereas the connecting flight is a DL domestic and guess what? Virgin and DL do not accept unaccompanied minors from each other. Which means when I wanted to book my son for this upcoming summer holiday, DL proposed to fly him MAN – JFK – MSP – CLT. A flight that should take no more than 14 became a 21 hour itinerary with many opportunities to miss connections due to weather or any other disruption.
The DL agents were very understanding but could not do anything about it, “sorry”. Great!
In the end we found a connection MAN – JFK – RDU which means only one stop but a 2.5 hour drive to and from the airport.
Why not fly AA, you ask? Because (a) I do not have my miles with them (I have only recently moved to the Charlotte area) and (b) they have the same stupid rule for unaccompanied minors with BA and his connection options from where he goes to school in the UK are either MAN or LBA which means very often a domestic BA flight first.
Luxury problems, I know… but annoying none the less. I do hope that the 49% ownership of DL in Virgin will lead to a full integration of all passenger services including UM’s. And equally, that “One World” would live up to its lofty name and actually provide one world of services. I for one would be very grateful for that.
Nice to see they are not moving to T5, many skyteam carriers guests in the past have not had the best experience, AF being the best example. DL staff are good but compared to most premium international carriers not great.
Great that Virgin can provide more flights from LAX to London, but what about Heathrow slots? Wasn’t that the reason BA switched from three 747s to two 380s on that route? Or does Virgin have too many slots to begin with?
(Incidentally, this week I flew LHR–LAX on BA’s A380 and really enjoyed the ride.)
Ron – They have a lot of slots and they can move them around to fit their needs. I assume we’ll see more seasonality changes on some of these routes now that Delta is involved.