Virgin Atlantic Cuts Network with a Revised US Focus

UK carrier Virgin Atlantic Airways is to suspend flights to Cape Town, Mumbai, Tokyo and Vancouver as it instead looks to strengthen its transatlantic partnership with shareholder Delta Air Lines. The latest network changes are part of an ongoing network review and business recovery plan to return the carrier to long-term profitability.

UK carrier Virgin Atlantic Airways is to suspend flights to Cape Town, Mumbai, Tokyo and Vancouver as it instead looks to strengthen its transatlantic partnership with shareholder Delta Air Lines. The latest network changes are part of an ongoing network review and business recovery plan to return the carrier to long-term profitability.

The airline has already made notable changes to its operations as part of its new alliance with Delta including a route switch that has seen the carriers make network amendments to provide more choice and variety to customers flying between Europe and North America. It also took the tough decision to close its Sydney operation, a destination that had been a key part of the Virgin Atlantic story.

With the airline expecting to return to profitability by the end of this year, its attention is now shifting focus onto positioning the business for enduring success. It has been loss-making for the past two years but halved pre-tax losses in 2013 to £51 million from £102 million the year earlier.

“Our ambition is to be profitable for the long term, earn competitive returns, and invest those into providing the very best experience for our customers on the routes they most want to fly,” said Craig Kreeger, chief executive officer, Virgin Atlantic Airways.

The network review will see the closure of flights between London Heathrow and both Mumbai and Tokyo Narita from February 1, 2015, while seasonal flights will end from the London airport to Vancouver at the end of the current summer schedule on October 11, 2014 and to Cape Town at the end of its winter 2014/2015 offering on April 27, 2015. Virgin Atlantic will continue to have a presence in the South African market through its Johannesburg service and in India through its Delhi flights. It also will continue to fly to other destinations in Asia, Africa, Caribbean and the Middle East.

Virgin Atlantic faces direct completion on all four routes that it is suspending. Its biggest rival British Airways serves all four markets, while All Nippon Airways and Japan Airlines serve Tokyo Narita; Air India and Jet Airways serve Mumbai and Air Canada serves Vancouver.

Its network strategy is now taking it back to its roots with a focus on the US market as it struggles to compete with rivals, including the major Gulf hub carriers, on flights into Africa and Asia. The intended changes will enable Virgin Atlantic to reach record profitability levels by 2018, it says, and will see it better utilise its fleet by flying routes which deliver “maximum profit or strategic importance".

“Transatlantic flying has always been at the heart of our network and our most financially successful region,” said Kreeger. “This announcement allows us to play to our strengths and focus our network on routes between the UK and US, as well as other critical global destinations that are most important to our customers.”

The first stage of the transatlantic restructuring from the forthcoming winter 2014/2015 season will see Delta start operating one of Virgin Atlantic’s two daily flights between London Heathrow and Los Angeles and Virgin Atlantic begin operating one of Delta's three daily flights between London Heathrow and Atlanta.

The latest changes will see Virgin Atlantic offer an additional five daily transatlantic flights and more than 500 additional flights in the summer 2015 schedule between the UK and US in comparison to this year.

From its base at London Heathrow, the proposed changes include a new daily service to Detroit; additional frequencies to New York JFK and Los Angeles; a daily summer seasonal service to Atlanta and five times weekly link to San Francisco; and an additional daily winter service to Miami.

The announcement of the proposed new link to Detroit Metropolitan Airport continues what has been a strong year for new services at the US airport and came just a day before Alaska Airlines inaugurated flights to Detroit from Seattle, Washington.  Virgin Atlantic will also become Detroit’s fifth foreign flag carrier joining Air Canada (through its regional partners), Air France, Lufthansa and Royal Jordanian.  The Detroit - London Heathrow market is currently served by Delta but is is unclear if Virgin Atlantic will operate alongside of, or replace its US partner's operation.

“We have routinely met with the UK airlines since British Airways left Detroit in 2008 in order to persuade them that now is the right time to return to Detroit,” said Joe Cambron, director of air service development, Detroit Metropolitan Airport. “I think Detroit’s resurgence coupled with the impending move of the FIAT World Headquarters to London and Virgin’s new alliance with Delta allowed the stars to align for our community.”

The network switches also continue with Virgin Atlantic taking over Delta’s daily Manchester – Atlanta route, while the US carrier will operate one of Virgin Atlantic’s existing London Heathrow – Newark flights. The partners’ transatlantic offering will be further boosted by the resumption of a daily service from Delta between Manchester and New York JFK which will commence from June 2, 2015.

“We are confident that with this strengthened network, our new aircraft and our welcoming people delivering unrivalled service, we have all the right ingredients to achieve long-term success,” said Kreeger.