Virgin Atlantic, a trading name of Virgin Atlantic Airways Limited, is a British airline with its head office in Crawley, West Sussex, England. The airline was established in 1984 as British Atlantic Airways, and was originally planned by its co-founders Randolph Fields and Alan Hellary to fly between London and the Falkland Islands. Soon after changing the name to Virgin Atlantic Airways, Fields sold his shares in the company after disagreements with Richard Branson over the management of the company. The maiden flight from Gatwick to Newark Liberty International Airport took place on 22 June 1984. The airline along with Virgin Holidays is controlled by a holding company Virgin Atlantic Limited which is owned 51% by the Virgin Group and 49% by Delta Air Lines. It is administratively separate from other Virgin-branded airlines.
Virgin Atlantic uses a mixed fleet of Airbus and Boeing wide-body jets and operates between the United Kingdom, North America, the Caribbean, Africa, the Middle East and Asia from its main bases at London Heathrow and Gatwick. The airline also operates a secondary base at Manchester, as well as a seasonal base from Glasgow. The airline has operated domestic flights within the United Kingdom since 31 March 2013.
In 2012, Virgin Atlantic carried 5.4 million passengers,[5] making it the seventh-largest UK airline in terms of passenger volume. In the year to 31 December 2013, it reported a £51 millions group pre-tax loss (approximately US$87 million).[6] Virgin Atlantic holds a Civil Aviation Authority (CAA) Type A Operating Licence, which permits it to carry passengers, cargo, and mail on aircraft with 20 or more seats.[7]
Alan Hellary, Richard Branson, and Randolph Fields launch Virgin Atlantic at the 1984 press conference
Randolph Fields, an American-born lawyer, and Alan Hellary, a former chief pilot for Laker Airways, set up British Atlantic Airways as a successor to Laker Airways.[8] Fields had the idea for an airline that operates between London and the Falkland Islands in June 1982, when the Falklands War had just finished.[9] Fields needed expertise, and contacted Alan Hellary, who had also been thinking about establishing a regular commercial service to the Falklands. Hellary was in contact with colleagues out of work following the collapse of Laker Airways, and they developed the idea.
However, the short runway at Port Stanley Airport and the time it would take to improve it made the scheme unviable, so the idea of the Falklands service was dropped. Instead, Hellary and Fields tried to secure a licence from Gatwick Airport to John F. Kennedy International Airport in New York City. A three-day inquiry in May 1983 rejected the application after British Airways, British Caledonian, and BAA objected.
Hellary and Fields then applied for a licence between Gatwick and Newark, using a 380-seat McDonnell Douglas DC-10.[8] However, faced with the prospect of direct competition from People Express, a post-deregulation "no frills" discount airline at Newark, they decided to secure more funding before proceeding.
Fields met Richard Branson at a party in London during which he proposed a business partnership. After protracted and testy negotiations, Fields agreed to a reduced stake of 25% in the airline (renamed Virgin Atlantic) and became its first chairman. Following disagreements over operations, Fields agreed to be bought out for an initial sum of £1 million with further payment on Virgin's first dividend. As a result of a High Court action, this additional payment was received shortly before Fields' death in 1997.
Formative years[edit]
Maiden Voyager operated the first scheduled Virgin Atlantic service on 22 June 1984
On 22 June 1984, Virgin Atlantic operated its inaugural scheduled service between Gatwick and Newark using a leased Boeing 747-200 (registration G-VIRG), christened Maiden Voyager,[8] formerly operated by Aerolíneas Argentinas. Part of Richard Branson's approach to business is to succeed within the first year or exit the market. This includes a one-year limit on everything associated with starting up.[10] Virgin Atlantic became profitable within the first 12 months, aided by sister company Virgin Records' ability to finance the lease of a secondhand Boeing 747. The firm timed operations to take advantage of a full summer, from June to September – the most profitable period of the year.
In November 1984 the airline started a service between Gatwick Airport and Maastricht Aachen Airport in the Netherlands using a chartered BAC One-Eleven/[11]
In 1986, the airline added another Boeing 747 and started a scheduled route from Gatwick to Miami. Additional aircraft were acquired and routes launched from Gatwick to New York JFK (1988), Tokyo (1989), Los Angeles (1990), Boston (1991), and Orlando (1992). In 1987, a service was launched between Luton and Dublin using Viscount turboprop aircraft, but this was withdrawn around 1990. In 1988, Club Air operated two Boeing 727 jet aircraft on behalf of Virgin. These served the Luton to Dublin route until about 1990.
Competition[edit]
Before its inception, British Airways had been the only airline from the United Kingdom serving long-haul routes to destinations in North America, the Caribbean, and the Far East since the BA-BCal merger in the late 1980s. In 1991, Virgin was given permission to operate from Heathrow following the abolition of the London Air Traffic Distribution Rules (TDRs) which had governed the distribution of traffic between Heathrow and Gatwick airports since 1978, primarily to bolster the profitability of Gatwick. Airlines without an international scheduled service from Heathrow prior to 1 April 1977 were obliged to operate from Gatwick. However, airlines that did not already operate at Heathrow were still able to begin domestic scheduled services there provided BAA, which ran both Heathrow and Gatwick on behalf of the UK Government, and the Secretary of State for Transport granted permission.
Two Airbus A340-600 at London Heathrow Airport in 2010
According to industry insiders, Virgin Atlantic had increasing financial problems during this period. The British government wished to avoid the collapse of a significant independent airline, with Dan-Air on the brink of bankruptcy, and therefore decided to let Virgin Atlantic into Heathrow, despite opposition from British Airways. The Civil Aviation Authority also transferred two pairs of unused landing slots that British Airways held at Tokyo's Narita Airport to Virgin to let it increase its frequency between Heathrow and Tokyo from four to six weekly round trips, making it easier for Virgin to compete against British Airways. King called the CAA's decision, which the Government had endorsed, "a confiscation of his company's property".[12]
Even so, Richard Branson was forced to sell Virgin Records in 1992 to EMI to raise capital to shore up Virgin Atlantic's position. In the year to October 1993, Virgin Atlantic declared a loss of £9.3m. The decision to abolish the London TDRs and to let Virgin Atlantic operate at Heathrow in competition with British Airways became the trigger for BA's so-called "dirty tricks" campaign against Virgin. In 1993, BA's public relations director, David Burnside, published an article in BA News, British Airways' internal magazine, which argued that Branson's protests against British Airways were a publicity stunt. Branson sued British Airways for libel, using the services of George Carman QC. BA settled out of court when its lawyers discovered the lengths to which the company had gone in trying to kill off Virgin. British Airways had to pay a legal bill of up to £3 million, damages to Branson of £500,000 and a further £110,000 to his airline. Branson reportedly donated the proceeds from the case to Virgin Atlantic staff.[13]
In the 1990s, Virgin Atlantic jets were painted with "No-Way BA/AA" in opposition to the attempted merger between British Airways and American Airlines.[14] In 1997, following British Airways' announcement that it was to remove the Union Flag from its tailfins in favour of world images, Virgin introduced a Union Flag design on the winglets of its aircraft and changed the red dress on the Scarlet Lady on the nose of aircraft to the union flag with the tag line "Britain's Flag Carrier". This was a tongue-in-cheek challenge to BA's traditional role as the UK's flag carrier.[15]
In June 2006, US and UK competition authorities investigated alleged price fixing between Virgin Atlantic and British Airways over passenger fuel surcharges.[16] In August 2007, BA was fined £271 million by the UK Office of Fair Trading (OFT) and the US Department of Justice.[17] However, the Chief Executive of Virgin Atlantic, Steve Ridgway, was forced to admit that the company had been a party to the agreement, had been aware of the price fixing and had taken no steps whatsoever to stop the price fixing.[18] The company escaped a similar fine to that levied on British Airways only by virtue of the immunity it had earlier negotiated with the regulators.
Recent years[edit]
Airbus A340-300 at London Heathrow Airport in 2003, displaying "4 Engines 4 Longhaul" slogan
In 2003, Virgin Atlantic carried 3.8 million passengers.[19] This increased to 4.6 million in 2006, placing it seventh among UK airlines.[20] During the 2012 Summer Olympics bids, Virgin Atlantic attached London 2012 decals to the rear of many of its Boeing 747-400s.
On 31 October 2005, Virgin Atlantic operated a humanitarian aid charter flight to Islamabad, Pakistan, with 55 tonnes of aid for the people affected by the 2005 Kashmir earthquake.[21]
Boeing 747-400 after take-off
On 27 September 2006, Branson announced plans to reduce greenhouse gas emissions by cutting aircraft weight and fuel consumption. There was also an experiment in 2007 in partnership with Boeing to have aircraft towed to the runway to save fuel, as a potential change to future operational procedures.[22] Virgin also volunteered a Boeing 747 for a test of biofuels in February 2008. The aircraft flew without passengers from Heathrow to Amsterdam Airport Schiphol, with 20% of the power for one engine provided by plant-based biofuel. Virgin said that it expected to use algae-based biofuels in the future.[23]
In April 2010, a tip-off from Cathay Pacific led to the OFT investigating alleged price fixing between Virgin Atlantic and Cathay Pacific on flights to Hong Kong between 2002 and 2006. Cathay Pacific received immunity from prosecution for reporting the alleged offence. A maximum fine, if found guilty, was 10% of turnover which based on the £2.5 billion in sales for the year to February 2009 would have been £250 million.[24] At the time, the OFT stressed that it should not be assumed that the parties involved had broken the law.[25] The OFT cleared both airlines in December 2012, concluding there were "no grounds for action".[26]
In 2012, Delta Airlines acquired the 49% stake in the holding company Virgin Atlantic Limited formerly held by Singapore Airlines. In December 2012, International Airlines Group CEO, Willie Walsh, suggested that the loss-making company would be history within five years. "I can't see Delta wanting to operate the Virgin brand because if they do what does that say about the Delta brand? I just don't see that the guy (Branson) has anything that stands out in terms of what he has achieved in the industry."[27]
In May 2014, Virgin Atlantic ended flights to Sydney. In September 2014, Virgin Atlantic announced plans to scrap flights to Tokyo, Mumbai, Vancouver and Cape Town and to code-share transatlantic flights with Delta Air Lines. The company was also reported to be considering axing its new 'Little Red' domestic airline after suffering heavy losses.[28] On 6 October 2014, Virgin Atlantic confirmed that Little Red services between London and Manchester would end in March 2015, with the Scottish routes closing in September 2015.[29]
Corporate affairs[edit]
Offices[edit]
The Office, the head office building of Virgin Atlantic and Virgin Holidays in Crawley, West Sussex
Virgin Atlantic's head office, known as The Office, is located on a business park in Crawley, West Sussex, England, near Gatwick Airport[30] and also houses the corporate offices of Virgin Holidays.[31] The company operates several offices and call centres around the world, with a large office in Swansea, Wales, dealing with reservations and sales, baggage claims and tracing and customer feedback. Other offices are located at Norwalk, Connecticut; Johannesburg; Barbados; Lagos; Dubai; Greater Delhi; Hong Kong; Shanghai; and Tokyo.[32]
Ownership[edit]
Virgin Group sold a 49% stake in the airline to Singapore Airlines in 1999 for £600 million.[33] On 14 May 2008, the company formally announced an invitation for offers for its Virgin Atlantic stake, and publicly acknowledged that its stake in the airline had "underperformed".[34]
In November 2010 it was reported that Virgin Atlantic had appointed Deutsche Bank to begin a strategic review of options for the airline following the tie-up between British Airways and American Airlines.[35] By February 2011 it was confirmed that SkyTeam members Air France-KLM and Delta Air Lines had appointed Goldman Sachs to advise them on a joint potential approach for Virgin Atlantic. Etihad Airways was also reported to be considering a deal,[36] and Willie Walsh, chief executive of International Airlines Group, stated that they would be interested in the airline, but only for the lucrative take-off and landing slots it holds at London Heathrow Airport.[37]
On 11 December 2012, Delta Air Lines confirmed the purchase of Singapore Airlines' 49% stake in Virgin Atlantic for £224 million, with future plans to develop a transatlantic joint venture. Regulatory approval from the United States and European Union was granted on 20 June 2013,[38] and the purchase was completed on 24 June.[39]
Business trends[edit]
The key trends for Virgin Atlantic over recent years are shown below (figures are for each year ending end February; they exclude Virgin Nigeria 2005–2008):
Little Red Airbus A320-200 operated by Aer Lingus landing at London Heathrow Airport
BMI provided domestic and European feeder traffic into Heathrow Airport [47] until it was purchased by British Airways' parent company International Airlines Group in 2011. The Lufthansa-owned airline had faced heavy annual losses of more than £100 million. Under the terms of the takeover, IAG had to relinquish some former BMI domestic slots at Heathrow. Virgin Atlantic purchased enough slots in 2012 to enable it to launch a domestic service on 31 March 2013, under the "Little Red" brand, operating a total of 12 daily services from London to Aberdeen (3), Edinburgh (6), and Manchester (3).[48] The airline wet-leased four Airbus A320s from Aer Lingus, operating with Virgin Atlantic livery, under a three year contract.[49][50]
In September 2014, it was reported that Virgin was considering closing its domestic airline after suffering heavy losses,[51] with Civil Aviation Authority figures confirming an average seat occupancy level of just 37.6% in 2013.[28] The 12 daily pairs of take-off and landing slots at Heathrow cannot be sold for long-haul routes.[52] On 6 October 2014, Virgin confirmed that the Little Red service would close, with flights to Manchester ending in March 2015, and to Edinburgh and Aberdeen in September 2015.[53]
Destinations[edit]
Main article: Virgin Atlantic destinations
Codeshare agreements[edit]
Virgin Atlantic has codeshare agreements with the following airlines:[54]
Virgin Atlantic uses a mixed fleet of Airbus and Boeing aircraft. Boeing 747-400s and Airbus A330-300s are used on selected routes from Gatwick, Glasgow, and Manchester, with the A330 being used on other flights as well. Boeing 747s, Airbus A340s and Airbus A330s are used interchangeably on all routes from Heathrow. In August 2002, Virgin became the first airline to operate the Airbus A340-600.[55]
Virgin Atlantic took delivery of its first Boeing 787-9 in October 2014, becoming the first European airline to fly the variant.[56] Virgin's order was first announced on 24 April 2007, and is for a total of 17 aircraft, with options on 5 more. The exercised options will replace the Heathrow-based 747 fleet during 2015 and 2016. Virgin Atlantic also has an order for the Airbus A380-800, with delivery due in 2018. The type was originally projected to enter service in 2006, but a combination of delays in production and Virgin deferring its order has pushed that date back.[57]
The ageing Airbus A340-300 aircraft is due to be phased out of commercial service, as rising fuel costs have made it less economical to run. Virgin has begun to use the two-engine A330-300 on routes operated by the A340-300.[58] The A330s, in three-class layout, were stationed at Heathrow Airport in April 2012.[59]
Virgin Atlantic's fleet consists of the following aircraft as of February 2015:[60]
Livery[edit]
Boeing 747-400 Lady Penelope in Birthday Girl livery in 2011
Virgin's first aircraft were painted with a "Eurowhite" design with a red stripe through the centre of the main deck windows. The engines were metallic silver and the tail red with the Virgin logo in white. In the 1990s, the refreshed design was introduced, removing the centre red stripe through the windows, engines were painted red, the Virgin Atlantic titles in grey were added along the main fuselage, and the 'Flying Lady' was introduced to the nose area. In October 2006, with the delivery of G-VRED, Virgin introduced a new design, with the fuselage painted in metallic silver and a revised tail fin, with red and purple features and the Virgin logo. Near the nose of each aircraft is a pin-up girl, the "Scarlet Lady", carrying a Union flag, which was designed by British artist Ken White, who modelled the motif on the World War II pin-ups of Alberto Vargas – hence the naming one of the fleet Varga Girl.[41]
Each aircraft has a name, usually feminine, such as Ladybird, Island Lady, and Ruby Tuesday, but some are linked to registrations (e.g. G-VFIZ became Bubbles). There are a couple of commemorative names (e.g. G-VEIL—Queen of the Skies—which was named by Queen Elizabeth II on 7 April 2004, in celebration of the centenary of the Entente Cordiale). An exception is Spirit of Sir Freddie. An early Boeing 747, it was named in honour of Freddie Laker of Laker Airways, who helped Virgin Atlantic following the demise of his own airline. G-VFAB—Lady Penelope—gained a special livery to celebrate Virgin Atlantic's 21st birthday.
The current livery dates from 2010 and returns to the "Eurowhite" design featuring purple billboard titles on the fuselage, slight changes to the Scarlet Lady, and new red metallic paint for the aircraft's tail and engines. The wingtips are red, with the Virgin logo on the inside facing passengers on board. The Virgin Atlantic logo was also added in purple billboard titles to the underside of the aircraft
