It’s Virgin mate, but not as you know it!

It is well know that the invention of low cost airlines over the last 20 years has severely dented the power of full service airlines in Europe. Those weaker ones including Malev, Sabena and Swissair have disappeared, some to be replace by versions, some not.

Those which have been left have found a survival of the fittest, with the low cost airlines, especially Ryanair driving down costs and lowering fares. Those airlines have to compete and the compromises are clear – you only have to look at the likes of British Airways, KLM and Lufthansa to see this.

There is a new battle though, and one which is going to change the industry yet again – the invention of the Low Cost Long Haul airline. At first it was rubbished as not feasible, and Air Asia tried and failed to make a London to Kuala Lumpur route work, but the tide is now turning. Not able to increase utilisation to the same extent as short haul – the long haul model is very economy centric, but still with a premium offering. More nimble and effeceint than previous carriers, they are able to offer lower fares, and also drop complicated rules, such as staying a Saturday night to get a cheap fare to America.

That is causing a problem for the network carriers, as their prized profit making parts of the business are being eroded. Norwegian has been the pioneer of this in Europe after a rocky start taking on brand new 787’s, but Lufthansa is following with Eurowings – again facing problems, and other players such as WestJet in Canada and Air Asia and Scoot in South East Asia.

A Low Cost Virgin isn’t something new, in fact the very roots of the airline were to compete like Freddie Laker in the 70’s, although the product going upmarket has meant competing against the likes of British Airways, American and United.

Little is known so far about the offshoot of the main airline, but rumours have suggested a fleet of ex-Delta A330’s will be based at Gatwick on leisure orientated roots, possibly only featuring Economy and a revised Premium Economy cabins. This would put the carrier right up against Norwegian who has had a head start and could see new routes opening to the Caribbean and Indian Ocean.

Even if this doesn’t see the light of day change is coming, and it needs to keep up, even if that means going downmarket.


High Flying Virgin

What a great breath of fresh air the ITV documentary on Virgin Atlantic was, quite unheard of over the last 20 years with the UK aviation. Instead of seeing crowds of people moaning about missing their flights or problems occurring at airports, or draconian measures when employing staff as seen British Airways, this was a true good news story bringing new life into a well loved brand.

Reaching 30 is a great achievement for such a small airline, and much like Ryanair have punched above their weight at time in order to change the industry. It has been achieved in different ways, Virgin Atlantic pride themselves on offering a better product than the competition, and battle the establishment, especially at Heathrow. Despite being opposed to the BA/AA tie up, it has now teamed up with Delta Airlines to protect their position on their most profitable market, that of the USA.

Ryanair did it a different way, bringing in a lower cost to operate, and therefore bringing the cost of flying down. This had fed through to these more established airlines, even though Ryanair is 30 as well today. In the first episode we saw the build up to the launch of their first 787, which will replace the less fuel efficient A340-600 and 747-400’s, ordered in a day when they believed ‘four engines 4 long haul’. That left them in a difficult position when the fuel price went through the roof, and the 787 is the first step to realigning the business to one which is profitable.

What came across yesterday was the positivity throughout the company. That wasn’t just from the top, but from the cabin crew and background staff, not all in the public eye. Compare that to the recent documentary on British Airways by the BBC and it looks sour and draconian in comparison.

The pressure to increase profits brought in the new and unpopular Upper Class Suite on the A330, the aircraft employed by the airline to bridge the gap during the delays caused on the 787 programme. It was too small, too narrow and the four abreast seating didn’t work on a similar cabin width to the A340 which only has 3. With the new seat shown on the episode, costing several hundred thousand pounds that it has been reversed on the 787. Listing to the public in what they want is a necessary part of any successful business.

It’s great that we can have such positive, forward thinking and emotionally compelling companies broadcast on television. A real breath of fresh air.