As it places another major order with Airbus, Virgin Atlantic Airways is talking about doubling in size and taking on British Airways across more of its most profitable long-haul markets.
Announcing an order for 13 more Airbus A340-600s and 13 options, Virgin Atlantic chairman Richard Branson said that the carrier planned to take on BA on lucrative routes such as those to Brazil and Argentina in South America and Dubai in the Middle East.
The new order adds to five A340-600s which are still on order alongside six A380s. The airline currently operates seven A340-600, for which it was a launch customer, nice A340-300s and 13 Boeing 7474-400s.
Growth will not only take place out of the London Heathrow and Gatwick bases, but also Manchester, where Virgin now bases just a single aircraft. It plans to raise this to eight, with the Caribbean a likely area of expansion.
The rate of growth in the London area will depend on the availability at slots, particularly at congested Heathrow. Branson says that he has been promised by UK transport minister Alistair Darling that mixed-mode runway operations at Heathrow would be pushed through "as fast as possible".
Heathrow currently operates in segregated mode, with one runway used for take-offs while the other is used for landings, with a daily switch around at 15:00. A relaxation of this regime, which is designed to alleviate noise, would add take-off and landing slots in the crucial peak periods. The Heathrow slot pool is nearly empty, although there is an active "grey market" in slot trading.
Branson says the order will involve a "small trade-in" of A340-300s, and adds that the recent decision to put back delivery dates for the A380 will enable the carrier to bring in some of the new aircraft earlier than would otherwise have been the case.
Virgin Atlantic chief executive Steve Ridgway confirms that Airbus is helping to finance the deal. The aircraft will primarily be on operating leases. The airline estimates that the expansion will create at least 5,000 new jobs.
Virgin Atlantic will launch services to Sydney via Hong Kong in December using an A340-600. The European Commission has made it clear that it takes a dim view of member states that continue to negotiate bilaterals in favour of home carriers, warning that this breaks guidelines put in place after the European Court of Justice ruled that nationality clauses in air service agreements are illegal. However, Ridgway is confident that Brussels will not put a stop to agreements which add competition and liberalise air transport.
Elsewhere, Virgin Atlantic is in talks with the Nigerian government on setting up a successor to the defunct Nigerian Airways. The other bidder on the shortlist is South African Airways.
Branson also confirms that Greenbriar Equity Group, a US investment firm co-founded by former United Airlines chairman Gerald Greenwald, could be one of the lead investors in low-cost launch Virgin America.
* The US Department of Transportation has given the go-ahead to a codeshare agreement between Virgin Atlantic and America West Airlines. The deal will offer passengers onward connections from the UK carrier's US gateways of Los Angeles, San Francisco, Las Vegas and Washington. America West offers 90 destinations in the USA, Canada, Mexico and Costa Rica from hubs in Phoenix and Las Vegas. The two carriers already have a frequent flyer partnership, but Virgin previously codeshared with the now defunct National Airlines at Las Vegas. America West already codeshares with BA out of Phoenix.
COLIN BAKER LONDON
Source: Airline Business
