Branson predicts Global Growth for Virgin Atlantic

Sir Richard Branson today outlined Virgin Atlantic’s strategy for growth through a mixture of new routes and extra capacity on Virgin Atlantic’s network, the establishment of new airlines across the world’s developing aviation markets and launching services from Europe’s capital cities to America, under a new EU/US Open Skies deal.

Speaking on the day of the airline’s first flight to Sydney, Australia, Sir Richard said:

“Adding Sydney to our route network is another milestone in Virgin Atlantic’s success story. The destination is the airline’s 23rd and further develops our presence in the Asia Pacific region. It also demonstrates our strategy of growing the airline by 10-15% per year. We’ll achieve growth in both the leisure and business markets.

“From our very first flight between London and New York and the early development of our routes to Miami and Orlando the platform of our success has been our strong leisure traffic. Other airlines have in the past disparaged economy travellers and sought to concentrate on the business travel market. This is a mistake that Virgin Atlantic has never made and will never make.

“Over the years Virgin Holidays has become the biggest tour operator to Florida and in a few short years operating to the Caribbean is already closing in on the number one spot in that region as well. We are going to build on this success by significantly expanding our leisure routes out of Gatwick and Manchester; adding a number of new destinations that will see Virgin Holidays more than double in size.

“Having said that I’ll never forget Freddie Laker’s advice not to build an airline solely on economy passengers. Accordingly, we will be adding both capacity and new destinations out of Heathrow on key business routes. Our wish list of new routes includes Melbourne, Dubai, Bangkok, Chicago, Toronto, Jamaica, Nairobi, and Rio.

“Our recent order for up to 26 new Airbus A340-600s means that in total we have firm orders for 24 aircraft and options for a further 19 over the next few years. Together with our existing fleet of 29 aircraft these aircraft will give us the potential to double the size of the airline over the next five years. As well as expanding to new markets our award winning Upper Class Suite is enabling us to grow our market share on our existing route network.”

Sir Richard went on to outline the second element of the growth strategy:

“Allied to growing Virgin Atlantic’s core services we are also planning to use our successful experience with Virgin Blue and Virgin Express to set up a number of new airlines around the world. Virgin America is making great progress towards a launch in 2005 and Virgin Nigeria is aiming to start flying from Spring next year. The latter will be 49% owned by Virgin Atlantic and serves as a template for future expansion.

“Growth in the established aviation markets is likely to be steady in the coming years but growth in the developing markets like Africa, India and China is likely to be much more pronounced – 10%, 20% perhaps 30% per year. Virgin’s established world class aviation reputation and our development of the Virgin brand puts us in a unique position to set up new aviation ventures around the world. The Virgin brand is in the top 10 most respected brands in almost every trading area in the world.

“The Virgin brand has a proven track record of success in aviation and we’ve proved we can work in both long and short haul across a number of countries. As Virgin Nigeria demonstrates, where possible we’d like to use the strength and experience of Virgin Atlantic to give birth to these new airlines.”

Finally, Sir Richard outlined the third aspect of the strategy:

“We believe that the first ever “Open Skies” agreement between the US and EU will be agreed in the near future. We expect a true liberalisation of the current constraints and regulations which have held back airline growth and, in particular, we expect to be given the opportunity to operate Virgin Atlantic services from other European cities to the big US destinations like New York and Los Angeles.

“The Virgin Atlantic brand is clearly well established in the major US cities and we’re pretty well known across Europe. We’d be confident that the quality of our service would enable us to compete with the likes of Lufthansa out of Frankfurt, Air France/KLM out of Paris and Amsterdam, Alitalia from Rome and even other European business centres. Our Upper Class Suite beats every competitor across Europe hands down and we’d reflect the culture of each country with our crews, onboard service and inflight entertainment.”

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