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Virgin Atlantic

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Profits jump at Virgin Atlantic

Virgin Atlantic has reported a sharp rise in profits in the year to the end of February, bucking the trend seen by other airlines.

Annual pre-tax profits reached £68.4m ($109m), nearly double the £34.8m seen in the year earlier.

It said the results had been helped by a rise in premium fare passengers.

The results are in contrast to other airlines, including British Airways which reported an annual loss before tax of £401m last week.

BA said the level of premium fare travellers had fallen by 13% in the second half of its financial year and it had seen a rise in fuel costs.

Virgin Atlantic chief executive Steve Ridgway said: "We are winning market share from our competitors during the toughest trading environment ever."

Talking to the BBC, Mr Ridgway added that successful hedging of fuel had helped the firm. Hedging involves buying fuel at set prices in advance to avoid fluctuations in costs on the open market.

During the year, the price of oil veered from as much as $147 a barrel to as little as $38. The carrier spent close to £1bn on fuel for the year.

Tony Dixon, editor of Airliner World magazine, said hedging successfully was a key factor in boosting profits.

Conversely, airlines can be hard hit if they buy fuel "at the wrong time", as Ryanair did, he added.

Another factor hitting airlines in recent months, including BA, was the weaker pound, as fuel is bought in dollars.

Mr Dixon said the outlook for 2009/10 was likely to be better for airlines, amid signs that fuel prices were more stable now than last year and the pound had recovered against the dollar.

Sir Richard Branson, the president and founder of Virgin Atlantic, said: "The last financial year has proven to be the most volatile yet in our 25-year history."

"To increase profits against a backdrop of such a severe recession is an excellent achievement by all of our staff at Virgin Atlantic."

But Mr Ridgway warned: "This year is going to be tough," adding that the airline would "cut costs as aggressively as possible".

Group sales, which include sales from tour operator Virgin Holidays, increased by 8.4% to £2.579bn from £2.38bn in the year before.

Virgin Atlantic is challenging a possible tie-up between BA and American Airlines, citing competition concerns.

The airline, which employs about 8,500 staff, is 51%-owned by Sir Richard Branson with Singapore Airlines owning the rest.

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Virgin to expand China routes?

Virgin Atlantic plans to launch more routes in China as part of its expansion plan, the Shanghai Daily reported on Friday.

The airline will launch routes from Beijing to London in two years and from Shanghai to Australia in 18 months, said the airline's founder, Sir RIchard Branson is quoted as saying. He also suggested that Virgin may offer domestic Chinese flights.

Virgin opened direct flight between Shanghai and Heathrow in 1999. The route's revenue has grown more than 30% annually from 2005 onwards.

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Branson says Government should not bail out ‘worthless’ BA

Sir Richard Branson has urged the Government not to contemplate a bail-out of British Airways, saying the struggling flag carrier is almost worthless, the Telegraph reports. He said Virgin Atlantic had considered making a bid for BA, but ruled it out on the grounds that its liabilities were too significant.

Sir Richard said it would ‘not be in Britain's interests’ for the Government to step in, adding that Virgin Atlantic and other airlines were ready to take on BA's routes and slots at Heathrow. A BA spokesman said his comments were ‘fantasy’ and the airline was, in any case, opposed to state aid.

The Telegraph adds that Willie Walsh, BA chief executive, has taken the 'highly unusual step' of refusing to go before the House of Commons Transport Committee to give evidence for a hearing next week on the future of aviation while he focuses on the ‘exceptionally difficult trading environment’. The committee has excused him from appearing. He did have time to go to an airline conference in Malaysia and an aviation lunch in New York in recent weeks.

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I totally agree with Sir Richard Branson's stance on the future of BA. It's clear that they shouldn't be any attempt to rescue them.

During the last decade BA has completely abandoned the regions. Virtually all it's flights are now operated out of Heathrow forcing many people wanting to go further afield to use connecting flights through continental airports.

It amazes me that an airline that only a couple of years ago was making hundreds of millions of pounds now has the cheek to ask its workers to work for nothing. The only thing the workers would be doing it protecting the silver lined pockets of the airlines share holders.
 

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I wouldn't like it to happen and I certainly understand the importance of the airline to Cardiff airport as it is the British Airways maintenance base. I don't however think that the government should try to bail them out on the basis of it been the nations flag carrier.

After all the company was making millions only a couple of years ago and the money went back to the airline's share holders. Why don't they ask the share holders to bail the airline out?

I don't think that British Airways is worthy of the title it holds as the national flag carrier anyway. If you look at other countries around the world, what national flag carriers do you see that only fly from one of there airports? Very few. 'British' Airways has retreated from the regions back to it's core base in London. It has become solely reliant of London passengers to feed it's services to the world leaving regional airports to the likes of KLM via it's hub in Amsterdam as the only realistic alternative for passengers.

It will of course be sad to see the loss of the Airline especially as the airline was once the country's 'national' airline, but the airline has sadly dwindled through the years to the point it's in today.

If the worst comes to the worst an airline like Virgin will take on the routes worthy of saving. Virgin expressed an interest in purchasing BMI last year with a view to using it's regional hubs to feed it's services. It's a shame they failled to obtain BMI as they could have become the true national airline.

It has also been announced in the press today that Virgin Atlantic will take delivery of 10 new Airbus A330-300 aircraft between now and 2012.

I wonder how this will affect it's Boeing 787 orders?
 

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[textarea]Virgin boss admits knowledge of price fixing

Virgin Atlantic boss Steve Ridgway admitted yesterday that he knew about his airline's collusion with British Airways over fixing the price of fuel surcharges. His name was read out at Southwark Crown Court in London yesterday, in a hearing when one BA director and three former BA executives pleaded not guilty to cartel offences.

Virgin Atlantic blew the whistle on the collusion with BA three years ago and were subsequently guaranteed legal immunity in the UK and USA. The airlines admitted conspiring to fix fuel surcharges on long-haul flights between July 2004 and April 2006, which meant that passengers who bought tickets in the US or the UK were overcharged. Over the period, fuel surcharges rose in step from £5 to £60 for a BA or Virgin Atlantic long-haul return flight. BA was fined £120 million by the Office of Fair Trading and an additional $300 million by the US Department of Justice.

In a statement issued by Virgin Atlantic last night Mr Ridgway said: ‘I apologise unreservedly for my involvement in the case. I have fully co-operated with the competition authorities since their enquiries began in 2006. Although I did not have any direct contact with BA in relation to the passenger fuel surcharges, I regret that, on becoming aware of the discussions, I did not take steps to stop them.’

‘Since 2006, I have ensured that a thorough and far-reaching competition law training programme has been put in place at Virgin Atlantic so that everyone understands the serious nature and true extent of competition laws and so that this does not happen again within our team.’

The Office of Fair Trading brought charges in August last year against Andrew Crawley, BA's head of sales, Martin George, BA's former marketing director, Alan Burnett, formerly head of UK and Ireland sales, and Iain Burns, the airline's former communications chief. They are accused of ‘having dishonestly agreed with others to make or implement arrangements which directly or indirectly’ fixed prices charged by BA and Virgin Atlantic Airways. They all pleaded not guilty to charge of price-fixing at Southwark Crown Court. The trial is due to take place from next January 18 and is expected to last three months. They face up to five years in jail, an unlimited fine, or both.

Other Virgin Atlantic staff named in court were Paul Moore, who was director of corporate affairs, and William Boulter, the former commercial director. Moore left the airline in 2006 and now heads communications at bus and rail company FirstGroup while Boulter took a job at Gulf Air.

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[textarea]Gordon Brown picks Virgin over BA

Downing Street has picked Virgin Atlantic over British Airways to fly Gordon Brown to the United States next month. The securing of the contract to take the Prime Minister’s entourage to the G20 summit in Pittsburgh is seen as a huge propaganda coup for Sir Richard Branson’s airline.

BA lost out to Virgin which undercut the price by a reputed 30 percent. BA has been flying Prime Ministers since Margaret Thatcher privatised the airline in the early 1980s. It is the first time Virgin has flown Mr Brown since he became Prime Minister.

A Downing Street spokesman said: ‘Decisions relating to the Prime Minister’s travel, including the choice of plane for international visits, are taken to deliver maximum value for money for the taxpayer as well as ensuring the most efficient and effective use of the Prime Minister’s time.’

A Virgin Atlantic spokesman said: ‘We are clearly delighted that the Prime Minster has chosen to fly with us. We hope it will be the first of many trips.'

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Not good PR for BA. First after asking pilots and cabin crew to take pay cuts now quoting the state 30 percent more than rival Virgin Atlantic.
 

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[textarea]Virgin steps up opposition to BA-AA alliance

Virgin Atlantic has stepped up its fight against the proposed alliance between British Airways and American Airlines, telling US authorities that the venture should be denied outright.

Virgin made its submission to the US Department of Transport (DoT) today in response to the proposed BA-AA alliance, which would allow the carriers effectively to merge their operations on transatlantic flights.

The US Department of Justice said last month that the alliance would cause “competitive harm” and could lead to fares rising by 15 per cent.

Virgin has backed this assessment in its submission to the DoT — the body that is due to grant or deny the alliance’s request for anti-trust immunity in the coming weeks.

The DoJ’s concerns about the alliance have also been echoed by the European Commission, which said in October that the deal could breach rules on restrictive practices.

A combined BA-AA would have a dominant position on many routes including 80 per cent of flights from London Heathrow to Boston and 62 per cent of flights from Heathrow to New York JFK.

Sir Richard Branson, the president of Virgin Atlantic, said: “Now two competition authorities have voiced their concerns over the proposed BA-AA alliance, we renew our call on the regulators to reject these anti-competitive proposals.

“The competition authorities have thoroughly scrutinised the proposals in an effort to safeguard competition in the interests of consumers. Having done so, both the authorities on opposite sides of the Atlantic have cited concerns. These concerns are absolutely justified and the alliance should not be given the go-ahead.”

This is the second time that BA has tried to forge a partnership with AA and it has denied that the alliance would lead to higher fares for passengers.

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[textarea]Virgin confirm A330 purchases; drop A340s

Virgin Atlantic has confirmed orders for six new A330-300 aircraft with Airbus and signed a contract to lease four more. However, this appears to be at a cost of the airline’s A340 orders, e-Travel Blackboard reports.

Virgin has bought six A330 300 long range aircraft from Airbus, and is leasing a further four from AerCap. The contract was formally completed this week following an initial announcement last June.

The aircraft are Virgin Atlantic’s first A330s, and underscore a commitment by the carrier to invest in the most eco efficient aircraft. They will seat up to 270 in Upper Class, Premium Economy and Economy, and will be the launch aircraft for revolutionary onboard cabin innovations in every class, the airline said.

However, e-Travel Blackboard reports that Virgin has confirmed that they will only operate the six A340's currently in its fleet. A Virgin spokesman said: ‘We don’t have any more A340s on order. The A330s are more fuel efficient and are more suitable for us for our route development.’

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I suspect that many more airlines will start to do the same if the A340 is considerably less fuel efficient.
 

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[textarea]Virgin ‘face pilots walkout’

Air passengers face fresh travel misery after Virgin Atlantic pilots threatened to strike, the Daily Mail reports. The newspaper quotes 'sources at the British Airline Pilots Association (BALPA)' [the pilots union] claiming that Virgin is heading for a showdown with its members for trying to reduce their annual entitlement of 120 days off by 14 days.

The time off is on top of annual holiday because the hours pilots are allowed to work is strictly controlled under aviation rules. Pilots are already angry over a pay freeze and say Virgin is trying to redefine what constitutes a planned or ‘rostered’ day off.

Negotiations between Virgin executives and BALPA are due to be held this week. BALPA general secretary Jim McAuslan told the newspaper: ‘We have been making all the overtures possible to negotiate a way through and it has not been reciprocated.’

A pilot added: ‘We think Virgin Atlantic deliberately want a fight and that management is trying to break the union.’ Virgin said: ‘We have not received any notification of a ballot and will address any related issues as part of our discussions with pilots.’

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[textarea]Family row grounds Virgin Manchester flight

A Virgin Atlantic plane flying from Orlando to Manchester Airport made an unscheduled stop in Canada after a family row erupted between a drunken passenger, his wife and father-in-law.

The pilot flying the Boeing 747-400 was forced to land in Gander in Newfoundland after cabin crew reported disruptive behaviour and arguing, and were unable to calm the passengers down. The plane was carrying 451 passengers and 17 crew and after Canadian police met and arrested British passenger Roy Anthony Heaps, it continued on to Manchester, arriving three hours late.

Mr Heaps appeared in court in Canada and was charged with assault, uttering threats, mischief and interfering with air crew.

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[textarea]Sir Richard Branson begins strategic review of Virgin Atlantic

Sir Richard Branson has hired Deutsche Bank to examine strategic options for Virgin Atlantic in a move that could eventually see him relinquish control of his airline.

The Virgin Group founder, who owns 51pc of Virgin Atlantic, has asked the German bank to study the airline's market position in the wake of British Airways' transatlantic tie-up with American Airlines – an alliance Sir Richard vehemently opposed.

Deutsche's work, which is said to be wide-ranging, includes assessing how Sir Richard can maximise value from his airline, which is 49pc owned by Singapore Airlines and valued by analysts at anywhere between £500m and £1bn. An insider said that Deutsche was "looking at the whole landscape".

Branson says Britain's deficit is a serious risk to recovery One option would see Sir Richard sell down his stake to allow Virgin Atlantic, which has around £2bn sales, to become part of a wider airline grouping – potentially with Lufthansa or a Gulf carrier, such as Emirates or Ethihad. He would then be expected to receive royalty payments for use of the Virgin brand.

Sir Richard, who last year celebrated his airline's 25th anniversary, has been forced to reassess his options in a consolidating aviation market that has seen two key moves by arch-rival BA.

The UK flag-carrier's looming £6bn merger with Iberia and partnership with American Airlines has left Virgin Atlantic looking increasingly isolated – not least given the trio's ownership of more than 40pc of Heathrow's take-off and landing slots and regulatory approval to co-operate on fares and loyalty programmes.

Sir Richard's airline remains a major player at Heathrow, with around 3pc of the slots, but one outside any of the three main airline groupings – the Star Alliance, featuring Lufthansa and United, SkyTeam, including Air France and Delta, and BA's Oneworld combination.

Mark McVicar, an analyst at Nomura, said: "Virgin is becoming increasingly detached as BA, Iberia and American get up and running. An independent airline strategy looks tougher now."

One aspect of Deutsche's work is to evaluate whether Virgin Atlantic should attempt to join either Star or SkyTeam – but either move could trigger a change of ownership at Sir Richard's carrier.

His position is complicated by the holding of Singapore Airlines, a Star Alliance member which paid £600m for its Virgin Atlantic stake in 1999 and has since written it down to zero. It has made periodic attempts to sell the holding.

A long-term option remains a merger between Virgin Atlantic and Bmi, another Star member now owned by Lufthansa. Sir Richard has long coveted Bmi's ownership of 10pc of Heathrow slots and its medium-haul network that he could use to feed Virgin's long-haul flights to around 30 destinations.

Talks between the two companies over a deal broke down in 2008 – and have not been rekindled after Lufthansa last year paid a pricey £223m to take control of the loss-making Bmi.

Longer term, however, one deal that remains under consideration would see Sir Richard inject Virgin Atlantic into a new airline company and Lufthansa inject Bmi. While the German carrier would take majority control of the new company, it would use Virgin's brand and its partners in the Star Alliance to take on BA and Oneworld out of Heathrow. Singapore could see its stake diluted or exit.

Such a deal is complicated by curent valuations, with neither Virgin or Singapore willing to match Lufthansa's valuation of Bmi – or Lufthansa match Singapore's valuation of Virgin. One City source said, however: "This remains the big airline deal, if anyone can work out how to do it."

Virgin declined to comment.

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[textarea]New Virgin Atlantic call centre creates 200 jobs

Virgin Atlantic opened a new customer service call centre in the centre of Swansea this week, which will create 200 jobs over the next two years. The airline’s first base in South Wales at Alexandra House was opened by Deputy First Minister Ieuan Wyn Jones.

The minister described the opening in Swansea as ‘excellent news during the current economic climate’. The new customer service centre will run in conjunction with Virgin Atlantic’s existing operation in Crawley, near Gatwick.

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[textarea]Virgin passengers can book exit row seats – for a fee

Virgin Atlantic has quietly introduced the ability to pre-book exit row seats – for a charge - on certain routes, Business Traveller reports. The seats were previously only available subject to availability on the day of travel at the airport.

The new process is not yet available through Virgin's website, so the seats can currently only be reserved through the airline's call centre. This means passengers who have booked with Virgin online must then call up and make further payment to secure the seats (subject to availability).

A spokesperson for Virgin Atlantic confirmed the move, which came into effect on November 24, and told Business Traveller that passengers ‘will be asked if they are physically able and willing to assist in an emergency evacuation when booking these seats’.

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[textarea]Virgin offer passenger currency deals

Virgin Atlantic has signed a deal with American Express and Moneycorp to offer commission-free foreign exchange and mileage points for frequent fliers. The airline’s customers can now buy foreign currency commission-free at the two companies' bureau at Heathrow, Glasgow, Edinburgh and Gatwick.

The deal also enables Virgin Atlantic Flying Club members to earn one mile for every pound spent, even if they are travelling with another airline. Paul Dickinson, Virgin Atlantic sales and marketing director, said: ‘We are delighted to be working with American Express and Moneycorp in order to offer Virgin Atlantic Flying Club members and passengers even more benefits when they travel.’

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[textarea]Branson considers alliance membership; selling Virgin Atlantic stake?

Sir Richard Branson, the founder and president of Virgin Atlantic Airways, said the airline plans to join a global alliance, though he does not foresee forging any deal that would end his control of the airline, Bloomberg reports. However, both the Financial Times and Telegraph, whilst confirming the airline alliance story, suggest he could give up his controlling stake in the airline.

Sir Richard said he expects to reach an alliance agreement within a year. Virgin Atlantic has operated as an independent airline since it was founded in 1984. Virgin Group has a 51% stake in the carrier, with the remaining 49% held by Singapore Airlines. He hired Deutsche Bank AG to explore its options after BA won approval to boost transatlantic cooperation with American Airlines.

He said: ‘We’ve enjoyed being independent but we think that having some kind of alliance attached to Virgin Atlantic will make us that much stronger. We’re going to need a big brother to take us through the next 30 years. Most of the people we talked to are keen to have Virgin as part of their alliance, and that’s the more likely outcome.’

According to Bloomberg, Sir Richard said, that his surrendering control would be ‘unlikely.' However, the FT suggest that Sir Richard 'is looking reluctantly at selling down his controlling stake in Virgin Atlantic, to ensure it survives mounting competition from larger rival.' He told the newspaper: ‘We realised for the long-term stability of Virgin Atlantic we needed to look at an alliance partner, and whether it is purely an alliance or more than an alliance we’re completely undecided,' adding: 'My preference would be to keep control of the airline.'

Sir Richard was speaking in Toulouse where one of his more recent start-ups, Virgin America, announced 60 firm orders for Airbus A320 jets.

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[textarea]Etihad interested in Virgin Atlantic

The head of Etihad Airways has written to Virgin Atlantic to express ‘top level interest’ in taking over the airline, according to a report in the Sunday Times. Sir Richard Branson’s airline hired Deutsche Bank in November last year to look at options for the airline, which could include a merger or takeover. He said at the time that he thought the airline needed a partner or 'big brother' in the wake of the transatlantic deal agreed by BA, Iberia and American Airlines.

Etihad, which is based in Abu Dhabi and is chaired by Sheikh Hamed bin Zayed Al Nahyan, refused to confirm the reports. A spokesman told the Sunday Times: ‘We have no comment other than that we talk regularly and frequently to many airlines and a range of other businesses from all over the world about business issues and opportunities.'

Virgin said it continued to work with Deutsche Bank to assess growth opportunities. ‘This study is at a very early stage so there is no further comment to make at this time,’ a spokesperson said in an e-mail. Virgin Group currently owns 51 percent of the airline, with the remaining 49 percent owned by Singapore Airlines.

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[textarea]Virgin cabin crew voted world’s best looking

Passengers have voted Virgin Atlantic cabin crew the world’s best-looking, the Mirror reports. Britain’s biggest airline BA did not make it into the top ten in a poll for Travel & Meetings Show, which was dominated by Eastern and Arab crews.

UK business flyers favourite crews were: 1. Virgin Atlantic 2. Singapore 3. Etihad 4. Emirates 5. Aer Lingus 6. Lufthansa 7. Cathay Pacific 8. TAP 9. KLM 10. Iberia

Greg Dawson from Virgin said: ‘We are delighted to be the number one choice.’ BA said: ‘Models in adverts do not equate to professionals in the sky.’

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[textarea]Virgin Atlantic reveal stupidest passenger questions

Virgin Atlantic staff have revealed the most bizarre questions asked by passengers on flights, with ‘Can you turn the engines down, they're too noisy!’ topping the list. In a survey of 3000 Virgin Atlantic cabin crew, common questions from passengers ranged from ‘Please can the Captain stop the turbulence?’ to ‘Is there a McDonald's on board?

Many passengers also ask if windows can be opened and overestimate what facilities are on a plane, with some asking for directions to the showers, and where the children's playroom is. Crew members have also been asked to book in massages for Barbie dolls, entertain rowdy children, and even help find a missing glass eye.

Caroline Lynam, customer relations manager at Virgin Atlantic, admitted that sometimes, being a flight attendant is tough. She said: ‘Virgin Atlantic crew will always go that extra mile to offer our customers the best possible service, but there are some requests that even we find somewhat challenging.’

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