787 kicks off a new era

VIRGIN Atlantic’s maiden 787 Dreamliner flight from London in the UK to Atlanta in the US was named Birthday Girl to commemorate the 30th anniversary of the airline’s inaugural flight across the Atlantic. TTN’s publishing director, Kim Thomson, was aboard the flight and here is an excerpt of her interview with the airline’s chief executive officer, Craig Kreeger.

What does this new 787 Dreamliner mean for Virgin Atlantic?

This is a defining moment and time for our company.

We have been through a period of recovering our financial performance, while still focusing on our customers, and now we look forward to a really bright future.

This aeroplane literally and symbolically represents the transition from where we have been to the next step. 

The 787 Dreamliner will be a great aeroplane for customers, it’s really comfortable. It has great features every 787 has and it has some unique Virgin Atlantic features such as the mood lighting and the bar.

But in the end, the one thing that will always be unique to us is our service – this is the only 787 where you are served by Virgin Atlantic people. That will really differentiate us. 

What kind of long-term savings are you looking at with this model?

On a fuel basis, relative to the A340-600, which this aircraft is mostly replacing, it saves about 32 per cent on fuel – great for the airline and the environment. It is also about 60 per cent quieter than the planes it is replacing.

The first route this aircraft will service is Boston, and then some other key transatlantic routes.  Where else are you looking at?

We haven’t made decisions yet, but in the end, when we have 21 of these aircraft in about four years from now, it will represent approximately three-fourths of the flights out of Heathrow for us and so virtually all of our Heathrow markets over time will get 787s.

There is an issue we know on slots out of London’s Heathrow and Gatwick. In light of this, will there be new destinations not just for the 787 but for Virgin Atlantic? 

One of the great things about being an airline instead of, say, a hotel company, is that we can take the aeroplanes and put them somewhere else.  So the answer is, of course, there could be changes to our network, and we will always be looking at what is the best place to fly to serve the most customers most successfully, but we have just been through that exercise and we are confident that the network we now have is one that will work. 

Over time, things will change and there are many markets that I would love to see us flying in, markets such as Beijing as Sir Richard Branson indicated, or Sao Paolo, for example, but at this point the places we have put the planes look like they are going to do better and serve more people; so that is where we will keep them for now.

What does Atlanta as a destination mean for Virgin?

Atlanta is a very vibrant city, a lot of corporate headquarters have re-located here as the South has really grown, but as much as that, what Atlanta offers us is 160-plus new destinations that we can serve. 

So we don’t think a majority of our customers who originate in London will end up in Atlanta, many will, of course, but a majority will connect to all these different points around the US, Latin America and the Caribbean that we today don’t serve easily. So Atlanta is both a great destination in its own right, but this is the world’s largest airport, and it is a great hub to make connections in for our customers.

The Dubai route you indicated consists mostly of London-based passengers. How do you compete in this market with regional carriers? 

When I think about what Virgin Atlantic is all about, it’s not just about selling the UK, of course, but our brand resonates biggest in the UK where we have many destinations as opposed to an end point where we only fly to London. 

Markets where the British love to fly are markets we need to serve and Dubai is one of those places. We have a pretty good loyal customer base that we market to, who knows what our product is like and love our brand and we are going to keep selling to them.

We would like to expand that over time, but I think by being true to Virgin Atlantic, the product, our service, and our people is what drives people to choose to fly with us and we need to keep making sure we keep upping our game.

It is a competitive business, it always will be and what differentiates us is that experience.

What kind of revenues are you expecting for 2014?

We don’t really talk about the financial numbers in detail from a planning perspective, but we are approximately a £2.5 billion to £3 billion ($3.8 billion to 4.6 billion) business.

We are not growing a lot, we are changing/upgrading our aircraft, but it is one for one replacements, so our revenues will be in that same level, but the key for us will be to be more profitable  as well as to continue to up our game.

The travel trade is still a significant part of Virgin Atlantic’s booking channel. Is there anything new you can communicate to the trade?

One of the things about an airline of our size and brand strength is that we recognise that customers have a lot of different ways to make bookings and we need to be appealing to customers through whatever channel they book. The trade represents a significant majority of our revenue and we are extremely focused on making sure we work successfully with them.

Lastly, what is the best part about working for Virgin? 

That is a really easy answer and that is the people, it is a culture of a company where we hire people that like to be around others and it is therefore a very welcoming culture.

How does it differ from your previous company, American Airlines?

It is a much smaller company and, as a consequence, I feel like I get to know people a lot easier and a lot more of them with a company of this size.

It has a true sense of fun and I think it doesn’t take itself seriously and that combination appeals to me.

By Kim Thomson