Virgin Atlantic grounds loss-making UK carrier

The airline was intended as a feeder for Virgin’s transatlantic business but the flights were less than half full, making services unsustainable

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Sir Richard Branson suffered his second blow in a month yesterday as the Virgin Atlantic founder announced the closure of the loss-making Little Red domestic airline after just 18 months.

Little Red began flights from Heathrow to Manchester, Aberdeen and Edinburgh in March 2013, using its own prized Heathrow take-off and landing slots as well as those which competition authorities forced its bitter rival, British Airways owner IAG, to relinquish following its purchase of domestic carrier bmi in 2011.

The airline was intended as a feeder for Virgin’s transatlantic business but the flights were less than half full, making services unsustainable. It comes a month after Virgin Atlantic cut routes to Mumbai, Tokyo, Vancouver and Cape Town in favour of new transatlantic business in an attempt to restore profitability this year.

Little Red’s services to Manchester will end in March with final flights to Edinburgh and Aberdeen in September next year. Sir Richard hit out at the European Commission for giving the fledgling airline little chance with its small allocation of airport slots. He said: “We were offered a meagre package of slots with a number of constraints on how to use them and we decided to lease a few planes on a short-term basis to give it our best shot. The odds were stacked against us and sadly we just couldn’t attract enough corporate business on these routes.”

Virgin leased the pilots and aircraft from Aer Lingus to deliver the Little Red service. A Virgin Atlantic spokewoman said around 100 Little Red cabin crew would be offered jobs on its long-haul routes. Virgin used four slots to provide Little Red’s Manchester service, but those used to serve Edinburgh and Aberdeen will revert to British Airways if no other airline applies to the Commission to use them.

The closures comes days after IAG boss Willie Walsh launched a fresh attack on Little Red: “I’ve said from the very start that Little Red will be ‘big red’. I don’t know why they did it. I’m delighted to have been proven correct.”

In a reference to US airline Delta’s 49 per cent stake in Virgin Atlantic, an IAG spokesman added: “Little Red’s planes are flying about one third full so it is no surprise its masters in Atlanta have decided to axe it.”

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