Virgin Atlantic’s venture into domestic aviation has proved financially disastrous. During the first six months flying from Heathrow to Aberdeen, Edinburgh and Manchester, the average flight has been only one-third full. For every occupied seat, two have gone empty – even though the Virgin plane is cheaper than a Virgin train.
Flights from Heathrow to Manchester, branded as “Little Red”, started in late March. Links to Scotland began early in April. At the time, Sir Richard Branson promised Little Red would “deliver Virgin Atlantic’s rock and roll spirit as well as real value for money”.
Few passengers have been tempted so far. The Independent calculates that 825,000 seats were available during the first six months. Virgin initially told us that 250,000 passengers had flown on Little Red, but late today said the number was “closer to 300,000”. If the true figure is midway between the two, the “load factor” was 33 per cent – in contrast to the industry standard of close to 80 per cent, while low-cost carriers such as easyJet and Ryanair achieve around 90 per cent.
The aviation analyst John Strickland said: “The poor loads indicate that the majority of point-to-point traffic on domestic flights now uses low-cost services from other London airports.
The Independent’s journey aboard this afternoon’s Virgin Atlantic flights 3047 and 3048 from Heathrow to Manchester and back appeared to confirm the low sales. The service is operated by Airbus A320 jets fitted with 174 seats. The northbound leg carried 46 passengers, including two infants. Going south, I was one of only 38 passengers – meaning the plane was less than a quarter full. I bought a ticket on the day for £64, £12 less than Virgin Trains’ lowest same-day rail fare between Manchester and Euston.
While the aircraft are in Virgin Atlantic colours, they belong to Aer Lingus. The Irish airline “wet-leases” the jets and crew to Virgin, and gets paid regardless of how well or badly the route is performing.
One man enjoying the acres of elbow room was Robert Meizel, an American businessman connecting to a New York flight. “If they cut the fares they might fill a few more seats,” he said.
Industry insiders estimate that direct losses on the network have been running at between £2m and £3m per week. Calculations are complicated, however, because – like BA – Virgin is prepared to sustain some losses on domestic operations that feed traffic to lucrative intercontinental flights.
Douglas McNeill of Charles Stanley Securities said: “These are routes which British Midland struggled to make work… Virgin Atlantic must make sure it doesn’t just carry on where British Midland left off.
With so few seats filled, each passenger contributes disproportionately to noise and pollution. John Stewart of the anti-expansion pressure group HACAN Clearskies, said: “This confirms what many have suspected – that a big problem at Heathrow is that so many planes are far from full. Full planes may lessen the pressure for a third runway.”
A spokeswoman for Virgin Atlantic said: “As with any new route it takes time for customers to become fully aware of our service. It is normal to have comparatively low load factors in the first six months… Our business plan allowed for this. Bookings for future travel continue to grow steadily.”
Top of the flops: Branson’s bad ideas
Branson’s ill-fated attempt to take the fight to Pepsi and Coca Cola’s duopoly in 1994 with his own fizzy drink was doomed from the start. Despite a great fanfare – Sir Richard famously drove a Sherman tank through New York crushing rivals’ bottles – the company was quietly dissolved after 16 years.
Despite the catchy name, the wedding dress business was a flop. The venture suffered losses in the competitive market and stopped taking orders in 2007.
Branson attempted to take on Apple’s iPod and iTunes with Virgin Pulse and Virgin Digital in 2004. The company folded within a year.
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