Virgin Atlantic withdraws routes in bid to return to profitability

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By admin September 4, 2014 15:34

Virgin Atlantic withdraws routes in bid to return to profitability

Virgin Atlantic is to concentrate on its core transatlantic services and withdraw services to Tokyo, Mumbai, Vancouver and Cape Town, in a bid to return to a  level of profitability which has proved elusive for the past 15 years.

The airline, which is 51%-owned by its founder Richard Branson and 49% by US carrier Delta Air Lines, also said on Wednesday that Virgin was on track to make an annual profit by the end of this year, after two years of running at a loss.

Virgin said it was targeting “record” profitability by 2018. The current record was set in 1999 when it posted a pre-tax profit excluding special items of around £99 million.
 
 A joint venture partnership with Delta on transatlantic services started on January 1st, after Delta bought Singapore Airlines’ 49% stake in Virgin Atlantic for $360 million in cash last year.

The deal gave Virgin the chance to win more US customers due to Delta’s domestic US connections, while Delta saw increased access to the lucrative but restricted London Heathrow market.

Virgin Atlantic CEO Craig Kreeger said: “Our relationship with Delta … makes the transatlantic more attractive than it used to be. The changes to our route network, combined with the new, more fuel-efficient Boeing 787 Dreamliner planes Virgin is due to start receiving from next month, and planned upgrades to its customer offering will help deliver profitability at record levels on a consistent basis.”

The routes to Tokyo, Mumbai, Vancouver and Cape Town that the company plans to discontinue were “generally speaking” unprofitable, Kreeger said. Virgin will continue to fly to India and South Africa on its Delhi and Johannesburg routes.

admin
By admin September 4, 2014 15:34