Virgin Atlantic Reveals Plan for Massive Expansionby Daine Taylor
Virgin Atlantic made a huge announcement earlier this week when it revealed its plan to challenge British Airways for dominance at London’s Heathrow Airport, as well as significantly increasing its long-haul route network, and launching a new comprehensive suite of domestic and European route offerings when the airport expands.
Currently, British Airways’ parent company IAG holds a near-monopoly on Heathrow Airport, controlling more than half of the airport’s total capacity. According to a statement from Virgin Atlantic, a new report published last week found one in four passengers flying from the airport – 18.5 million people – have no choice but to fly with the IAG airline group. The report also concluded that these passengers may be paying up to 10% more in air fares as a consequence.
Virgin hopes to break up IAG’s control over Heathrow when its proposed expansion to a third runway is completed. Currently, Virgin services 19 long-haul destinations from Heathrow. But if the airline gets its way, it will serve up to 84 new destinations in the UK, Europe, and across the globe — quadrupling the number of routes offered.
“Never has the need for effective competition and choice at Heathrow Airport been more evident than during this summer of disruption, which has brought misery for tens of thousands of travelers,” said Shai Weiss, CEO of Virgin Atlantic, referencing the recent pilot strikes that plagued British Airways earlier this month.
“Britain, and those who travel to it, deserve better than this. Air passengers need a choice, and Virgin Atlantic is ready to deliver when Heathrow expands,” Weiss said.
Improving competition and connectivity
The UK government has set a primary objective for the allocation of additional Heathrow capacity to facilitate effective competition between airlines. The expansion, in addition to benefitting consumers by providing more choices and lower fares, will also serve to improve domestic and international connectivity for destinations that are currently underserved or unserved.
Virgin Atlantic’s new proposed route network plans enable the government to meet all of these objectives by bringing new competition across multiple domestic, European, and global routes, as well as opening up brand-new destinations. Virgin intends to become the UK’s second flag carrier, connecting passengers between its domestic, short- and long-haul services.
“Heathrow has been dominated by one airline group for far too long. The third runway is a once-in-a-lifetime opportunity to change the status quo and create a second flag carrier. This would lower fares and give real choice to passengers, as well giving Britain a real opportunity to boost its trade and investment links around the world,” said Weiss.
The plans represent a fourfold increase on Virgin Atlantic’s current international network and include connections to unserved destinations such as Kolkata (India), Jakarta (Indonesia) and Panama City (Panama), where currently passengers cannot travel non-stop. In total, Virgin Atlantic plans to serve 103 domestic, European and long-haul destinations, up from 19 long-haul destinations in 2020. Of the 84 new destinations planned, 12 are domestic, including Belfast, Glasgow and Manchester; 37 are European, including Barcelona, Dublin, and Madrid; and 35 are global, including Buenos Aires, Jakarta, and Kunming.
The rules governing the allocation of new slots for Heathrow are currently under review by the government, but Virgin warns that the new take-off and landing slots must be allocated in such a way that enables the development of a second flag carrier with the necessary scale to compete effectively with IAG.
As things currently stand, IAG holds more than 55% of all the take-off and landing slots at Heathrow, with no other single airline holding more than 5% of the remaining slots. Virgin Atlantic intends to compete on 25 routes where there is an IAG monopoly.
“Changing the way take-off and landing slots are allocated for this unique and vital increase in capacity at the nation’s hub airport will create the right conditions for competition and innovation to thrive,” said Weiss.