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Aviation's Tipping Point - Sir Richard Branson

Michael
 on June 8, 2009 8:52 AM | | Comments (11) | TrackBacks (0) |

I've just returned from a trip to Shanghai, to celebrate Virgin Atlantic's 10 years of flying to the city. Never could the Chinese expression "may you live in interesting times" be more apt.

In fact, interesting is an understatement. Unbelievable times would be more appropriate.

Everything has been thrown at our industry - volatile oil, swine flu, recession, environmental pressure, higher government taxes. What next?

We're clearly at a tipping point. The next 12 months will determine how our industry looks for the longer-term. Our industry will be shaped by:

  • the survival of the fittest and the demise of the weakest
  • how regulators protect consumers and smaller airlines from dominant groups or alliances
  • whether Boeing can finally launch the game-changing 787 and prove its fuel-efficiency
  • the success of a global aviation deal at the Copenhagen Summit
  • and political decisions around Heathrow's third runway

With these big events ahead, we'll discover how aviation will change for the better, and hopefully not the worse.

 

Picture credit: Steward Cook/Rex Features 

I'm honoured to be Flightglobal's Guest Editor for the day and hope you enjoy the site today.

On the site today you can:

Richard Branson

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11 Comments

Hello Richard,

..'whether Boeing can finally launch the game-changing 787 and prove its fuel-efficiency '..

Good question. We're all waiting for that. I hope you've downloaded piano-x and compared the B787 outputs with your internal Virgin projections / intelligence.
p.s. Is F1 influencing your hairstyle in the blog photo? You look like Button - or maybe I shouldn't say that - oops too late :)
Regards, Dimitri

Welcome Sir Branson, thank you for being Flight Global's guest editor for the day.

Question: with the current economic challenges for the airlines, do you think different business models are required? i.e. the competition for price on internet websites is so fierce, that in order to win the customer there, you have to offer travel below or near cost. I think a radical change in business model should be evaluated. Perhaps even change airports, make smaller terminals run by the airlines focused on service. Perhaps that can increase flight experiences and make travel enjoyable again?

Gunn Hultin

Welcome Sir Richard to Flight Global!

The question I have for you is that when I choose to fly whether on business or for pleasure, the two things I always take in to account is "value for money" and whether the airline is part of either One World or Star Alliance. I am sure that this question has been asked many times already by others to you so my question is, when is Virgin going to join a proper alliance??

An example of another excellent airline is Air NZ, they are notably one of the best airlines in the world and a member of Star Alliance. Their Frequent Flyer programme is excellent(especially the gold card members) - I myself have already flown with them 6 times this year! so how can I choose Virgin Atlantic when both of you guys are excellent?

Richard

Hi Peter,

You’re right, models constantly need to evolve to keep up with consumer taste and economic reality. These days travellers expect much greater value for their ticket price and so airlines have to work even harder to improve the journey experience at every stage – whether it’s between check in and aircraft or on the flight itself.

Sadly in the recession models have often meant charging more for less, e.g. excess baggage and ancillary revenues. The key in future is to create a model built around speed of experience and sustainability involving cheaper, lighter aircraft.

Richard

Richard

Gunn,

We’ve proved that we can be successful without being in an alliance. We have many codeshares and agreements in place with other carriers around the world and our customers have benefited hugely as a result. Alliances do have some benefits but they also can restrict growth and innovation because of the need to fit into that particular alliance’s structure.

It’s ironic that many of the codeshares we have in place are actually with Star Alliance members. After all, you wouldn’t expect us to go with One World, would you?

Thank you for your comments regarding our service. I’d say you should choose us every time (well I would say that, wouldn’t I) because of our award-winning cabin crew and in-flight entertainment. I promise you you’ll be left with better memories than our rivals would leave you with!

Richard

Welcome Sir Richard and thank you for your input and accessibility.

While I know you are not psychic and can't say exactly, what are your thoughts about the number of carriers which will survive this time of "survival of the fittest and the demise of the weakest". What kind of new landscape will we be looking at?

When and how will trip travel times change? Isn't there a market out here for supersonic travel?

Lastly, you're a great author! Thank you for the fine reads.

Keep Believing...

Bille Baty

Dmitry Malyanov

Hello Richard,
who is an art designer of Virgin air division? Is it one person? or you use different agencies to support all the airlines projects? tell us please your relations with design.
Thanks in advance,

Dmitry

Mel Simson

Congratulations on bringing Virgin Atlantic all the way from those tough days with that ex Highland Express B747-100 to what you have today, a good product, a modern fleet and seemingly profitable airline. Despite your obvious business acumen, I believe you will agree you had a lot of luck or perhaps you would prefer to describe it as taking advantage of the situation/opportunity at the time.

The cyclic nature of the aviation industry coupled with world economic conditions has always been a challenge but the current recession, compared with previous downturns, is going to test the industry to the nth degree. Highly leveraged airlines, particularly those with older generation equipment, are bound to fail, merge or if lucky then be purchased. This could also be said about mega size operators, in a downturn big is not always financially healthy.

Given the success of the LCC’s it is more than likely that we will see greater protection for the passenger whereas I believe that current dominant groups and airlines will ultimately be forced to disentangle in order to provide more, clearer, choice for the passenger and therefore provide real competition, which will be good for the industry.

The European LCC business model, effectively, being lean and mean and charging for everything in order to make the ticket price look cheap is a real challenge for legacy airlines providing a full service and like VA a really pleasant travel experience for the passenger.

In the next decade I believe that we will see some major changes to the way all airlines operate their aircraft. These changes will be stimulated by pollution issues, fuel conservation, increased regulatory envelopes as well as competition.

In the UK, we need a New London Airport, not the Heathrow extension which will only benefit the airport owner. Only a modern high tech airport is going to seriously challenge and compete with other European airports. A so called runway #3, in real terms it will be a self contained mini airport, simply does not provide operators with any real benefits other than a relatively small amount of short to medium term increased capacity. Many other countries have realised this and built new airports and logistics to/from capital cities accordingly.

With a slowdown in business we have an opportunity to rethink our business models and look for more cost effective ways of “giving the passenger” more for less, thus more bums on seats. For sure the B787 and other new aircraft on the drawing board are going to offer significant improvements but this alone is not enough!

Dear Sir Richard,
Lighter than air! Speed is not an issue for most, and the enhancements (in every regard) make this the most cost-effective air vehicle for the masses. Be an advocate-you're one of the few who would be taken seriously by developers!
Blessings, John P.

Alex Welstead

Hi Richard,

Congratulations on a happy and successful 25 years, and I wish you every success for the next 25.

Suborbital point to point - Are you seriously looking at it this as an extension of the Virgin Galactic business model? I certainly hope so.

Recruitment - Get some civilian trained pilots in to Virgin Atlantic, just as good if not better than the "single pilot fast jet" ex military! ;)

Sergio Ruiz-Vela

Dear Richard:
Congratulations, You have become an example and a inspiration. I have had a very dificult career as a pilot because all the crisis in my country (Mex.)recurent every 6 years. So your 25 year story is inspiring.
I like to know your opinion on pilot jobs in the coming years and if pilots like me (58 years) are out of the game. Thank You and wish you another 25 years of great exiting adventures.

Capt. Sergio Ruiz-Vela

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