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Aviation History
1986
1986 - 1966.PDF
|||i»Si|;lP^f:;:';r" • _/_^teaftfiHiia^B' ... .~ Scarlet Lady, above, is the Zatest addition to the Virgin fleet. British Air Ferries is quite happy for its Viscount, opposite left, to fly around in Virgin's colours. Opposite right is the original Maiden Voyager and, centre, chairman and president Richard Branson financial director Nigel Primrose con cedes. But its general overheads are low to counteract it, he adds. "Being basically a one-aircraft operator helps to keep costs down, and our offices are hardly luxur ious," he says, glancing around at the crowded seventh floor facilities above a Crawley cinema. For all the hype surrounding it, Virgin has modest ambitions. It does not want to become a large, unwieldy carrier, Wilson insists. The idea is to remain small enough to be able to seize an opportunity when it arises. After two years Virgin runs only three routes with two 747s of its own and a Viscount chartered from British Air Ferries. The Gatwick-Newark route is still the mainstay of the airline. Flights are now daily, with nine additional services sched uled for August. The second 747, which was delivered at the end of June this year, is plying the Gatwick-Miami trail three times a week, and the Viscount flies daily to Maastricht in the Netherlands. Licence applications are going through for London to Dublin, Jamaica and, since July 31, to Charlotte in North Carolina. "Jamaica is the one we are focusing our attention on at the moment," says Wilson. The Jamaican Government's response is encouraging, and the area is ready to be opened up again, he continues. Besides the scheduled routes, Virgin undertakes ad hoc and regular charters. Its latest coup was winning a Ministry of Defence contract for the Falklands against competition from the flag carriers. The aircraft ran into technical difficulties in Ascension on one trip, but Virgin managed to get parts flown out fairly rapidly and, Wilson claims, proved to the Government that small carriers, without replacement aircraft, can complete a con tract on time. Virgin has been having discussions with Barbados-based Carib bean Airways for some time which may result in it flying charters on Caribbean's behalf. Virgin has been one of the voices shout ing for liberalisation in Europe and, typi cally, has become the hero of the National Consumer Council for doing so. It has talked about cheap flights to Paris, but will only expand into Europe "as quickly as the climate changes". Cautious growth "We look at these things stage by stage", Wilson says. "I think it is unlikely that the regulations will change fast enough to give us enough routes to warrant more than one more aircraft in the first instance". "We are in no rush for further expan sion", he adds. The 747s are still being under utilised, Wilson says, although Virgin expects to achieve a very respect able 4,000hr per aircraft this year. When it does extend its network, Virgin will follow past acquisition patterns. "We have a policy of buying aircraft from Boeing, even secondhand aircraft, for which we pay a premium, rather like buying a car from a reputable dealer", Wilson says. The latest 747 was ex- Alitalia and subsequently leased to CAAC. Boeing then refurbished the interior, airframe, and engines as for Virgin's first aircraft. Virgin willingly pays the price for improved reliability. Minimising downtime takes a high priority. Although Virgin contracts-out all of its maintenance to British Caledonian, it still employs three engineers of its own to liaise with BCal and supervise the engineering work. "It is very important when you have a small fleet that it is reliable and constantly monitored", Wilson says. The high marketing costs, low fares and, initially, minimal business traffic, make one wonder how the youthful carrier can have made a profit. But the directors insist that it did, and did so independently of the tour operator, cargo, or paper distri bution, subsidiaries. "Apart from the start-up year cost the airline has been, and is projected to be, profitable," Primrose says. Turnover this year should be around £50 million. In the year to January 1986 Virgin made profits of about £2 million on a turnover of £35 million. It carried 225,000 passengers over the year on two routes, and claims that it has now captured around 50 per cent of the Gatwick-Newark market in the face of competition from US low-cost carrier People Express. Is Virgin worried by the majors treating it in the way they allegedly treated Laker? "As a small operator we have to be very aware, and are always looking over our shoulders," Wilson says, "simply because major operators are very large and able to apply so much competition on one route". They may not even be doing so deliber ately, he adds. "We are fortunate in that 32 FLIGHT INTERNATIONAL, 16 August 1986
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