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Virgin Atlantic guts its network – Tokyo, Cape Town, Mumbai, Vancouver scrapped

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If anyone was still wondering why US airline Delta bought 49% of Virgin Atlantic last year, the answer is now clear.  It intends to turn it into a UK – US feeder service for its own routes.

That is the only interpretation you can have following the major announcement Virgin made yesterday.  It is scrapping its routes to Tokyo, Cape Town, Mumbai and Vancouver.  Sydney was dropped earlier in the year.

In return, it is increasing frequencies to various US destinations.

The full details can be found here on the Virgin Atlantic website.  In summary:

Virgin Atlantic

New flights:

5th daily flight from Heathrow to New York JFK

2nd daily flight from Heathrow to Los Angeles

2nd daily flight in Summer from Heathrow to Atlanta

5 additional flights per week in Summer from Heathrow to San Francisco

2nd daily flight in Winter from Heathrow to Miami

The following changes are being made with Delta:

Virgin to take over Heathrow to Detroit from Delta, this becomes a year-round rather than Summer-only service

Virgin to take over Manchester to Atlanta, in return for Delta taking one Heathrow to Newark service

Delta to launch Manchester to New York

The following routes are being scrapped:

Tokyo, as of 31st January

Mumbai, as of 31st January

Vancouver, as of 11th October (was Summer only)

Cape Town, as of 26th April (was Winter only)

If you booked on any of the cancelled services, Virgin is being very non-committal about what will happen to you:

What are the options available for passengers?

We will discuss options with passengers and will consider offering a full refund or rebooking them onto another carrier.

The telephone number to call if you are impacted is here at the bottom of the page.

None of this should come as much of a surprise, of course.  Virgin Atlantic has been losing money for a long time.  The on-board Upper Class product and service – which admittedly I have not flown in a long time – is generally unpopular with the business community.

Whilst Virgin Holidays does an excellent job of filling the economy seats, the real money is in the pointy end.

The airline is also surprisingly low-key in its promotional activity.  It is rare (at least, rare compared to BA and the Middle Eastern carriers) that I write about a Virgin fare sale in premium classes.

UK-US air routes are amongst the most profitable in the world, commanding high premium fares for relatively short distances.  You can’t blame Delta for insisting that Virgin focusses its activities there.

It also punches another hole in the Heathrow expansion argument.  We are constantly told that there is huge untapped demand for more flights to India, for example, yet both UK airlines have cut back massively in recent years.  If Virgin cannot make Tokyo work, you have to question how they would make money flying to second-tier cities in China.

The question now is how much more of the Virgin route network is safe.  The Dubai route must be getting crowded out by multiple BA, Emirates and Etihad services.  The Hong Kong route has lost its onwards connecting passengers who continued to Sydney.  Is there really a lot of premium traffic to Delhi?  The others look a little more secure but lets see.

(Want to earn more Virgin Flying Club miles? Click here to see recent articles on Virgin Atlantic, Little Red and Flying Club, and click here for the latest news on earning and spending other airline and hotel points.)

Comments (74)

  • Paul says:

    Have to agree that this puts a big hole in the LHR expansion argument. It further restricts competition to both the USA and the rest if the world and will simply lead to even higher fares and falling standards.
    It’s telling that neither VS nor BA have introduced any new product as they clearly have no need. The alliances and link ups creating legal cartels and fare / schedule collusion means UK consumers are exploited and I’ll served. A new airport providing access to any carrier to operate any route is the only way to improve competition and lower fares.
    Can’t say I will miss Virgin as have never flown long haul with them but it’s another nail in the competition coffin!

    • Andrew (@andrewseftel) says:

      I’m not sure it does. Seems to be that airlines are having to choose safe bets on routes because slots are precious and scarce. If the supply of slots into LHR was essentially unlimited, we might have seen Virgin choosing to keep these routes.

  • James67 says:

    Such situations are very annoying and inconveniencing for passengers. I hope Virgin will be helpful in their reaccommodatiin. To ofeb airlines just go down the refund route which can end up both a nightmare and very costly for passengers. I think EU regulations should be substantially tightened in such situations to make airlines liable not just for full fare refu d but also demonstratable additional losses such as prepaid hotel stays, tours etc. If so then we would fibd their reaccomnodation much more effective. It is always a good idea where possubleto pay a little extra for flexible hotel stays etc to guard against such situations. I cannot help but feel Delta are taking Virgin backwards.

  • JQ says:

    Well they certainly spent a lot of money promoting themselves in Vancouver at the start of this summer.

  • MDM says:

    I am one of the thousands affected by the service cuts. A long-time planned trip to Tokyo (for leisure, not work) cancelled.

    I called shortly after the announcement was made yesterday (on the number advised by Virgin). This situation had clearly taken the staff by surprise.as they were only informed themselves an hour earlier. They did not have any plan in place to advise customers calling in, the agent was at a loss and although polite, suggested I call back in two weeks time!

    So I called back a few hours later. with more success this time. My details were taken, our tickets were booked for ANA in Business (we had Upper Class tickets booked).. The dates are unchanged fortunately.

    This is a disappointing move. I suspect JNB and HGK will follow in time and Virgin will be truly Atlantic again. Not what SRB had in mind a few years ago I don’t suppose.

    The loss of eastern flight options detracts from the appeal of the Flying Club unless one wishes to confine reward trips to the USofA. This year I had diverted most miles I earn to BAEC. I imagine more will do the same now.

  • Dan says:

    Good news VS is taking on the Manchester Atlanta route, and DL are launching a Manchester New York route, however I would have thought a New York route under the Virgin brand would be more successful as at present there are no UK airlines from Manchester to the big apple.

  • RIccati says:

    On related note, I remember there was a post about billions of Avios issued in the course of last year.

    Apparently FFP are a cash-generating and growing business, which for the smaller airlines represent up to a third of enterprise value
    http://www.breakingviews.com/21162722.article?h=7aadb862ab540f23799e5f45de651662&s=2

    It makes sense then if the Flying Club looses popularity as network shrink. In turn, that means destruction of value for Virgin Atlantic itself as FFP business gets sacrificed for the needs and desires of the main shareholder. Synergies of the M&A!

    • Phillip says:

      Yes, but you have to remember that the FFP of the main shareholder happens to currently be the biggest in the world following all its recent aqcuisitions, overtaking American’s Aadvantage! I believe AA’s merger with US won’t dent that either.

    • Rob says:

      Are suggesting that Detroit is less attractive for a holiday than Cape Town?!

      • Lady London says:

        My first thought when I saw the announcement yesterday was that Detroit airport probably PAID them to fly there.

        • Mikeact says:

          I was hoping that KL/AF would have eventually persuaded Delta to bring Virgin into the SkyTeam alliance. We were hoping to use up our Million+ miles on some of the now defunct routes.
          nb (And you think you BA regulars get stung on ‘Taxes etc.’..you should see what KL/AF demand..totally out of all proportion. )

        • Mikeact says:

          Why would you say that….an amazing airport and very convenient to connect elsewhere.

          • Lady London says:

            Because the economic situation of Detroit is dire. The city is broke. So it would make sense to give an airline incentives to open up there as it might increase business for the town. Do you remember cities used to pay Ryanair £1-2m to open flights there?

  • Rohan says:

    Oh no ! What a waste of the credit card bonus and the vouchers that I just revived as the route I wanted to fly is scrapped

  • Phillip says:

    I think this is certainly a case of “Delta guts Virgin Atlantic’s network”.

    I don’t see this as going against Heathrow expansion – at the end of the day, they’re just saying there is more business for them elsewhere. That doesn’t reduce the need for expansion. This is a single airline dropping just four routes already served by other airlines. It has no reflection on the demand from other worldwide airlines (let alone BA) for access to Heathrow.

    In addition, I think there is something to be said about the Virgin brand itself – I think it is very much a niche market at the pointy end for VS and as such their business very limited. I don’t think any advertising would do them many favours. They may have been “something different” ten years ago, but the Middle Eastern carriers have reset the bar on that, especially travelling east. Plus a number of other Asian airlines, particularly in China, have made inroads in connecting traffic, particularly with the relaxation of short-term tourist visa rules. All they need is to up their game on service levels and they’ll be taking in a lot of eastbound European traffic.

    As MDM mentions above, Virgin will be living up to their name.

    • Rob says:

      Under EU law it would be illegal for Delta, as a US airline, to be controlling Virgin which is why I could not use your proposed headline!