Talking airline business with Virgin Atlantic VP, Paul Charles

Paul Charles, Virgin Atlantic

Paul Charles, Virgin Atlantic

My prediction last month that Virgin Atlantic, one of the world’s leading long-haul airlines, is not on the brink of collapse seems to have proven true. The airline recently announced its financial results – which turned out surprisingly positive, given the tatters the rest of the industry currently is in. Premium passenger numbers were up 22% and profits up a whopping five times compared to the previous year. So I decided to speak with their VP of Corp Comms, Paul Charles (a former BBC TV and Radio presenter!). Here are his responses to questions about how Virgin Atlantic is dealing with the industry crisis so well.

Beating the current crisis

How has the current Wall Street crises affected Virgin Atlantic, especially load factors on London-New York flights?

Load factors have actually not dropped, thanks to Virgin Atlantic’s advance planning – we saw this coming two years in advance. New plane orders were deferred, bank balance was bolstered over time and the latest earnings have only demonstrated the sound planning further. Moreover, the fact that Virgin Atlantic is a long haul carrier has helped too, since it’s the short haul business that tends to suffer more in times like these.

How are the corporate deals that Virgin has negotiated holding up?

Unlike a number of other major airlines in the region, we do not rely heavily on financial institutions for our corporate accounts. The diversity in our corporate customer base has allowed us to weather this crises much better than our competition.

How important is the Virgin Atlantic Flying Club as a structural anchor to keep business travelers, especially in this climate?

We find that our most loyal business travelers are those who have benefited from being part of our award winning frequent flier program. They not only love the privileges, but also appreciate subtle conveniences like “Limo to lounge”, where they are able to go straight to the business lounge after arriving only a short time before the flight, while we take care of all their check-in formalities. This is a service also available to our Upper Class passengers.

Succeeding in the future

Do you think airlines with a stronger brand equity will come out stronger from the crisis? Why?

Certainly. Customers will stand by the brand that they trust, and that gives more stability to the business for an airline like Virgin Atlantic.

What do you make of the emerging business models in aviation, where airline conglomerates like AirFrance+KLM, BA+Iberia+AA and Lufthansa+Swiss are sprouting up?

We feel that although coordination between carriers is an emerging reality, it’s the markets that they target that’s key. For example, BA+AA is something we are vehemently against, since they would effectively own over 60% of the London-New York market share. In fact, even more, if you consider other US East Coast cities like Boston. This is not good for the consumers, and not good for competition in the industry. We are hoping that the authorities would look into this matter seriously and prevent this from going ahead.

Is Virgin Atlantic likely to go down that road too (collaboration)?

We are certainly open to the idea, and would consider seriously if an opportunity for a mutually-beneficial partnership comes along in the future and something that benefits all customers.


Note: This was meant to be a podcast, but the interview recording mysteriously vanished from my Windows PC. Hence, I’ve pledged to only use my Mac for all podcasts from now on!

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