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US PRICING IN CONVERSATION


Virgin Atlantic CEO CRAIG KREEGER talks to Paul Revel onboard the airline’s inaugural flight to Seattle


Presumably that onboard product is top secret… Of course it is!


Craig Kreeger


Virgin Atlantic’s 2016 financial results show a small profit, £23m, on a group revenue of £2.69bn. How do you view these results? 2016 was a very good year in a difficult economic climate. It was our third consecutive year of profitability, our fourth year of profit


improvement, albeit modest. But it is a new world economically – particularly the impact of the change in strength of the pound. The June 23 Brexit vote was obviously a surprise to many. A weak pound is not beneficial for our business… we estimate it cost us £50m from June 24 to the end of the year.


Tell us about your plans for new aircraft We have ordered 12 A350- 1000s for between 2019 and 2022, scheduled to replace our last four A340-600s and our eight B747s.


It will be a shame to see the end of those B747s... It will be a sad day for all of us, the 747 is a fantastic aircraft. But the economics of the A350 are phenomenal, in terms of fuel consumption and environmental impact. We’ll be able to put a great customer proposition onboard, too. We’re really excited about it.


16 BBT May/June 2017


The financial reports cites your £300m investment plan – what’s the latest on this? All aircraft will be wifi enabled by the end of May. We’re refurbishing our A330 upper class, to look a lot more like this one [onboard the B787], by the end of the year. We’ve moved all Delta’s flights into Heathrow T3. It means Delta customers now have access to our Clubhouse, and check-in facilities – it helps with efficiencies, we now share ground handling and manage Delta check-in. So we’re now co-located in the big airports, like JFK, Atlanta and now Heathrow. We moved into our new facility at Gatwick in January, in the north terminal, where we have the brand-new Clubhouse and V-Room.


The report also cites a 30 per cent y-o-y increase in passengers connecting between Delta and VA – how is the joint venture going? We are still fine-tuning the network and putting the right airline and aircraft in the right markets… this flight we’re on now is a good example – the Virgin Atlantic brand fits very nicely with Seattle and its entrepreneurial spirit and young vibrant culture. And while it’s expensive for Brits to go abroad, it’s cheap for Americans to come to the UK. Having a partner on the other side who can ramp up marketing and sales focus on the US point of sale to offset some of the weakness we see in the UK – that’s a fantastic benefit of this JV. This year we probably need them more than we ever have. • Read the full interview at buyingbusinesstravel.com


Trump policies forcing US travel industry to cut prices


US HOTELS AND AIRLINES ARE CUTTING PRICES as inbound travel drops following the stance on immigration by President Donald Trump, Expedia’s chief executive has said. Dara Khosrowshahi has called on the US administration to present an “open and friendly face” to the world amid falling interest in visiting the country. “I think that because of some of the perceived positions coming out of the current administration, the US as a destination is potentially looking less attractive as a product,” Khosrowshahi told The Financial Times. “One of two things is going to happen. Either the US has to go on sale in order to keep volumes up, or volumes are going to come down. When we look at our business, the leading indicator is pricing. Pricing has come down,” he said.


Expedia said it will reveal the full picture behind the pricing shifts when it reports its first-quarter results in May.


LONG-HAUL


Norwegian expands low-cost long-haul to Asia


NORWEGIAN HAS LAUNCHED A NEW ROUTE from Gatwick to Singapore as the airline expands its low-cost long- haul UK network into Asia for the first time. From September 28, the airline will operate four weekly flights, increasing to five in the winter, from Gatwick to Singapore Changi Airport. Prices start from £179 one way. The new route will be operated on its 787 Dreamliner aircraft, offering 344 seats in economy and premium economy. Norwegian CEO Bjorn Kjos said: “Our transatlantic flights show the demand for affordable long-haul travel, so we are delighted to expand into new markets and offer our first route to Asia.”


Nigel Turner PEOPLE


CWT’s Nigel Turner set to retire


CARLSON WAGONLIT TRAVEL’S NIGEL TURNER is to retire in April after 34 years at the TMC and 43 in the industry. The UK senior director of


programme management started at CWT as a branch and implant manager, before moving to account management, and then to a number of teams from the UK board, including public sector, business services, sales and programme management. • Interview with Turner at buyingbusinesstravel.com


BUYINGBUSINESSTRAVEL.COM


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