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Virgin Atlantic ‘back on track’

October 5, 2013

(Published in TTG 26.09.13)

Virgin Atlantic’s chief executive has said the airline is “absolutely on track” to return to profit by 2015

Talking to Matthew Parsons ahead of speaking at the airline’s annual Agency Awards, Craig Kreeger said that he was confident, despite issues with new aircraft and the threat of rising oil prices.

Virgin Atlantic currently has a firm order for 16 787 Dreamliner aircraft with Boeing, due September next year, which could prove key to the airline’s turnaround plan.

In the year to February, Virgin Atlantic reported a £93 million loss, with Kreeger setting himself a two-year deadline to put the carrier back in the black.

Boeing has been beset by problems with its 787-8, but Kreeger said he had spent a lot of time with Boeing, and was “very confident” about the new 787-9 models, which are currently in testing.

With the more fuel-efficient Dreamliners key to a turnaround, Kreeger said sufficient hedging was in place should the conflict in Syria escalate and impact the price of oil.

“The marketplace for fuel reacted in the short term. We hedge fuel on an ongoing basis; we are reasonably well protected short-term, and to a decreasing extent long-term. Syria is not likely to be long-term,” he said. “We have normal airline contingency plans.”

Meanwhile, speaking about Virgin’s new domestic service, Little Red, which flies from London to Manchester, Aberdeen and Scotland, Kreeger said: “Things have worked out so far”, he said. “It’s important to create new connectivity, and things are happening quicker than planned”.

However, he ruled out immediate expansion, due to a lack of slots.

And yet while he believed the UK was coming out of a recession, he urged the government to “tackle the issues” of Air Passenger Duty and airport capacity, in light of the ongoing Davies Commission.

“I’ve met Sir Howard, he’s a very smart man. I would sound naive among my peers expressing optimism – but I am,” Kreeger added.

Another cornerstone of recovery lies in the Delta tie-up, which was approved by the US government this week. “This is a good for thing customers,” he insisted.

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