Saturday, October 5, 2024

Virgin Atlantic eyes Gatwick return as it gives up on Heathrow third runway

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Virgin continues to own operating slots at Gatwick under a so-called babysitting agreement with EasyJet, which allows the positions to be reclaimed.

Mr Weiss said that while a return was a long-term possibility, it would not be undertaken lightly and the airport was no closer to relaunching there.

The Virgin chief spoke on a flight to Las Vegas, where the company is marking its 40th anniversary with the launch of services from Manchester to the gambling and entertainment mecca.

Mr Weiss said Manchester can expect to get one or two new destinations a year under the airline’s expansion plan, while flights may also be put on at Bristol. Virgin’s only other UK base is in Edinburgh, but there is a chance that flights from Glasgow and Belfast, which have remained grounded since the pandemic, could also be restored.

To put on the extra flights, Virgin is looking at leasing extra aircraft to expand its fleet beyond the 45 planes the company will have once the last A350 jet from its existing order book arrives.

Mr Weiss stressed that all elements of the strategy must deliver profitable growth and do nothing to undermine the progress of its VelocityX plan, which has sought to stabilise the airline after it came close to collapse during Covid.

He said: “We’ve been through the valley of death and we’ve come out the other side.”

Virgin is on course to post record revenue this year and return to a positive operating profit this year, Mr Weiss said. The airline will not make a net profit as a result of the cost of servicing £1.5bn of debts run up during Covid.

The company could look to reduce this burden by raising fresh equity to pay down debt. However, this would dilute the holdings of Sir Richard and minority owner Delta Air Lines, which Mr Weiss said was an unattractive option.

Mr Weiss said: “Our shareholders kind of like where we are. Our job in management is to generate cash, to service the debt and strengthen the balance sheet.”

An expansion of the Virgin Atlantic Holidays arm, which generates 20pc of revenue, is likely to feature in VX30, since the business also helps fill Virgin planes.

Other efforts will focus on extracting more value from collaboration with Virgin Flying Club and the Virgin Red rewards club.

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