Virgin Atlantic, a trading name of Virgin Atlantic Airways Limited and Virgin Atlantic International Limited, is a British airline with its head office in Crawley, West Sussex, England. The airline was established in 1984 as British Atlantic Airways, and was originally planned by its co-founders Randolph Fields and Alan Hellary to fly between London and the Falkland Islands. Soon after changing the name to Virgin Atlantic Airways, Fields sold his shares in the company to Richard Branson in return for unlimited free travel. Its maiden flight from London–Gatwick to Newark took place on 22 June 1984.
The airline along with Virgin Holidays is controlled by a holding company, Virgin Atlantic Limited, which is 51% owned by the Virgin Group and 49% by Delta Air Lines. It is administratively separate from other Virgin-branded airlines. Virgin Atlantic Airways Limited and Virgin Atlantic International Limited both hold Civil Aviation Authority (CAA) Type A Operating Licences (AOC numbers 534 and 2435 respectively), both of which permit these airlines, operating as Virgin Atlantic Airways, to carry passengers, cargo, and mail on aircraft with 20 or more seats.
Virgin Atlantic uses a mixed fleet of Airbus and Boeing wide-body aircraft and operates to destinations in North America, the Caribbean, Africa, the Middle East, and Asia from its main hub at Heathrow and its secondary hub at Manchester. The airline also operates a seasonal service from Edinburgh. Virgin Atlantic aircraft consist of three cabins: Economy, Premium (formerly Premium economy), and Upper Class (business).
In July 2017, Virgin Atlantic announced its intention to form a joint venture with Air France-KLM, but, in December 2019, it was announced that the joint venture would not include a stake in the company.
On 5 May 2020, it was announced that due to the COVID-19 pandemic, the airline would lay off 3,000 staff, reduce the fleet size to 35 by the summer of 2022, retire the Boeing 747-400s, and would not resume operations from Gatwick following the pandemic.
Virgin Atlantic filed for Chapter 15 bankruptcy protection in New York on 4 August 2020, as part of a £1.2billion private refinancing package. The airline joined the SkyTeam airline alliance in March 2023.
History Origins
Virgin Atlantic has its origins in a joint endeavour by Randolph Fields, an American-born lawyer, and Alan Hellary, a former chief pilot for British private airline Laker Airways. Following the collapse of Laker Airways in 1982, Fields and Hellary decided to establish a new company, initially named British Atlantic Airways, as a successor. Reportedly, Fields had formed a concept for an airline that would operate between London and the Falkland Islands during June 1982, when the Falklands War had just finished.
However, it was soon determined that the short runway at Port Stanley Airport, and the time it would take to improve it, would render a route to the Falklands commercially unviable; thus, the idea of such a service was dropped. In its place, Hellary and Fields commenced efforts to secure a licence to operate a route between Gatwick Airport, London and John F. Kennedy International Airport, New York City. During May 1983, a three-day inquiry was conducted, which chose to reject the application following objections from British Airways, British Caledonian and BAA.
Hellary and Fields then applied for a licence between Gatwick and Newark, New Jersey, using a 380-seat McDonnell Douglas DC-10.
Formative years
On 22 June 1984, Virgin Atlantic operated its inaugural scheduled service, flown between Gatwick and Newark using a leased Boeing 747-200 (registration ), christened Maiden Voyager, which had been formerly operated by Aerolíneas Argentinas. From the onset, its activities were augmented by leveraging existing Virgin Group resources, such as tickets being sold at Virgin Megastores record shops.
Part of Richard Branson's declared approach to business is to either succeed within the first year or exit the market; this ethos includes a one-year limit on everything associated with starting up operations.
In November 1984, the airline launched a service between Gatwick Airport and Maastricht Aachen Airport in the Netherlands using a chartered BAC One-Eleven.
In 1986, the airline added another Boeing747 to its fleet and started a scheduled route from Gatwick to Miami. Additional aircraft were quickly acquired, and new routes were launched from Gatwick, such as to New York JFK in 1988, Tokyo Narita in 1989, Los Angeles in 1990, Boston in 1991, and Orlando in 1992. In 1987, Virgin Atlantic launched a service between Luton and Dublin using secondhand Vickers Viscount turboprop aircraft, but this route was withdrawn around 1990. The airline also operated a Viscount service between Maastricht and London Luton Airport in 1989.
Competition
In 1991, Virgin Atlantic was given permission to operate from Heathrow following the abolition of the London Air Traffic Distribution Rules (TDRs), which had governed the distribution of traffic between Heathrow and Gatwick airports since 1978, primarily to bolster the profitability of Gatwick.
The Civil Aviation Authority also transferred two pairs of unused landing slots that British Airways held at Tokyo's Narita Airport to Virgin Atlantic, allowing it to increase frequency between Heathrow and Tokyo from four to six weekly round trips, making it easier to compete against British Airways. The chairman of BA, Lord King, called the CAA's decision, which the government had endorsed, "a confiscation of his company's property".
In later years, the scarcity of Heathrow slots became a structural constraint on Virgin Atlantic's growth and on other airlines seeking to enter the airport. The Competition and Markets Authority has described slots at capacity-constrained airports as a key barrier to entry, because an airline that wants to compete on a route may have to obtain slots from incumbent carriers. A 2023 Department for Transport consultation said that the new entrant rule was intended to help airlines gain access to slot-congested airports, but that in summer 2022 only 12 Heathrow slots were allocated to new entrants from the pool, out of 152,613 summer slots at the airport. The same consultation said that, because most slots at capacity-constrained airports were allocated under historic rights, it was not always practical for new entrant airlines to pursue pool slots.
In the year to October 1993, Virgin Atlantic declared a loss of £9.3million. The decision to abolish the London TDRs and to let Virgin Atlantic operate at Heathrow, in competition with British Airways, became the trigger for BA's so-called dirty tricks campaign against the company. During 1993, BA's public relations director, David Burnside, published an article in BA News, British Airways' internal magazine, which argued that Branson's protests against British Airways were a publicity stunt. Branson sued British Airways for libel, using the services of George Carman QC. BA settled out of court when its lawyers discovered the lengths to which the company had gone in trying to kill off Virgin Atlantic. British Airways had to pay a legal bill of up to £3million, damages to Branson of £500,000, and a further £110,000 to his airline. Branson reportedly donated the proceeds from the case to Virgin Atlantic staff.
During the late 1990s, Virgin Atlantic jets were painted with "No Way BA/AA" as a declaration of its opposition to the attempted merger between British Airways and American Airlines. In 1997, following British Airways' announcement that it was to remove the Union Flag from its tailfins in favour of world images, Virgin Atlantic introduced a Union Flag design on the winglets of its aircraft and changed the red dress on the Scarlet Lady on the nose of aircraft to the union flag with the tag line "Britain's Flag Carrier". This was a tongue-in-cheek challenge to BA's traditional role as the UK's flag carrier.
In June 2006, US and UK competition authorities investigated alleged price fixing between Virgin Atlantic and British Airways over passenger fuel surcharges. In August 2007, BA was fined £271million by the UK Office of Fair Trading (OFT) and the USDepartment of Justice. However, the Chief Executive of Virgin Atlantic, Steve Ridgway, was forced to admit that the company had been a party to the agreement, had been aware of the price-fixing and had taken no steps whatsoever to stop the price-fixing.
In April 2010, a tip-off from Cathay Pacific led to an OFT investigation of alleged price-fixing between Virgin Atlantic and Cathay Pacific on flights to Hong Kong between 2002 and 2006. Cathay Pacific received immunity from prosecution for reporting the alleged offence. A maximum fine, if found guilty, was 10% of turnover, which, based on the £2.5billion in sales for the year to February 2009, would have been £250million. At the time, the OFT stressed that it should not be assumed that the parties involved had broken the law. The OFT cleared both airlines in December 2012, concluding there were no grounds for action.
Recent years
In December 2004, Virgin Atlantic began flying to Sydney, Australia via Hong Kong. In May 2014 the Sydney service ceased.
In September 2014, Virgin Atlantic announced plans to scrap flights to Tokyo, Mumbai, Vancouver, and Cape Town, and to codeshare transatlantic flights with Delta Air Lines; the company was also reported to be considering axing its new Little Red domestic airline after suffering heavy losses.
On 6 October 2014, Virgin Atlantic confirmed that Little Red services between London and Manchester would end in March 2015, and that the Scottish routes would be terminated in September 2015.
In June 2015, Richard Branson stated that Virgin Atlantic had needed the aforementioned deal with Delta to survive, after losses of £233million between 2010 and 2013. In the same month, the airline announced it would cut 500 jobs to establish a more efficient management structure.
In July 2017, Air France-KLM nearly acquired a 31% stake in Virgin Atlantic for £220million. This deal however never went through.
In 2019, Virgin Atlantic began to allow its female flight attendants to not wear makeup and have a choice to wear trousers rather than a skirt. In September 2019, it was announced Virgin Atlantic had outlined plans to expand. A key part of these plans would have been acquiring Flybe, with a plan to rebrand it as "Virgin Connect" from early 2020; however, the plans fell through when Flybe filed for administration and ceased operations in March 2020. In December 2019, Branson announced that he would be scrapping the sale of a 31% stake in the airline to Air France-KLM and that Virgin Group would retain its 51% shareholding. In the same year, Virgin Atlantic stopped flying to Dubai, a major aviation and tourism hub owing to COVID and issues related to competition.
In March 2020, during the COVID-19 pandemic, Richard Branson and Virgin Atlantic attracted criticism by asking employees to take eight weeks' unpaid leave. However, this was before the UK Government announced the Coronavirus Job Retention Scheme, and employees were subsequently furloughed instead. Whilst furloughed, many staff volunteered with the National Health Service, answering 999 calls, and at NHS trusts in London and the South East. On 27 March, it was reported that Virgin Atlantic was expected to seek a government bailout, which was on 1 April reportedly backed by Rolls-Royce, Airbus and Heathrow Airport Holdings.