Betting on Africa
Africa is a key market for Virgin Atlantic, which has been flying to the continent for over 20 years. In fact, its London-Johannesburg route has been one of the most profitable and successful for a while, which is one of the reasons it’s added a second daily flight to its schedule. Oli Byers, Senior Vice-President, Global Sales & Customer Loyalty at Virgin Atlantic, gave editor Dylan Rogers of few minutes of his time on a recent trip to South Africa. Q: Was the decision by South African Airways to stop flying to London the reason behind the launch of Virgin Atlantic’s second daily flight to Johannesburg?
A: It certainly was a factor. We are always on the lookout for opportunities. Johannesburg is one of our most profitable markets, due in large part to the South African market, which put it at the top of the list of places we could fly into more often. The move by SAA left a gap in the market and we moved very quickly to fill it.
Q: How is the Nigerian market performing?
A: Nigeria as a country has been through a really tough time recently, particularly from an economic perspective given its reliance on oil. However, it's a strategic market for us; we wanted to remain consistent and were proactive in managing the situation, so we were able to come through it. We were actually quite innovative in the way we tried to sell in that market. Not just to hold a strategic position, but also to work for the people there. And now that the country is in a better position, so are we; the market has rebounded strongly. We plan to stay in Nigeria for the foreseeable future.
Q: Could we see another Nigerian flight in the near future?
A: As a market, from a regulatory perspective, Nigeria has many restraints in place that prevent us from growing. The bilateral agreement does not allow for another flight. However, when we look at the fleet and aircraft opportunities, we may be able to add more capacity. We don't have plans to do this right now, but it is something we'll keep in mind.
Q: What changes has Virgin Atlantic made to its economy class product?
A: Earlier this year we launched Economy Lite and Economy Delight, which sit alongside Economy Classic, because we wanted to give customers more choice. The business case that we looked at back in 2016 was around creating more choice for customers, because we saw that they weren't buying based solely on price. They were looking for experiences, and economy as a single cabin didn't offer enough choice, so we wanted to create more opportunities for them. The decision involved redoing the economy class cabin in many aircraft and we actually removed seats from the Boeing 787 to create more legroom for the Economy Delight section. It's been a great success so far. While other carriers have added seats to their aircraft layout to densify flights at a lower cost, we've gone in the opposite direction and customers have reacted positively. Economy Delight presents great opportunities; no other airline offers a product with extra legroom and enhanced ground experience. It's a fantastic product for cost-conscious business travellers.
Q: Is the Economy Lite product an effort to compete with lowcost carriers?
A: Not really, no. What the emergence of low-cost products on long-haul flights has demonstrated quite clearly is that there are people who are willing to forgo some flexibility in favour of a lower price tag. It's not necessarily about wanting to compete with those airlines, but rather offering customers the products that they want to purchase. But it is important to us that, regardless of the ticket fare booked, passengers get the Virgin experience, which is not a low-cost one. Now, customers can buy the product they want (with the corresponding attributes) while receiving a high-value Virgin experience with quality onboard meals and friendly, helpful crew members on board and on the ground.
Q: What are the major talking points in the global airline industry at the moment?
A: In the UK, the focus is on Brexit and the effect this is having on the economy. In the aviation sector, Brexit definitely has consequences in the European market place, although not so much for Virgin Atlantic because of the long-haul nature of our business. From a consumer demand perspective, we're looking at how Brexit impacts and people's willingness to travel, the confidence they have within the market place. We're monitoring this closely, because outbound leisure travel from the UK is a key factor. Brexit also affects the foreign exchange rate, which is of great interest to Virgin Atlantic because of the different areas into which we operate. ■