The Hindu Business Line : ‘We will bring our style of service’

Virgin Atlantic Airways is bullish on the Indian market. During a recent interview in London, the airline’s Chief Executive Officer, Mr Steve Ridgway, talked of plans for setting up an airline in India, expansion plans and more.

Excerpts from the interview:

It has been a while since any UK carrier asked for more flights to India. Do you think there is over-capacity on the route?

No. I think the Indian Government did a very good job in liberalising the bilaterals between India and the United Kingdom.

They could see how strategically important it is for both the economies. As a result now there are a lot more services between India and major locations in the world, London being one of them.

We have seen all the extra services on the Delhi and Mumbai routes. So I think it is pretty clear that as and when more capacity is needed, it will be possible to start. But right now everybody is maturing, seeing the routes grow.

By when do you expect that to happen? Are the yields on the sector so low that no airline is demanding additional services?

There is no doubt that with all the capacity in the market, fares are competitive and this is against the backdrop of very high oil prices. We will monitor over the next 18-24 months. But the Indian Government has a very good view on liberalising aviation and as and when the market needs it we should be able to operate more services.

What options will Virgin look at?

Our strategy has always been to make sure that we have competitive frequencies. Then there comes a point when business travellers and the corporate market want additional frequencies. So over a period of time we would like to look at other Indian cities. Since we are relatively new boys, Delhi and Mumbai are clearly important.

BMI withdrew from India. Will you look to take up those flights?

The capacity is clearly there and I think it is a reflection of the market being served just about right.

The delivery of the Boeing 787 has been delayed. You have ordered this aircraft. Will the delay affect expansion into the Indian market?

We are one of the launch customers for the Boeing 787-900. At the moment we are hoping and believe that this aircraft will not be delayed. But obviously, we will have to wait and see. Until Boeing tells us we don’t know about the delay.

But will the possible delay affect India?

We have a big fleet and the induction of the Boeing 787 is planned around the retirement of some of our aircraft. So we have flexibility.

You were experimenting with Boeing about a new method of push back of aircraft?

We have done a lot of work with Boeing There is no doubt that if you can move aircraft on the ground without using their engines it will be a lot more efficient.

It is a pretty complex subject as it involves modifications both in airfields in terms of taxiways and how you pick aircraft up.

Ultimately, it is likely to need the next generation of aircraft to either be suitably equipped to do lots of towing and that too at high-speed or alternatively you may even see — and I think the manufacturers are looking at this — separate electro-hydraulic power driven systems that would enable the engines to be switched off when you get on the ground and then run either off the APU or on aircraft batteries.

At the very least, it has stimulated a huge debate about how we can move aircraft around airfields without having the main engines running and that is going to be good for everybody — the environment and airline efficiency.

The Government has liberalised FDI in some sectors of aviation, but not in domestic airlines. Is Virgin still interested in the domestic aviation market?

We would like to see the market liberalised so that we can look at the opportunities that our expertise brings. Sir Richard Branson has been quite public about that being of interest. We have had a lot of success with Virgin Blue in Australia and Virgin America and also in Nigeria.

That is the good thing about Virgin; in aviation we are quite non-aligned. We are an international brand that can bring whatever model is relevant for running an airline.

The Indian Government does not allow international airlines to hold a stake in domestic airlines but has allowed 100 per cent FDI in charters and seaplanes. So will you look at these?

I do not think that this is our area of expertise. I think we need to see how the market develops and the market will liberalise as we go forward. We are keeping an eye on it.

What can you bring to the aviation market that is not available in India?

We will bring our brand and our style of service.

What will it mean for the passenger?

It will mean more choice and probably a different style and variety of service. Everywhere. Be it in the air or on the ground. How we sell, how we get people, how we deal with them. It is that subtle sort of blend on the way you mix the ingredients to put together and make your service distinctive.

You are already in the Australian and US markets. What kind of difference has Virgin made there and do you see this being replicated in India if you are allowed to start?

All I can tell you is that there are customers in America who fly transcontinental flights within the US only with Virgin America. They are deliberately choosing our flights because of a whole package of stuff, including new ways of booking.

Airlines in India are already providing a number of add-on services, such as booking on the Net and tele check-in apart from a wide variety of food choices, so where else do you think you can strike?

It is about how you put these things together and the style with which you deliver them. We do things differently. We are known for innovation; we are known for being different so we will package it like that.

How has the start of Virgin America helped Indian travellers?

Virgin America is one of the new generation low cost carriers. Obviously it has the benefits of a new fleet. Many of its costs are very low. But equally it is a high service, high touch airline. It is doing well. It is early days but they building up their network. It is mainly focussed on transcontinental routes and major cities on the east and west coast.

The other interesting fact is that Virgin Atlantic serves all those gateways. So gradually there will be more options for travellers. But please bear in mind that they have been operating only for six months. At the moment we are looking at raising our commercial cooperation with them and gradually developing booking systems that can book a passenger seamlessly through.