Virgin Atlantic CEO Focused on Return to Profitability in 2024

Virgin Atlantic CEO Shai Weiss looks forward to a good winter. Bookings are strong and leisure travelers, especially those paying top dollar for the seats in the pointy end of the plane, are eager to travel to the airline’s many warm-weather destinations.

“All destinations — the Caribbean, we’ve just launched Dubai, [and] of course the Maldives — all of them are doing well ahead of our plans,” Weiss said Tuesday in an interview with Skift in New York. “Leisure demand is strong, [and] the premium cabins have been exceptionally strong.”

Weiss was in the U.S. following a sustainable aviation fuel demonstration flight from London to New York. That flight was part of an effort by Virgin Atlantic to push the UK government to enact policies supporting the development and production of the low-carbon fuels.

His comments fit the transatlantic travel narrative that airlines have painted this year. “Record” demand, as many executives have put it, has driven up fares and profits for carriers from British Airways and Iberia-parent International Airlines Group to United Airlines. That’s true even amid the broader macroeconomic uncertainty and conflicts in Ukraine and, more recently, the Middle East.

Corporate travelers have yet to return in full. Weiss said corporate volumes are only back to roughly 80% of 2019 levels, though that does represent a five-point improvement from the level he cited in comments in October. But that has not stopped airlines for resuming flights and adding new destinations that cater to the hoards of leisure fliers.

For Virgin Atlantic, that means new service to the Maldives this winter and resuming seasonal flights to Dubai. The airline will add Bengaluru — its third destination in India — and Sao Paulo to its map next summer.

Profitability Virgin Atlantic’s Goal for 2024

“At the end of the day, the focus on the controllable should yield a return to profitability in 2024 for Virgin Atlantic,” Weiss said when asked if the global outlook had changed the airline’s goal of turning a profit next year. By “controllable” factors, he meant Virgin Atlantic’s own costs and network, as opposed to external issues like oil prices and wars.

“It was always the goal and remains the goal,” Weiss added on profitability.

Virgin Atlantic lost more money during the pandemic than it made during the entirety of the 2010s: £903 million ($1.1 billion) in operating losses from 2020 through 2022 compared to £77 million in cumulative operating profits during the entire previous decade. Those losses, and Virgin Atlantic’s previous financial struggles, forced it to restructure during the crisis and cut some £300 million in annual expenses.

The airline turned its last operating profit in 2019, and net profit in 2016.

Part of the profitability push has meant adapting its network in response to demand. Flights to Austin, which Virgin Atlantic launched with much fanfare last year, will end in January due to the slower-than-expected corporate travel recovery. The cutback comes even as joint venture partner and major shareholder Delta Air Lines invests in its own Austin “focus city.”

Virgin Atlantic has also suspended Tel Aviv flights due the Israel-Hamas conflict. Weiss, who grew up in Israel, said the carrier hopes to resume service there next year.

Virgin Atlantic Is Hopeful SAS Will Join Delta, Air France Pact

Virgin Atlantic has no plans to participate in the latest round of European airline consolidation but that does not mean it won’t benefit. All of its U.S. flights are part of a joint venture with Air France-KLM and Delta that allows the airlines to coordinate everything from schedules to fares in the market. That pact could expand to include SAS if Air France-KLM succeeds with its plan to buy a minority stake in the Scandinavian airline.

“If that deal is done, I would really hope to see SAS move over to the light,” Weiss said when asked about SAS joining the partnership.

With no intra-European flights itself, the addition of SAS in the transatlantic venture could mean more feed for Virgin Atlantic’s own flights across the pond. For example, travelers from SAS’s Copenhagen, Oslo, and Stockholm bases could connect over Heathrow to Las Vegas, Orlando, or Tampa — none of which the Scandinavian airline currently serves.

Roughly a third of Virgin Atlantic’s passengers, or about 3,000 people a day, connect over Heathrow with the majority local UK travelers.

SAS would also be another SkyTeam Alliance partner for Virgin Atlantic if the Air France-KLM deal is approved by a U.S. bankruptcy court and European regulators. The UK airline only joined the alliance in March but the expanded network of partners that provides is meeting all expectations, Weiss said.