Craig Kreeger
Atlanta - As part of its tightening relationship with joint-venture partner Delta Air Lines, Virgin Atlantic recently began service to Hartsfield-Jackson International Airport here, taking over one of Delta's three daily flights to London Heathrow. During an event inaugurating that route, Virgin Atlantic CEO Craig Kreeger and founder Richard Branson spoke separately to Business Travel News senior editor Michael B. Baker about how the joint venture is affecting the carrier, Virgin's long-term growth plans and the company's interests outside of air travel. An edited transcript of those conversations follows.
How has the Delta joint venture affected your corporate business share?
Craig Kreeger: The Delta partnership, for us, serves two specific purposes. One of them is to offer new destinations connecting onto Delta's network [where] we previously wouldn't have been competing for traffic, by virtue of our relatively limited network. The other is taking advantage of Delta's strength in the United States—frequent flyer, corporate selling—to help fill up our airplanes. Both of those things are great opportunities for us.
We want to make sure that we work together effectively to make the experience of flying across our airlines as seamless as possible, like trying to collocate in terminals where we can. We're in the same terminal in New York JFK, and we've recently collocated our check-in facility. We're collocated at London Heathrow. Most Delta departures are in the same terminal as Virgin Atlantic, and we intend to move the rest in there eventually. There are people who prefer the Virgin Atlantic airplane. Having a Virgin Atlantic airplane in the mix to Atlanta will help us sell Heathrow to New Orleans, Dallas, Oklahoma City and all the various places you go to via Atlanta, or even parts of the Caribbean and Latin America.
It's a lot of new markets that we think having a mix of Delta airplanes and Virgin Atlantic airplanes will do better than just having all Delta. Delta has taken one of the Los Angeles trips, which works well, and we've taken one of the Atlanta trips. This combination of offering mixed metal in these different markets gives customers the ability to choose if they have a preference.
Richard Branson: It's already starting to have very positive effects. They're obviously a big brother with a lot of clout, and they're able to feed a lot of passengers our way. It's started really well, and we're delighted the way it's going.
Do you have any plans to join SkyTeam?
Kreeger: If we were to join an alliance, SkyTeam would be the choice. I've thought about it a lot. When I first came to the company, it seemed obvious that of course we'd join SkyTeam, but it turns out we have a lot of very good partners who are non-SkyTeam members and might not be able to keep their partnership with us if we were to join SkyTeam. It may make sense to join SkyTeam, but it will be a small benefit or small cost depending on how the analysis comes out, and as a consequence, I've put it off. It's not an urgent question for us to answer, and we have to focus on making the relationship with Delta drive value for customers and us.
That's a two- or three-year process, and we're only 10 months into it. At some point in the future, we'll take a good, hard look at SkyTeam.
What's the timeline of your plan to move to Delta's reservations system, and what advantages will that offer?
Kreeger: We're still working through the details, but realistically, it'll be a couple of years. We're on a relatively old and less-invested-in system with [Hewlett-Packard's] Shares. It's certainly been functional for us, but Delta has leapt so far ahead. If you look at their website, their mobile applications, the way in which their systems connect into those platforms, their ability to have information at the point of service delivery about their customers in a useful way for the people who serve, the ability to deal with operation disruption in a very automated and customer-friendly way, to get people where they're going as quickly as possible—those are all value-adds for us that comes from being on a system that they've really invested in.
What other routes will you add?
Kreeger: We've announced that we'll be adding Detroit, and we'll be adding Manchester to Atlanta. We've added some flights in markets were we're already doing well: New York, Los Angeles, San Francisco and Miami. We've just gone through a thorough review and built a long-term plan, and we're confident that we have planes in the right place for the short-term future, and then we'll just watch and see.
In the long term, how big do you envision the Virgin network being?
Branson: I don't necessarily think big is beautiful. What we want to do is be the best airline in the world, offering a number of routes. I'm sure there are other cities we'd love to fly to in America, but at the moment, we're slightly slot-constrained at Heathrow. If we open a new route, we have to close another route. If another runway gets built at Heathrow, there will be quite a few other cities in the States we will fly to, but that will be a bit longer down the lane.
Kreeger: We do have a leisure network to operate out of Gatwick, so leisure markets like Las Vegas or Orlando, we could see some growth to places like that. We've been flying from Glasgow to Orlando for some time, and this summer, we're adding Glasgow to Las Vegas and Belfast to Orlando. It's very small frequencies, a couple of flights a week for several weeks. Each year, we've found we can add to those services to give us growth from other parts of the U.K. where we won't be as constrained by slots.
What's the latest on Virgin Hotels?
Branson: Our Chicago hotel will be first to open, and that's very nearly there now. We have New York, New Orleans and San Francisco, so over the next 18 months, we have quite a few hotels we're opening, and Chicago will be our showoff hotel.
When Virgin does something new, we like to delight, and I think we'll delight people with the experience they get on hotels. The hotel I was staying in last night, I couldn't work out how to turn the lights off, how to close the doors—there are just frustrations you have in a lot of hotels, and we're trying to get all of those things right and a hell of a lot more.
After airlines and hotels, what other travel industry segments are you eyeing?
Branson: Trains and cruise ships, which is something rumored that Virgin may be building. We'll come out with some very revolutionary cruise ships that will take us about three years to build, so look forward to the inaugural cruise ship bash.