Pointing out that India is the second largest market for his airline after the US, Kreeger said the airline is exploring plans to start expanding to new Indian cities after getting fuel-efficient airplanes. Edited excerpts:
Which is the bigger brand—Virgin Atlantic or Richard Branson?
I don’t think you can separate them. I think Richard has brought a separate ethos to the company. Part of it is around things like taking up a new initiative and focusing on the environment and part of it is on, a certain personality and style of the company that is adventurous, sense of humour, sense of fun around travel and innovation and new ways to try to make the customers’ lives better. They both are very strong brands and are so interlinked that I am very thrilled to be associated with both of them.
When will we see you expand your network to include more India cities?
So what’s your India growth strategy?
We currently have two flights from India to the UK, and that makes India a significant piece for us. We fly to Delhi and Mumbai daily all year round. So while growing our presence here in India, we have also done two other things that offer a broader network to customers who live here. The first is our relationship with Delta Air Lines (Inc.) which will offer more places in the US to connect via Heathrow to customers originating in India, with a potential stopover in the UK. The second is that we launched Little Red, our domestic airline (in the UK) in April and that includes three destinations that connect very well from our Indian flights—Aberdeen, Edinburgh and Manchester.
How significant is the Delta-Virgin joint venture for your airline?
I think it is a gigantic game changer for us. When I was contemplating on joining Virgin Atlantic, I didn’t know it was in talks with Delta. Virgin Atlantic will get two fundamental things from our relationship with Delta. The first is new destinations for our UK-based customers and our customers east of the UK like here in India. This will allow us to compete more effectively with other airlines in UK or through the UK. Point two and equally important is that Delta has a lot of flyers in the US. We are not as big in the US as the US carriers. We are not as effective as Delta in creating loyalty in the US. So when the Delta customers experience our service, that will be a wonderful combination and will drive a lot of US customers to our flights, both to London and through London to places like here in India.
Do you plan to invest in any Indian carrier, given that you will soon have competition from the Eithad-Jet combine via Abu Dhabi?
India is our second largest market behind the US, and having non-stop services between India and the UK is a big competitive tool for us. We compete virtually on the fact that we fly directly to London. Not just that, but we have great connections to the US. Mumbai, in particular, connects well to number of markets in the US. And we think if you combine our connectivity in our network via London, with the desire of the fliers to either go to London or stop in London as a part of their itinerary, that’s a great opportunity for us.
Our company has gone through a couple of years of difficult financial performance, and we have embarked on a turnaround plan that may take a couple of years. At the moment, we are not in a position to consider investing in any of the carriers in the Indian market or otherwise. That said, I am a big believer in the free flow of capital as well as the free flow of people, and at some point of time in the future, growth in India and investment in India both become better options for us.
When do you hope to turn around and how do you plan to achieve it?
I have committed to the company and the people that we will be profitable in the fiscal year that ends in February 2015. There are four key things that will help us. First has been the modest improvement in the economy. We have seen things in the UK pick up a little bit and also in the US. Second has been fuel efficiency. We have taken 10 Airbus A330s in the past couple of years that replaces much less fuel efficient airplanes like Airbus A340s. We will begin to take Boeing B787s in the next year and that will begin to replace the remainder of our A340 fleet. There is a lot of economic value in flying a fuel efficient airplane. Third has been our relationship with Delta which has increased our revenue both from the US and the UK. Besides these, increased back-office efficiency and using technology to enhance value comprise a big part in managing little things that can help in growth.
International airlines complain about high cost at Indian airports...
It is not a problem that is limited to India. We see very high charges in London Heathrow as well and in Gatwick. Maybe not quite the percentage we see here but we do see a significant increase in both charges levied on the customers and on the airlines. Our view is very simple here: the things that decrease the customers’ likelihood to travel, and therefore a connection between societies is a bad thing. And I think doing things to control the expenses at the airport, to control the costs that we pass on to the customers is absolutely essential to increase commerce between India and the UK.