Virgin Atlantic Says New Entrants Across The Atlantic Will Find New York - London Heathrow a Challenging Route

Mar 03, 2008, 00:00 ET from Virgin Atlantic

    SOUTH NORWALK, Conn., March 3 /PRNewswire/ -- Virgin Atlantic, one of
 the world's leading long-haul airlines, today warned that the new entrants
 to the US-UK market will find existing Heathrow carriers are more than
 ready to do battle. The transatlantic market is already one of the most
 competitive aviation markets in the world, and more competition will open
 up when phase one of the new Open Skies Agreement comes into effect on 30
 March this year. The agreement enables US carriers to fly between European
 cities. However, European carriers aren't yet allowed to fly between two US
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     Phase one of Open Skies will automatically end if there is no progress
 on phase two, which is due to be in place by 2010. Individual EU member
 states each have the power to cause the agreement to lapse if they vote
 against the next stage, which would enable EU airlines to own and control
 US carriers.
     Lyell Strambi, Chief Operating Officer for Virgin Atlantic, said today:
     "Open Skies will not bring any sweeping overnight change, because new
 entrants to Heathrow face the same formidable task of obtaining slots that
 holds back Virgin's growth. Fares can't get much lower, as airlines are
 already offering economy tickets at their lowest levels for years."
     "Any new carrier operating on transatlantic routes will find it
 difficult to gain a toe hold. Operations into and out of Heathrow are
 challenging, as it remains one of the costliest and most congested airports
 in the world. Furthermore, airlines such as Virgin Atlantic have been
 heavily investing in facilities which speed up check-in on the ground --
 the new battleground for customers. Those carriers who enable their
 passengers to seamlessly move through the airport, through private security
 channels and rapid check-in processes, will win a greater share of the
 market compared with airlines which are unable to offer a speedy and
 efficient service. Consumers will take a flight to quality."
     "Business class capacity on the lucrative London to New York routes has
 grown over 40% in the last two years. With Open Skies starting, there's a
 real danger that there will be too much capacity for too little demand."
     "Ultimately, unless the US agrees to phase two of Open Skies, and lets
 European carriers bring better quality products to services between US
 cities, then the new entrant airlines face the prospect of Heathrow access
 being denied, as phase one will be unwound. Only a totally liberalised
 market will give consumers the power to choose the best quality at the best
     Virgin Atlantic anticipated the beginning of the Open Skies agreement
 by launching a new daily London Heathrow-Chicago service and a sixth daily
 London Heathrow-New York service. It also opened its new Terminal 3 at
 Heathrow just three months ago, providing a smooth check-in experience for
 all passengers.
For further information, please contact the Virgin Atlantic Press Office at
203.750.2570 or log onto About Virgin Atlantic -- Virgin Atlantic is one of the world's leading long-haul airlines -- It flies to 30 destinations worldwide from its main base at London Heathrow and London Gatwick -- There are 38 aircraft in its fleet, comprising 747-400s, A340-600s and A340-300s -- Sir Richard Branson is the President of Virgin Atlantic; Steve Ridgway is the Chief Executive Officer; and Lyell Strambi is the Chief Operating Officer. -- In 2007, Virgin Atlantic carried around 6 million passengers

SOURCE Virgin Atlantic