Strong Sydney route a bright spot for Virgin

Richard Branson's Virgin Atlantic insists that strong passenger loads on its Australia-London flights are helping offset weakness in other parts of its international network due to tough economic conditions.

Richard Branson's Virgin Atlantic insists that strong passenger loads on its Australia-London flights are helping offset weakness in other parts of its international network due to tough economic conditions.

The British airline has also benefited from Qantas ditching flights between Hong Kong and London last year, as the latter consolidated its network to Europe before its alliance with Emirates.

Virgin Atlantic's former chief executive, Steve Ridgway, said the airline had experienced strong loads on its flights between Australia and London via Hong Kong over the past year due to the high dollar and resilient economy encouraging more Australians to fly.

"The route has been very good this year," he said.

Mr Ridgway stepped down as Virgin boss in February after 12 years, but was in Australia recently as part of a final tour of the airline's Asia-Pacific operations.

He said Australia was an important market for Virgin Atlantic at present because it helped to soften the impact of weaker routes elsewhere in its network.

Mr Ridgway said the global financial crisis and its aftermath had been worse for the industry than either the September 11, 2001, terrorist attacks in the US or the outbreak of severe acute respiratory syndrome in 2003, because it had lasted "longer and it is global".

"September 11 wasn't universal whereas the GFC has been universal and that's why it is good to see that there are some bright spots [such as Australia and India]," he said. "But we are based in London - we are in Europe - and the UK economy is pretty weak and we are close to euroland, which is going through its own special turmoil."

Mr Ridgway said it was difficult to judge whether the global economy was over the worst.

"It doesn't feel like it is getting worse but equally it doesn't feel like there are big bright skies ahead," he said. "We will remain very focused on controlling costs, being more efficient and changing to next-generation planes which are more [fuel] efficient."

Virgin Atlantic, which has 44 twin-aisle planes, has been flying between London and Sydney via Hong Kong since December 2004. It and British Airways are the last two major European airlines to still fly to Australia, both operating daily services.

Britain's second-largest airline is hoping a joint venture with US airline Delta on its key routes between the US and Britain will help it stem losses. The deal still needs approval from regulators on both sides of the Atlantic, which Mr Ridgway expects will take another nine months.

In December, Delta agreed to buy Singapore Airline's 49 per cent Virgin Atlantic stake for $US360 million ($345 million). Singapore Airlines bought the stake in 2000 for $US966 million. The remaining 51 per cent is owned by Sir Richard's Virgin Group.

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