Virgin Atlantic: Air France-KLM relationship may help in improving network coverage
On 3-Oct-2017, the issue of 10% stakes in Air France-KLM toDelta Air Lines and China Eastern was completed. That now clears the way for the Franco-Dutch group to acquire 31% of Virgin Atlantic. The UK long haul airline will also benefit from the merger of its North Atlantic JV with Delta into the JV that involves Delta and Air France-KLM, subject to regulatory approval.
As Virgin looks forward to moving into the next stage of its development, this CAPA report analyses its network route by route. Virgin's network is dominated by routes across the Atlantic, which account for 83% of its seats and 23 of its 29 routes. Virgin's seat share is low at its four UK bases, the biggest being London Heathrow.
Moreover, its network is highly competitive, with only two monopoly routes and only eight where it is the number one operator by seats. British Airways competes with Virgin on 21 of its 29 routes operated in the week of 2-Oct-2017, but Virgin also faces competition from LCC Norwegian and the leisure airlines Thomas Cook and Thomson (data source: OAG).
This analysis suggests that Virgin's network looks brittle, but its new relationship with Air France-KLM may help it to spread its wings a little wider.
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