Virgin Atlantic CEO Steve Ridgeway stated that "there are no deals on the table” regarding a takeover or change in ownership of the carrier (Dow Jones Newswires, 15-Jun-2011). Virgin Atlantic hired Deutsche Bank in 2010 to look at growth opportunities and assess its financial environment, which could lead to an equity restructuring of the airline. Mr Ridgway said that he's confident that "even if nothing happens, we can continue to grow". He would not comment on whether Etihad Airways or Delta Air Lines, both of which have voiced an interest in the carrier, would be a better fit for Virgin Atlantic. The CEO said the two main options are either aligning itself with an alliance or equity-ownership restructuring.
No deal on the table for Virgin Atlantic: CEO
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Airline disruption: it will happen in the next decade - but no one is preparing for it
Why so unprepared? It seems inconceivable that the structure of an industry with so many artificial constraints can remain intact much past 70 years, while all around it has changed.
This decade alone has been witness to major disruptions in the travel and transportation industries. Most prominent have been in ride sharing – Uber – and in hospitality – Airbnb. Telecommunications, media and music industries have also been turned on their heads; banks and payments are in the firing line; retail generally is being rapidly transformed. There is scarcely an industry whose fundamental structure remains intact. Except the airline industry.
In all cases disrespectful startups, usually applying relatively simple but sophisticated IT solutions, have taken on legacy operations. The legacy industries under attack typically involve extensive capital investment, and are often characterised by significant, unhelpful, and highly intrusive government regulation that restricts competition.
Certainly the legacy airlines have had to deal with a new breed of low cost operations, long and short haul. But almost without exception those legacy operators are still there, fundamentally unchanged.
In terms of other industries, this is no more than fiddling around the margins. And time is running out.
United Airlines stresses that capacity adds are accretive as 2Q2017 unit revenues turn positive
United Airlines expects to attain a positive passenger unit revenue performance in 2Q2017, which would mark the first positive result for the airline in that metric since early 2015. The airline’s PRASM results in 1Q2017 were in line with its initial forecast, which was more conservative than those of its larger US rivals. American and Delta refined their 1Q2017 unit revenue forecast downward, while United kept its guidance intact, and its performance fell within its initial estimates.
The airline’s 2Q2017 positive unit revenue outlook is driven by many factors, including a shift in its management of close in bookings to reduce reliance on advance purchase discounts. Latin America and the US domestic market continue to be bright spots for United, while declines in Pacific unit revenue continue to moderate. United’s better than expected unit revenue performance in trans-Atlantic markets in 1Q2017 should moderate as point of sale tilts more toward Europe later in the year.
Markets seem still to be digesting United’s decision to increase its planned 2017 capacity growth by 1.5ppt. United is stressing that much of the growth is driven by increased gauge, and the growth is designed to restore United to its natural share in the US domestic market.