04 May 2020
Posted in Travel & Tourism
Virgin Atlantic’s plea for survival should act as stark warning for competitors
Richard Branson’s recent plea for help highlights the current state of the airline industry, says GlobalData, a leading data and analytics company.
Rheanna Norris, Associate Analyst at GlobalData, comments: “There is a possibility that the Virgin brand could disappear from the global aviation industry altogether. Virgin Australia is in voluntary administration, the rebranding of UK airline Flybe to Virgin Connect was cancelled for obvious reasons, and now, Virgin Atlantic is asking for help.
“Rival British Airways consumes the majority of the market for full-service carriers in the UK and would be the most likely beneficiary of any change to Virgin Atlantic’s operating circumstances, this factor could lead to a rise in fares on transatlantic routes from the UK as the airline controls more of the supply.
“Major shareholder Delta has ruled out any further financial aid due to EU law and the conditions of its own US Government bailout. However, Delta does not plan on amending its current investment. With its first loss reported in five years, it is right to prioritize its own financial position first.
“This should be a warning for the industry, with projections that it could take two to three years to recover, this will not be the first – or last – airline to go under due to COVID-19.”