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| Version | User | Scope of changes |
|---|---|---|
| Mar 16 2008, 7:16 PM EDT (current) | jimglab | 289 words added |
| Mar 16 2008, 7:15 PM EDT | jimglab |
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Branson concerend about excess capacity to London, Europe
Last year, Virgin Atlantic Airways chief Sir Richard Branson was talking enthusiastically about plans to launch an all-business-class airline between the U.S. and Europe sometime this year, after the new Open Skies agreement between the two regions took effect. But now, according to press reports from London, Virgin has quietly put that project on the back burner. Branson and other Virgin executives are said to be concerned about the financial state of the all-business-class segment following the December collapse of MAXjet Airways, and the likelihood of significant overall capacity increases across the Atlantic in the wake of the new agreement. Branson is also said to be worried that the whole OpenSkies regime could collapse after 2010 if the U.S. fails to cooperate on the second phase of the negotiations, which would be aimed at opening up greater ownership opportunities for European investors in U.S. airlines, and opening up intra-U.S. routes to European carriers. “Ultimately, unless the U.S. agrees to phase two of Open Skies, and lets European carriers bring better quality products to services between U.S. cities, then the new entrant airlines face the prospect of Heathrow access being denied, as phase one will be unwound,” said Lyell Strambi, Virgin Atlantic’s chief operating officer. As for the transatlantic all-business segment – which is still served by Eos, Silverjet and l’Avion, with plans by British Airways to start all-business flights between New York and London City Airport this year -- “business class capacity on the lucrative London to New York routes has grown over 40 percent in the last two years,” Strambi said. “With Open Skies starting, there’s a real danger that there will be too much capacity for too little demand.”
