Tuesday, October 23, 2007

Virgin Atlantic

Virgin Atlantic has informed the media that is seeking to place a large order worth nearly US$ 3 billion with Boeing or Airbus for 10 ultra large aircraft for which the airline has shortlisted the B 747-800 and the A 380. VS mentions that these new aircraft will be used as a direct replacement for its eight B 747-400s (leisure configuration) which are based at LGW -London Gatwick Airport. The order is expected to be announced by May 2008.
Virgin's order for six A380s in 2000 was stalled last October after construction delays at Airbus. The company remains committed to the purchase and the aircraft will be delivered after 2013.

Analysis :

FYI...VS's LGW based B 744s accomodate between 386 and 451 passengers and currently fly to vacation destinations including Las Vegas, Orlando, Barbados, Cuba, Antigua and Jamaica.

This order will witness an interesting battle between Boeing and Airbus as the former needs more "blue chip" airlines (besides LH) to order the B 748 in order to gain confidence in the commercial market. Airbus too needs the VS order to add up to its earlier commitment for 6 A 380s because it needs more than 300 ordered to cover the development costs to break even on the project.

It is also interesting to note that VS has now become an "environmentally friendly" airline which it attributed to its large order for Boeing 787s few months ago. Flying 2 engine airplanes harms the environment less than 4 engine ones and with Virgin Blue of Australia ordering 6 Boeing 777-300ERs, its parent company should also look at this aircraft type to replace the LGW based B 744 fleet. The B 773ER can easily seat between 380-430 pax in VS's 3 class layout (J + P + Y), can fly to all of its leisure market routes nonstop from LGW by having up to 25% less operating costs + can carry the same amount of cargo in the belly. Lastly, the B 773ER is cheaper to purchase than the B 748 / A 380 and can also be used in the future as a direct replacement for VS's A 340-600 fleet as the latter's operating costs on long haul flights is higher than the B 773ER!

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