Randolph Fields, an American-born lawyer, and Alan Hellary, a former chief pilot for Laker Airways, set up British Atlantic Airways as a successor to Laker Airways. Fields got the idea of an airline from London to the Falkland Islands in June 1982, when the Falklands War had just finished and there was need for a service. Fields needed expertise and contacted Alan Hellary, Laker Airways' former chief pilot, who had thought about establishing a regular, commercial service to the Falklands at the same time. Hellary was in contact with colleagues out of work following the collapse of Laker Airways and they worked on the idea.
However the short runway at Port Stanley Airport and the time to improve it made the scheme unviable, so the idea of the Falklands service was dropped. Instead, Hellary and Fields tried to secure a licence from Gatwick to John F. Kennedy International Airport in New York City. A three-day inquiry in May 1983 rejected it after British Airways, British Caledonian and BAA objected.
Hellary and Fields then applied for a licence between Gatwick and Newark Liberty International Airport. It was planned that British Atlantic Airways would use a 380-seat DC-10 to fly to Newark. However, faced with the prospect of direct competition from People Express, a post-deregulation "no frills" discount airline at Newark, they decided to secure more funding before proceeding.
Fields met Richard Branson at a party in Central London during which he proposed a business partnership. After protracted and testy negotiations, Fields agreed to a reduced stake of 25% in the airline (renamed Virgin Atlantic) and became first chairman. Following disagreements over operations, Fields agreed to be bought out for an initial sum of £1 million with further payment on Virgin's first dividend. As a result of a High Court action, this additional payment was received shortly before Fields' death from cancer in 1997.
Formative years
On 22 June 1984 Virgin Atlantic operated its inaugural scheduled service between Gatwick and Newark using a leased Boeing 747-200 (G-VIRG), dubbed Maiden Voyager, formerly operated by Aerolíneas Argentinas. Part of Richard Branson's approach to business is to succeed within the first year or exit the market. This includes a one-year limit on everything associated with starting up. Virgin Atlantic became profitable during the first 12 months, aided by sister company Virgin Records' ability to finance the lease of a secondhand Boeing 747.
The firm timed operations to take advantage of a full summer, which included June to September – the most profitable period for most airlines
In 1986, the airline added another Boeing 747 and started a scheduled route from Gatwick to Miami. Additional aircraft were acquired and routes launched from Gatwick to New York-JFK (1988), Tokyo (1989), Los Angeles (1990), Boston (1991), and Orlando (1992). In 1987 a service was launched between Luton and Dublin using Viscount turbo-prop aircraft, but this was withdrawn around 1990. In 1988, Club Air operated two Boeing 727 aircraft on behalf of Virgin. They were leased from Eastern Airlines to also serve the Luton to Dublin route. These were withdrawn around 1990 too.
Later years
Boeing 747-400 landing
In March 2000 Virgin Group sold 49% of the airline's holding company to Singapore Airlines for £600.25 million. Virgin Group still owns the remaining 51%.
In June 2002, Virgin Atlantic became the first airline to use the Airbus A340-600.
In 2003 Virgin Atlantic carried 3.8 million passengers. This increased to 4.6 million in 2006, placing them seventh among UK airlines but second in passenger-miles because of the long-haul nature of operations. During the 2012 Summer Olympics bids, Virgin Atlantic attached "London 2012" to the rear of many of their Boeing 747-400 fleet.
On 31 October 2005 Virgin Atlantic operated a humanitarian aid charter flight to the capital of Pakistan, Islamabad with 55 tonnes of aid for the affected by the earthquake in Pakistan.
Virgin volunteered a Boeing 747 for a test of biofuels. In February 2008, it flew from Heathrow to Amsterdam, with no passengers, and 20% of power for one engine provided by plant-based biofuel. The airline said it expected to use biofuels based on algae.
Company affairs and identity
Head office
"The Office", the head office building of Virgin Atlantic and Virgin Holidays in Crawley, West Sussex
Virgin Atlantic's head office, named "The Office," is located in the Business Quarter of Crawley, West Sussex, England, near London Gatwick Airport. The same building houses the corporate offices of Virgin Holidays.] Prior to the establishment of its current headquarters, Virgin Atlantic had its head office in Ashdown House on the High Street in Crawley.
Slogans
Over the years, Virgin has used many slogans, including:
- "Mine's Bigger Than Yours"
Written on the back of the Airbus A340-600s because they were the longest passenger aircraft in the world The new title of the longest passenger aircraft will be claimed by the Boeing 747-8 when it officially enters passenger service in 2011.
- "4 Engines 4 Longhaul"
Originally an Airbus slogan when newer versions of the A340 were built until Virgin inherited the slogan. The slogan was written on the engines of the planes, because all Virgin's planes at the time had four engines as opposed to BA's long haul twin-jet Boeing 777s and Boeing 767s. The slogan was removed in 2006 because it "had run its course and it was time to move on"—Virgin would later order Boeing 787 twin-jet aircraft in 2007, as well as the Airbus A330-300, another twinjet, in 2009.
- "No Way BA/AA"
Used in the late 1990s on several 747-400s to express Branson's displeasure with the proposed British Airways/American Airlines partnership. BA/AA combined held 100% market share on several US-UK routes (e.g. Dallas-Fort Worth to London), and a market share of more than 50% in several more (e.g. Chicago to London, JFK to London). The slogan was brought back starting in September 2008 after merger talks between British Airways, Iberia Airlines and American Airlines began.
- "Still Red Hot For 25 Years"
25th anniversary slogan for 2009.
- "Your Airline's Either Got It, Or It Hasn't "
New, re-vamped 2010 slogan, which made its first appearance on the new commercial, alongside the new logo and livery.
Others Include: "More experience than the name suggests," "Virgin, seeks travel companion(s)," "Love at first flight," "You never forget your first time," "Extra inches where it counts," "Fly a younger fleet," "One call does it all," "Hello gorgeous", "We're better by four" and, in a campaign featuring Austin Powers, "There's only one Virgin on this T-shirt (or bus, etc.) baby," and "Twice a day to London" in which Austin Powers is seen riding on the fuselage of a Virgin Atlantic 747. During that time G-VTOP was temporarily named "Austin Powered".
Rivalry with British Airways
Virgin Atlantic has been a rival of British Airways since inception, as previously British Airways had been the only airline from Britain serving long haul routes to destinations such as North America, the Caribbean and the Far East.
Opening up of Heathrow
Virgin Atlantic A340-600 G-VGAS at full throttle as it prepares to take off from Sydney Airport
In January 1991, the UK opened Heathrow Airport to Virgin when it abolished the London Air Traffic Distribution Rules in response to pressure from the industry. The London Air Traffic Distribution Rules had come into effect in 1978, originally created to achieve a fairer distribution of traffic between Heathrow and Gatwick, the UK's two main international airports, to help Gatwick make a profit. The former rules stated airlines without an international scheduled service from Heathrow prior to 1 April 1977 would not be permitted operations there, instead they would have to use Gatwick. Before the abolition, airlines that did not already operate at Heathrow could commence domestic scheduled services there provided BAA, which ran both Heathrow and Gatwick on behalf of the Government, and the Secretary of State for Transport, granted permission.
The decision to open Heathrow to all newcomers in 1991 – other than those governed by Bermuda II – angered BA's chairman, Lord King, who stopped British Airways' donations to the Conservative Party in protest. Lord King was furthermore angered by the subsequent decision of the CAA to transfer two pairs of unused slots British Airways held at Tokyo's Narita International Airport to Virgin to let Virgin increase its frequency between Heathrow and Tokyo from four to six weekly round-trips, making it easier for Virgin to compete against British Airways. Lord King called the CAA's decision, which the Government had endorsed, "a confiscation of his company's property".
Precarious financial position during early 1990s
According to industry insiders, Virgin Atlantic had increasing financial problems. This was primarily the result of a reduction in demand for travel caused by the recession of the early 1990s as well as by fear to travel in the aftermath of the first Gulf War. Britain's Conservative Government, which had presided over the collapse of International Leisure Group (ILG) and its subsidiary Air Europe resulting in 4,000 job losses[18] was aware that Dan-Air was on the brink of bankruptcy, and wanted to avoid the collapse of another independent British airline, especially if its profile was as high as Virgin Atlantic's. The Government decided to let Virgin Atlantic into Heathrow despite facing opposition from British Airways.
"Dirty tricks" controversy
The decision to abolish the London Air Traffic Distribution Rules and to let Virgin Atlantic operate at Heathrow in competition with British Airways became the trigger for BA's so-called "dirty tricks" campaign against Virgin. In 1993 BA's PR director, David Burnside, published an article in "BA News", British Airways' internal magazine, which argued that Branson's protests against British Airways were a publicity stunt. Branson sued British Airways for libel, using the services of George Carman QC. BA settled out of court when its lawyers found the lengths to which the company went to try to kill off Virgin. BA had a legal bill of up to £3m, damages to Branson of £500,000 and a further £110,000 to his airline. Branson donated the proceeds from the case to Virgin Atlantic staff.
In the 1990s, Virgin Atlantic jets were painted with "No-Way BA/AA" in opposition to the attempted merger between British Airways and American Airlines. In 1997, following British Airways' announcement that it was to remove the Union Flag from its tailfins in favour of world images, Virgin introduced a union flag design on the winglets of its aircraft and changed the red dress on the Scarlet Lady on the nose of aircraft to the union flag with the tag line "Britain's Flag Carrier". This was a tongue-in-cheek challenge to BA's traditional role as the UK's flag carrier. Despite this BA remains the UK's flag carrier.
"Although I did not have any direct contact with BA in relation to passenger fuel surcharges, I regret that, on becoming aware of the discussions, I did not take steps to stop them."
Steve Ridgway, CEO of Virgin Atlantic
Relations with British Airways improved with the arrival of Rod Eddington as BA CEO though rivalry continued. Eddington replaced Robert Ayling, involved in the dirty tricks affair, who was dismissed by Lord Marshall, the long-serving BA chairman and Ayling's mentor, on behalf of BA's main institutional shareholders after BA had its first net loss since privatisation during Ayling's time during its 1999/2000 financial year.
In June 2006, a tip-off from Virgin Atlantic led US and UK competition authorities to investigate alleged price-fixing between Virgin Atlantic and British Airways.]
In August 2007, BA was fined £271 million by the UK's Office of Fair Trading and the US Department of Justice though this was upheld on account of a guilty plea. Virgin Atlantic was not fined as it was given immunity for reporting the cartel to regulators.
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