Is Virgin Going To Live Up To Its Promised Hype?

Is Virgin Atlantic Airlines on course with its July launch in India? This is the question that is uppermost on the minds of frequent flyers hoping to cash in on the airline's low pricing strategy with which it has entered new markets worldwide. "We have already hired the cabin crew and will be in position to make an announcement in two weeks time, by which time we hope to have all the things sorted out," says Richa Goyal, head of marketing, Stic Travels, which is bringing in the carrier.

Partner Air India with whom Virgin is riding into India is equally positive. "All the bottlenecks are sorted out and as far as we are concerned, the deal is definitely on," says the AI spokesperson firmly. However, AI concedes it has received no schedules from Virgin as yet.

 

In fact, travel agents and those in the airline trade are troubled by this. "If, as promised, they are coming in July, then we should have got the schedules by now _ indeed, it's already far too late," says a travel agent. Besides which, most are questioning the logic of a launch in July when the peak season rush would be over. Another travel agent says that passengers eager to avail of the promised cheap ticket (Virgin chairman Richard Branson had talked about a 30 per cent difference in economy fares) have been ringing up enquiring about the schedules.

May and June are the peak season and this year is no different with all flights out of India crammed to capacity. BA has daily flights out of Delhi, Mumbai, Chennai and Calcutta, and all seats are apparently booked until June-end. "This year has been particularly bad," says one observer.

In fact, so high is the demand for the Delhi-London leg (the sector that Virgin will most probably be operating on) that all the airlines that had announced a fare cut in the months following Virgin's entry announcement have withdrawn it. British Airways had especially shaken the market with an aggressive pricing strategy in April. Air India followed suit, announcing special `excursion fares'. Others such as Scandinavian Airlines too announced cuts. But in May, most players have revised fares again, with the Maharjah hiking fares dramatically too.

Could the withdrawals of the discounts also be because the airlines are now no longer fearing Virgin's entry so soon? "BA always has special promotions during certain months and these were part of it," says BA's Raina Sequeira, adding that "We welcome competition. We have dealt with Virgin in other territories including our home base." But BA has begun to gear for Virgin's entry by announcing withdrawal from Calcutta and making all its 14 flights to India turnarounds from Delhi. According to other sources, BA has little reason to worry because Virgin does not have a daily service and so even its price advantage will fail to lure the business traveller on a flexible schedule.

Virgin will be starting with two flights a week and go up to the proposed three after a few months of operation, operating on those days when AI has no flight on the sector. These will be Boeing 747s and the pilots will be from home base UK. However, 15 cabin crew members have been hired from India. The code-sharing arrangement between the two will translate into earnings of Rs 30 crore yearly for AI. AI will earn revenues for 64 seats on every Virgin flight between India and the UK..