Virgin Atlantic believes corporate business could return to
pre-pandemic levels in 2024 and reports that small and medium-sized
organisations are spearheading the return to travel.
Speaking at the Business Travel Association conference in
Liverpool this week, the airline’s chief commercial officer Juha Jarvinen said:
“It will be two to three years until we see full recovery for corporates. We’re
expecting it to be 30 per cent down in 2022 [compared to 2019] and 20 per cent
down in 2023. That’s our forecast. We do believe it will return to 2019 levels
but most likely not until 2024.”
He continued: “It’s SMEs that are coming back first. They’re
agile and need to get deals done. Larger corporates will be later and internal
meetings travel will be last of all. Travel will be rationalised – people will
invest in long-haul travel and put more meetings together.”
TMC business usually accounts for 40 per cent of Virgin’s
passenger revenue but is currently around 15 per cent, said Jarvinen, who explained
the airline had been preparing for a comprehensive upscaling of its services
early in 2022.
The announcement on Monday this week that the United States
will open up to European citizens in November took many in the industry by
surprise. The airline said bookings to the US – which traditionally accounts
for 70 per cent of its network capacity – rocketed 600 per cent overnight
following the announcement. New York was the most-booked destination and
premium economy the most popular cabin.
“We had been planning for January so now we have to get
pilots and cabin crew back and reactivate aircraft – that doesn’t happen
overnight,” said Jarvinen.
“We believe 2022 will be a major year for travel and we have
a new aircraft type coming [A330-900s] with new cabins across all three
classes.”
Discussing the airline’s experience of the pandemic,
Jarvinen bemoaned the UK government’s lack of support, claiming it “gave the
least support [to airlines] of any European government. They take it for
granted that aviation will survive. It means we’re now playing catch-up with
the rest of Europe.”
He continued: “The most challenging thing was letting almost
half of our staff (44 per cent) go… we’re much more lean now. We had three
months where we didn’t carry any passengers – it was 100 per cent cargo.”
By autumn 2020, passenger load factors had reached 20 per
cent of 2019 volumes.
Addressing the airline’s NDC progress, Jarvinen said: “We
believe in omnichannel distribution. We are behind on our NDC roadmap but we
are aiming for NDC at scale by the end of 2023. It doesn’t mean we leave the
GDS but we do believe it’s a viable alternative for some partners.”