Virgin Atlantic to charge lower fuel charges for Economy class

Virgin Atlantic, one of the world’s leading long-haul airlines, has announced  that it will charge lower fuel charges from its Economy-class passengers than those travelling in the premium classes.The British airline Virgin Atlantic Airways Limited is owned by Richard Branson’s Virgin Group (51%) and Singapore Airlines (49%). It operates long-haul routes between the United Kingdom and North America, the Caribbean, Africa, the Middle East, Asia, and Australia from its main bases at London’s Heathrow Airport and London’s Gatwick Airport.

Virgin Atlantic’s long-haul sectors are: London to Los Angeles, San Francisco, Las Vegas, Tokyo, Shanghai, Sydney, Mauritius, Johannesburg, Cape Town, and Hong Kong.

Steve Ridgway, chief executive of officer of Virgin Atlantic, said in a statement: “With jet fuel prices now at levels that challenge the very nature and structure of the entire airline industry, we have decided to levy fuel charges depending on where you sit in the plane. Our Upper Class and Premium Economy passengers benefit from considerably more space on our aircraft and larger baggage allowances than our Economy passengers, so our aircraft burn more fuel to carry them.”

“We believe, Ridgway added, “that Economy-class passengers should pay lower fuel charges than passengers in our two premium cabins as their carbon footprint is around half of those seated towards the front of the plane.”

With effect from May 30, 2008, fuel charges per sector applicable to all new bookings on Virgin Atlantic sold in the United Kingdom had gone up as follows:

* Economy class:  £2.50 on shorter sectors (to ££5.50) and £4.50 on longer sectors (to £83.50).
* Premium Economy class: £12.50 on shorter sectors (to £75.50) and £16.50 (to £95.50) on longer sectors.
* Upper Class: £22.50 on shorter sectors (to £85.50) and £28.50 (to £107.50) on longer sectors.

Meanwhile, the British media has reported that Virgin Atlantic claims its sales are rising, with passenger numbers rising 6% in May 2008. The carrier’s premium sales in May 2008 were up by 10% for the second month in a row.

Virgin Atlantic has also announced that it is hiring 100 additional cabin crew as it adds an extra flight to its daily London-to-Hong Kong service.

In a press release, Paul Charles, Virgin Atlantic’s director of communications, said: “The carrier is seeing strong sales on services to the Caribbean and the United States despite a downturn in consumer confidence and rising fuel surcharges, driven by the high oil price. There is still a massive demand to fly long haul to countries where the pound is strong and the dollar is weak, such as the Caribbean and the United States.”

Media reports say that Virgin Atlantic is financially weaker than its close rival, British Airways, on acount of the prohibitive cost of aviation fuel.

While British Airways, the national airline and flag carrier of the United Kingdom, registered a profit margin of 10% in 2007 and record pre-tax profits of £883 million, Virgin Atlantic is yet to publish its results for the 2007-08 financial year.

Virgin Atlantic, say analysts, is expected to avoid a loss despite having earned a profit of just £6.6 million in 2007 – till February 2007 – when the airline market was nearing its peak.

Richard Branson’s Virgin empire, according to analysts, is now under immense financial pressure as the credit crunch and record-high costs of fuel have combined to take their toll on most of his businesses.

Richard Branson, who was ranked by Forbes magazine in 2007 as the world’s 236th richest person – with a personal fortune estimated at nearly US $8 billion – is  reportedly facing financial setbacks in his key markets – the United Kingdom, the United States and Australia.

Airline businesses, including the international carrier Virgin Atlantic and the Australian domestic airline operator Virgin Blue, constitute Branson’s main ventures.