Virgin Atlantic's Strategic Pivot
Its CEO eschews aviation nostalgia and romance. Instead, he's focused on profits. Also: what's the plan for Virgin Atlantic's 787 fleet?
Until 2012,1 Virgin Atlantic had a JetBlue problem. The average traveler had been brainwashed into thinking that Virgin Atlantic’s brand stood for something cool and hip, but insiders knew the truth: Virgin Atlantic had a tiny network with few partners and it flew too many aircraft types, making it uncompetitive with most global airlines.
Today, with fewer than 50 aircraft, it is still probably too small, and if the long-rumored IPO ever happens, I'm not sure I'd line up to invest. But more than a decade after Delta helped knock some sense into Virgin Atlantic after buying Singapore Airlines’ share, the airline probably is better run than ever. From what I can tell, management has a clear idea of how to squeeze the most from a limited number of aircraft. The funny thing is — and I'm sure Virgin people will not like this — the one thing that doesn't seem with the times is the airline's brand, which to me feels stuck in the 1990s and early 2000s. Perhaps that's just because I'm an American.
I'll leave the brand analysis for another newsletter. This is a post about the airline's commercial strategy and how CEO Shai Weiss is remaking Virgin Atlantic by ensuring it plays to its strengths. You may remember a newsletter I wrote that argued the airline industry needs new talent and to attract managers with fresh ideas who do not have jet fuel in their veins. Weiss, a former officer in the Israel Defense Forces who told me he did a stint buying arms for the Ministry of Defense, is one of these people. He joined Virgin Group in 2001 to work at Virgin Media, and had no airline employment experience before becoming CFO of Virgin Atlantic in 2014, a job he had until 2017, when he become chief commercial officer. He was named CEO in 2019.
Weiss is a smart guy, and he understood that Virgin Atlantic had to shift approaches for modern times. Yes, that means working as closely with Delta, which owns 49 percent of the airline, as regulators allow. But he has done other stuff, including harmonizing the fleet by jettisoning many odd-ball airplanes, cozying up to joint venture partners, and joining SkyTeam.
When I interviewed Weiss last month at a West Hollywood hotel,2 Weiss told me he knew Richard Branson wanted to build an "immensely independent and ferociously independent" airline that was capable of fighting the big players of European and American aviation. But by the time Weiss arrived in 2014, Virgin Atlantic was limping along, having lost its battle with British Airways.
Weiss is no airline romantic, so he remade the airline for a world in which size and scale matter. There was no time for nostalgia, and it was not time to pretend Virgin Atlantic was among the world’s biggest airlines.
“We're not Delta,” he said. “Delta is 100,000 people. I think it's 5,000 flights a day. We're a long-haul-only carrier with 7,500 people, so to stand on our own, I think it's a romantic view of what an airline should be.”
Let's look at what Weiss changed at Virgin Atlantic to make the airline more realistic.