Virgin Atlantic recently celebrated the 40th anniversary of its first flight. Since its inception, the company has endured more than its fair share of growing pains, financial challenges and underhanded tactics from its biggest competitors. Today, it is one of Britain’s national airlines with an instantly recognisable livery and is known for its innovative approach. But how did Virgin Atlantic come about?
Photo: Ceri Breeze | Shutterstock
A missed flight and a brilliant idea
According to Sir Richard Branson, the company’s founder, it all started when a flight he had booked was cancelled at the last minute. Branson then chartered a plane and sold tickets to all the passengers who had been turned away. And he says that got him thinking.
“That led to a big ‘what if…’ moment. I was traveling a lot, seeing bands, signing them and doing deals (for Virgin Records). Traveling by plane was not fun. It was awful. The tickets were expensive, the service was terrible, the food was even worse and there was no competition pushing the airlines to do something about it. I realized there was a gap in the market. What if we did something different and gave passengers a great experience?”
The opportunity to “do something different” would arise much sooner than expected.
Photo: Bradley Caslin | Shutterstock
A gap in the market
Laker Airways pioneered low-cost cross-Atlantic flights in the late 1970s with its McDonnell Douglas DC-10 Skytrains. But in 1982, the airline collapsed under the weight of more than $300 million in debt. The airline’s former chief pilot, Captain Alan Hellary, then proposed the concept of a new, all-economy airline called British Atlantic Airways to fill the gap in the market and sought investors.
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Branson heard about it and agreed to fund the company on the condition that it would be called Virgin Atlantic Airways instead. He also wisely sought the advice of former Laker Airways founder Sir Freddie Laker and received two pieces of important advice. The first was that an all-economy model was far more risky. Branson took this advice to heart, as Virgin Atlantic would later pioneer the three-class model.
The second piece of advice was that British Airways (BA) would pounce on the new competitor, just as it had done with Lakers Airways, and should be prepared to “sue the bastards!” These words would prove to be very prophetic.
Photo: Virgin Group
Purchase of an aircraft
In February 1984, Branson, Hellary and Fields announced the launch of Virgin Atlantic at a press conference. Now the race began to get a plane in time for the busy summer season. Branson remembers the first negotiations with Boeing:
“I was on the phone with Boeing and they were amused when an Englishman from the music industry asked what offers there were for a jumbo jet. They told me that Boeing had leased planes and a used jumbo that they would seriously take back after a year if it didn’t work out.”
Virgin Atlantic’s first aircraft was a used Boeing 747-200 (registration G-VIRG) originally delivered to Aerolineas Argentina. It was named Maiden Voyager and given the now familiar Virgin Atlantic livery in preparation for its launch in June 1984. Although acquired on a one-year lease, it ultimately remained in Virgin Atlantic’s fleet until the early 2000s, given the uncertainty surrounding the launch of a new airline.
Photo: Virgin Group
Setting up processes
The establishment of operations to support the young airline was also underway at full speed. Aside from what Branson describes as “endless waves” of legal, financial and licensing issues, the airline made several important decisions in these early days:
- Base: Since London’s Air Traffic Distribution Rules (TDRs) prohibited operations from London Heathrow (LHR), it was decided to offer flights to Newark (EWR) from London Gatwick (LGW).
- Booking: The airline set up a ticketing system in record time, which included the innovative approach of selling tickets through its trendy Virgin Record stores.
- Aircraft configuration: Some highly innovative decisions in these early days led to Virgin Atlantic becoming the first airline to equip its aircraft with a 3-class layout, which also included Premium Economy, and to introduce screens in the backs of the seats for entertainment.
- Maintenance: Since it was only a single aircraft, the maintenance requirements were not excessive, but Virgin Atlantic commissioned its competitor British Caledonian to maintain the aircraft.
- Marketing: Virgin Atlantic used Branson’s flamboyant personality to great effect, receiving a lot of free PR through his interviews and publicity stunts, which was crucial in increasing the new airline’s visibility.
Photo: Virgin
On 22 June 1984, Virgin Atlantic Airways flight VS1 departed LGW for EWR, the airline’s first flight. On board were Virgin Group staff, numerous celebrities and media representatives, and 70 cases of champagne for what was described as “an eight-hour party in the sky”.
The fight for survival
The airline was profitable in its first year and quickly began acquiring additional Boeing 747s to operate scheduled services to Miami (MIA), New York (JFK), Tokyo Narita (NRT), Los Angeles (LAX), Boston (BOS) and Orlando (MCO). The big expansion point, however, came in 1991 when Virgin Atlantic was permitted to operate from London Heathrow following the abolition of TDRs. Apart from allowing the UK Civil Aviation Authority to enter one of the largest global aviation markets, it also transferred two pairs of unused landing slots that BA held at Tokyo Narita to Virgin Atlantic.
Photo: Virgin Group
This put Virgin Atlantic firmly in BA’s crosshairs, which sparked the so-called “Dirty Tricks” scandal. The company carried out several activities, including:
- Attempt to hack Virgin Atlantic’s systems to gain access to insider information about flights.
- They access passenger data, pose as Virgin Atlantic employees and call their customers to persuade them to switch to BA by offering upgrades or by claiming that Virgin Atlantic flights have been cancelled.
- Publishing a dossier containing false claims about Virgin Atlantic’s business in order to spread negative stories in the press.
- Hiring private investigators to search through the trash cans of Virgin Atlantic employees and journalists who had spoken to Branson.
Photo: Craig Russell | Shutterstock
Branson sued BA in the High Court for defamation, and when details of the nefarious activities came to light, BA decided to settle the case. It was ordered to issue a public apology and pay Virgin Atlantic over $5.5 million in fines and legal fees, which was then the largest settlement for defamation in British legal history. Branson distributed the money to Virgin Atlantic employees as a “BA bonus”.
From strength to strength
Virgin Atlantic emerged from these early years stronger and grew steadily. Singapore Airlines acquired a 49 percent stake in the airline, which was bought by Delta Air Lines in 2012. The two airlines formed a joint venture partnership and Virgin Atlantic eventually joined the Sky Team Alliance.
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Virgin Atlantic also replaced its Boeing 747-200s with newer Boeing 747-400s and Airbus A340s in the 2000s, and later with more efficient twin-jets. Today, the airline flies to 32 destinations with a fleet of 44 aircraft consisting of Airbus A350-1000s, A330-300s and -900s, and Boeing 787-9s.
