Something for everyone

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The British pound may not be in the healthiest state it’s ever been, but South Africa’s rand has bounced back, meaning that whilst Virgin Atlantic is finding trading conditions at home rather tough, its South African operation is boasting record numbers. No surprise then that Country Manager Liezl Gericke was able to treat Editor Dylan Rogers to lunch in Johannesburg!

According to Gericke, a stronger rand and a weaker pound is just one of the scenarios playing their part in Virgin Atlantic’s South African office reporting significant increases in forward bookings.

But there’s no doubt that currency performance has had a huge impact. At the time of going to press, the pound was around 17% down against the dollar since last June’s Brexit referendum result, and, with Prime Minister Theresa May expected to officially notify the European Union by the end of March that the UK is leaving the EU, further currency volatility is expected.

Interestingly, though, it’s not just at the South African point-of-sale that Virgin Atlantic is seeing some big gains.

“We are seeing a massive amount of inbound travel to South Africa from the US,” says Gericke. “It’s upwards of 50% on US point-of-sale bookings into South Africa this time last year, which is contributing significantly to the success of the Johannesburg route.”

Further factors in that US increase, according to Gericke, include taking a different approach to pricing, how Virgin Atlantic deals with its key agency partners, and the activation of pricing through South Africa, onwards to regional Africa.

“Traditionally, we’ve never done that before,” says Gericke. “This was a missed opportunity, and now we’re seeing uptake from a US point-of-sale, through London, into South Africa, connecting on to Southern Africa, and we’re scooping up a lot of that business.”

Virgin Atlantic is also working closer with its online travel partners in the US – an area that is not as developed or advanced in South Africa, save for Travelstart, the dominant market player in the country.

But maybe that’s a discussion for another day, as right now Gericke and her team are celebrating a 29% increase in South African point-of-sale forward bookings on this time last year.

“The market is very buoyant, more so than it was a year or even 18 months ago,” says Gericke.

That being said, Gericke is wise enough to know that Virgin Atlantic can’t rest on its laurels.

“Aviation is tricky,” she says. “You throw a difficult oil price into the mix or you have a devaluing currency, and your outlook changes completely. It’s very much a moving landscape – one where you need to keep your finger on the pulse.”

One way that Virgin Atlantic is doing that is by investing £300-million in ‘customer experience’. The airline is already into the second year of this investment, with this year set to culminate in Virgin Atlantic’s entire fleet being equipped with wi-fi technology.

“We believe it’s become a necessity and our research has shown that the majority of people canvassed take wi-fi availability into consideration when making a decision about which airline to fly,” says Gericke.

Virgin Atlantic has also re-looked the price point on its wi-fi offering after research showed them that not everyone is interested in a full flight’s worth of it. As a result, they’ve come up with different price points to suit different needs.

“Some of the other things we’re doing – as part of the investment – include upgrading our amenity kits and the meal service on our aircraft,” says Gericke. “We’ve also refurbished the Heathrow clubhouse and opened a new clubhouse at Gatwick.”

Virgin Atlantic has always been seen as an innovative airline with a focus on positioning itself as a funky, sexy brand with a reputation as a ‘disruptor’ in the industry. But, whilst some of those descriptors remain core to the Virgin Atlantic philosophy, it’s clear that there is a desire to break that perhaps one-dimensional view.

“Previously, we weren’t known as a ‘business airline’,” says Gericke. “Now, the business traveller knows that he or she can get on board, there’s wi-fi, they can work, land in London, grab a shower in the clubhouse, and go to their meetings. It’s those things that show that we are listening to what our customers want and that we are something for everyone.”