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Virgin makes grand entrance into Indian skies

Our Delhi Bureau

Virgin Atlantic Airways inaugurated its new twice-weekly London-Delhi service on Thursday.

Flying down on the maiden Virgin Atlantic London Heathrow-New Delhi flight, Sir Richard Branson descended from the aircraft dressed in Indian livery, complete with a huge turban to match. The colour, of course, was the staple Virgin red colour.

The theme was India, so much so that the drive from the airport to the city for his press conference was in bright red (so red that it hurt the eye) Ambassador, the car that still defines Indian automobiles. Even the mighty Mercedes Benz had to play second fiddle and carried only the officials who too had come aboard the Virgin Atlantic flight.

At the press conference, Branson began by thanking the Indian government and Air-India for having the flight sharing arrangement that had allowed Virgin Atlantic to begin its India operations. Virgin Atlantic will be operating two flights on the London-Delhi route.

Asked if he would be interested in buying a stake in Air-India, which the government of India has announced will be privatised, he said it was too early to speak now. "Today we have just come into India and it is too soon to talk about buying a stake in Air-India. We are still waiting for the merchant bankers to look at the issue and once they have done that we certainly will take a close look at Air-India," he announced.

"When you have more competition, then you can expect greater price competitiveness," said Branson, after disembarking from the Virgin Boeing 747-400 at Indira Gandhi international airport.

The British billionaire said the twice-weekly service would be upgraded to three flights a week by the end of the year.

"Our eventual aim is for daily flights," he said.

As the Virgin plane touched down and taxied to the terminal, Branson's head and shoulders appeared through the emergency hatch at the top of the cockpit, waving a large Indian flag.

Branson was dressed for the occasion in a purple turban and a long, red traditional Indian robe, or kurta, and did an impromptu jig on the steps of the plane for waiting cameramen.

Virgin's arrival in Indian skies has set the stage for another tough battle with arch rival British Airways over the subcontinent.

Virgin's ticket price on the London-Delhi-London route is Rs 29,999 ($698), a special introductory offer for two months. Air-India's ticket price on the same route is Rs 41,000.

"We are going to work very closely with Air-India," said Branson, who was met at the airport by the Indian national carrier's managing director Michael Mascarenhas.

Virgin Atlantic will initially make use of Air-India's unutilised route entitlements between India and Britain, as part of a pact signed earlier this year.

Indian Aviation Minister Sharad Yadav, who met Branson at the airport, said the agreement between Virgin Atlantic and Air-India would earn the Indian carrier Rs 150 million annually.

A Virgin Atlantic spokesman said that Branson would leave India on Saturday and head to Australia to launch a new domestic airline there called Virgin Blue.

Virgin has also entered into an arrangement with Singapore Airlines and he agreed that even Singapore Airlines might have an interest in acquiring a stake in Air-India. He, however, added that it was too soon to debate the subject at this juncture.

Branson also said that there have been attempts to prevent this alliance between Virgin and Air-India from taking place. He pointed to the recent fare cut announced by British Airways on the high capacity Delhi-London route. British Airways has offered a few seats on the Delhi-London route for as little as Rs 27,000. By comparison, Virgin's lowest ticket is priced at Rs 32,700.

Branson said that his company would appeal to the government to be allowed to offer cheaper tickets. "Even though one of your ministers said that he did not want to see price war with different airlines undercutting each other, we will seek approval to cut our price to match BA," said Branson.

He pointed out that since the price market in India was regulated, the final decision on the price rests with Air-India and the government. "Naturally, we will appeal but we are not in a position to say what will happen," said Branson.

He added that Virgin might cut the price on the London-Delhi route.

"Regarding cutting our price, naturally once the Indian market is deregulated and Air-India privatised, then we will be free to undercut our rivals and certainly we will do that. But all this is a few years away," he said.

The chief of Virgin disagreed with the analogy of Tower Air, which, a few years ago, had undercut prices on the India-United States route and in the bargain suffered massive losses, forcing them to pull out. "The fact is that the Delhi-London sector is underutilised. There is potential for more flights on that route and thus there is tremendous space for more flights daily," he said.

He said that his Indian friends in the United Kingdom would often complain about the lack of direct flights to India, which would force them to make stopovers in various cities across the world.

Branson, however, insisted that Virgin's USP was its high quality at extremely competitive prices. It was not just undercutting its rivals. "We offer facilities in our business class that other airlines offer on the first class. We pamper our passengers with offers such as on-board massage and the like, so that at the same price they are getting much more and hence prefer our airline," he said.

He added that Virgin was looking at the still-on-the-drawing-board A3XXX, a supersize aircraft being planned by Airbus Industrie that will be capable of carrying over 600 passengers and offer facilities unmatched in aviation history.

"On such an aircraft, we'd like to put private bedrooms, have a workout room, a kids' playroom, even shower facilities. The only thing we may not be able to have is a jacuzzi," he said amid laughter.

Asked if Virgin was keen to increase the number of flights to India and to introduce flights to other sectors, he replied in the positive. "We would love to have more flights to Britain, and not just from Delhi but also from Bombay, Calcutta and other Indian cities. And we would love to have flights from India to other countries," he declared.

The problem, however, was that Virgin Atlantic does not have permission to fly to India on its own licence but has a licence-sharing arrangement with Air-India. "Naturally, whether we can increase our number of flights to a flights daily will depend on whether Air-India is able to give us more space," he said.

Branson insisted that the arrangement with Air-India was not to the detriment of the latter, as had been claimed by some newspapers. "Air-India stands to make a lot of money on this deal, which is in the range of Rs 400 million annually. Moreover, Air-India can place its passengers on our flights but not vice-versa," he said, adding, "The deal is beneficial to Air-India," he said.

The chairman of the Virgin group added that he was interested in investing in India and was looking at hotels and health clubs for starters. "The small cities of India don't have good hotels, a reason why many tourists are put off since outside Delhi there is no place to stay. And there are no health clubs of the kind that Virgin has built, so there is scope for it in India," he said.

Branson also came down heavily on global alliances, saying it was against consumer interests. "We don't have any plan for any global alliance," he said.

Meanwhile, British Telecom has announced that in a tie-up with Virgin Atlantic, a person having a global satellite mobile could make and receive calls on board an in-flight Virgin Atlantic aircraft. "It is another first from our side to provide the best care to our passengers," said Branson.

Additional inputs: Agencies

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