New flights to Moscow
- By Richard Branson -
- Oct 26, 2012
Many many years ago I was doing a speech in Athens, Greece. One young lad kept asking me questions. Perhaps foolishly, I kept giving him answers, perhaps foolishly, because a few years later he set up an airline in the UK after being inspired by the talk. That young man was Stelios Haji-Ioannou from easyJet.
I have always admired easyJet and until now it had never affected our business. But this changed when we went head to head to be the new carrier to fly from Britain to Moscow. The Civil Aviation Authority (CAA), in their wisdom, has decided easyJet should be the carrier rather than Virgin Atlantic. It’s not the CAA’s fault that only two UK airlines are currently allowed – under intergovernmental treaties - to fly the London to Moscow route. But it is the CAA’s responsibility to protect the best interests of consumers in these circumstances.
I don't believe this is a situation like we have just had with Virgin Trains, where the bidding process itself was completely flawed. However, we’re working our way through the detail of the decision and from our point of view it does look very strange.
The route used to be run by British Midland (BMI). When BMI was sold to British Airways, the European competition authorities said there had to be a remedy to ensure competition on routes where BA was the only UK carrier. They said they would put aside slots at Heathrow in order for another airline to operate them and compete fairly with BA. Both Virgin Atlantic and easyJet said they wanted to fly to Moscow, so we had a CAA hearing.
In the hearing, we said the vast majority of people who fly to Moscow live in the Heathrow catchment area, not the Gatwick area, which is where easyJet wants to fly from. We said we would put on an A330, which would have 125,000 more seats per year than the A320 that easyJet is planning to put on.
Atlantic explained it would be able to connect a lot of passengers onto the US and our other long-distance routes via Heathrow. The Moscow-London route is also a major cargo route and Atlantic's A330 would be able to compete with BA in the cargo market, whereas the A320 doesn't have any cargo lift. We could challenge BA with our Upper and Premium Economy offerings and, because we had 125,000 more seats a year, it is likely we would be able to match or offer lower fares than EasyJet, especially when you take into account all the essential extras that you have to pay for on easyJet but which come as standard with Virgin Atlantic.
The CAA believe by allowing a carrier at Gatwick to take the route they have opened up a new market. In our opinion that wasn't what the European competition authorities intended when they said BA had to release slots at Heathrow in order to protect competition between London and Moscow. BA is going to have huge grins on their faces tonight because they won't have any competition on cargo, business flights or Heathrow passengers.
I plan to go to Moscow next week and request that officials allow both Virgin and easyJet to fly there. That would be in the interest of the consumer. Isn't that what the CAA is supposed to protect?
By Richard Branson. Founder of Virgin Group
