Speaking of fuel, there has been a lot of talk about the continuing low oil prices. We have reacted to this at Virgin Atlantic providing our customers with the most competitive price possible to go along with the best service and experience we always strive for.
Although we buy our fuel months and often years in advance, and so the recent oil price falls have not had an immediate impact on costs, we have decided to lower our fuel charge by £20 per return journey for customers. Overall, our prices have reduced by £70 per trip per person since fuel prices began to fall in 2014.
The oil price has collapsed, not because of a global recession, but because there is more supply than demand. I believe we are looking at a world with relatively low fuel prices for some time to come. This will be beneficial not just for airlines, but also for consumers, who will find the cost of petrol, gas and food should remain low.
We must not be complacent though and while the fuel price is low, it is even more important for companies to invest in the future by funding the development of alternative fuels. This will create an even bigger surplus of supply, prolonging the era of cheap fuel and most importantly helping us meet the targets set out at COP21 in Paris last year.
There has also been lots of debate in Davos about the impact of the recent slowdown in China on the global economy. I see this as a correction with the fundamentals still there for growth in countries like America and Britain. Indeed America and Europe are not that dependent on Chinese consumption. I believe the slowdown China is experiencing won’t have a huge effect on the whole world. There will continue to be competitive markets, with those companies who adapt and innovate winning out and other less smart businesses struggling. This has always been the case. It is very easy to be overly negative about the current state of the world and to see dangers around every corner.
As well as thinking about the economy, I’m really enjoying discussing everything from the war on drugs to sustainability. Nowhere was this better illustrated than in a fascinating hour with Vice President Joe Biden, where he shared his concerns over creating a stable Middle East, the need to create more jobs in America, invest in the fuels of future and ensure the next generation have real opportunities to create a better world. As we left, he smiled and said: “There is a lot to do, but in my business, you need to be an optimist.”
With the Vice President’s words ringing me in ears, I am eager to spread the message of business as a force for good and that we can create real change. Indeed it was great to see the Global Commission on Business and Sustainable Development launch in Davos. Created by B Team member and Unilever CEO Paul Polman and former UN Deputy SG Mark Malloch Brown, the Commission has been created to show why it makes sense for business to engage on sustainable development at a far more strategic level than it has to date. Leaders are beginning to realise that new business models can align profitability with social purpose, and this will become the norm in the years to come.
I look forward to revisiting Davos when alternative fuels and sustainable businesses are at the top of the agenda, and at the forefront of the global economy.