| Journal: TWUK | Section: |
| Title: | Issue Date: 17/07/00 |
| Author: | Page Number: 20 |
| Copyright: Other |
Virgin Atlantic prepares for an Indian summer
Virgin Atlantic chairman Sir Richard Branson battles tocompete in the Indian market. Updesh Kapur reports
Making an entrance: Sir Richard arrives in Delhi to begin negotiations with Indian ministers over competitive faresVirgin Atlantic chairman Sir Richard Branson met Indian ministers last week to discuss concerns that he was not being allowed to introduce competitive fares on the London-Delhi route.
The Indian government had earlier warned that it did not want to see a fares war break out on the route, operated four times a week by Air India and daily by British Airways.
However, Virgin has been able to introduce a promotional fare for a short period, prompting similar moves by rival BA. United Airlines is set to resurrect daily services next April.
Sir Richard said he wanted Indian government approval to be competitive and expand services over the next 12 months.
After the meeting, he said: “We could generate more passengers and more competition if we had the right to be more competitive in this highly regulated market.
“We were told by the ministers that Virgin should file fares with the Indian authorities and let them decide whether they are low or not.”
Virgin began twice-weekly Boeing 747 flights on the route last week using new codeshare partner Air India’s three unused frequencies between the UK and India.
A third weekly flight is expected to start in October with the aim of going daily next year, while new services to Calcutta and Mumbai, formerly Bombay, are also planned.
Sir Richard said it would take Virgin at least three years to make a profit on the Delhi flights because of low frequency and high payments to Air India for traffic rights on the route.
The Indian government wants Virgin to consider investing in the state-owned Air India’s forthcoming privatisation programme – where 40% is to be held by foreign investors – to relieve the loss-makingairline’s debt and aircraftshortage.