RICHARD Branson’s latest venture got off the ground on May 1 when Virgin Sun took its first customers to the Mediterranean.
The 130,000 capacity programme is Virgin’s first foray into the short-haul market having spent 15 years operating flights and packages to the US.
While it has achieved notable success in this market, Branson is, true to his company’s name, a virgin to short haul.
The ambitious plan outlined by Branson is for Virgin Sun to be the size of Thomson within 10 years, a target which will be reached through organic growth rather than acquisition, he said.
It has already announced intentions to double the 2000 programme to 250,000 with the addition of five destinations and two aircraft, taking the Virgin Sun fleet to four.
All the aircraft are new, Branson having dropped a previous plan to use aircraft from Belgium-based Virgin Express.
But all this seems a pipe dream as Virgin tackles the immediate problem of filling its relatively small 1999 capacity.
Despite the undoubted strength of the brand, industry observers believe the operation is struggling to make its presence felt as multiples increasingly push their in-house products. “It is questionable whether the market can sustain another short-haul player,” said one source.
Branson denied his team was finding it tough.
“We are over 90% sold in May and the rest of the season is looking okay,” he said. “We are very pleased with the way Virgin Sun is taking off and are ready to take on the short-haul market.”
If necessary, Branson said Virgin would further push its product through Virgin Megastores and also start selling holidays through its Our Price record chain. However a Virgin insider said this was highly unlikely at this stage.
The operation’s director, Ian Brooks, admitted that four weeks ago he was “genuinely concerned” at the level of sales.
“Fortunately it has come on significantly since then and we are about 50% sold for the entire season,” he said.
“I think the poor sales were down to the fact that we did not have the infrastructure in place such as a late booking grid. We now have that and bookings have come on significantly.”
He insisted there is room for another player, and stressed the capacity was only a fraction of its rivals.
Brooks said the the first aim of the new operation is to establish the Virgin name in the short-haul market.
“We are carrying out an educational process explaining to the trade and public that Virgin is now offering short-haul holidays,” he said. “That is one of the biggest challenges facing us.
“The current operators are so well established that agents automatically look towards them. We need agents to think about Virgin Sun when they are selling packages.”
Customers seeking a package holiday also need educating as Brooks fears they will see a Virgin brochure and presume it is long haul.
“To overcome this we are having to publish our featured short-haul destinations on the front cover to make it clear what the brochure is offering,” he said. “The others don’t need to do this.”
But the most vital issue facing Virgin Sun is distribution. In an industry where directional selling is becoming the norm, Virgin is aware that its product may not even be racked by the multiples, let alone actively sold.
“Fortunately we have the Virgin name which is by far our biggest asset,” said Brooks.
“Even when we were contracting in Greece and Turkey hoteliers knew Richard Branson and his various ventures which helped us. But we know distribution is an important issue.
“We should be racked by all the multiples but more often than not there is only a file copy. It is a concern.”
Sales through Lunn Poly have already seen a decline since the chain said it was following a directional-sell policy. “There is no doubt we will have to rely on customers requesting Virgin,” said Brooks.
He was adamant that Virgin will offer something different to the other mass market operators.
Brooks added that it will make flying experience fun with bacon butties, hot dogs and ice cream replacing the standard on-board meals while the cabin crew entertain the passengers with jokes.