A little knowledge (and 'a reliable source') are dangerous things...
Virgin's loads, like everyone else's, fluctuate with variations in the overall market. That said, Virgin's loads are higher than they have been for some years. More importantly, the margin (particularly in the economy cabin) is rising healthily. The Japanese market is particularly sensitive to security and health issues around the world, and loads always drop significantly whenever the Japanese feel that the risk level has increased. Why the Japanese should be so much more sensitive than the rest of the world, who knows, but they are. Fortunately, Virgin make much more money from freight, which doesn't give a damn about risk! In any case, the effect of the London bombings on loads will be temporary and will rebound quickly, even on NRT.
The Sydney route is a different animal to any other on the Virgin network, as the only '5th freedom' destination. That means that passengers can be picked up in HKG for passage to SYD and vice versa. Through traffic is minimal - and unwanted. The yield on a through ticket is tiny compared to the yield for a single sector. That's why LHR-SYD is not promoted in Britain, and SYD-LHR is ignored in Oz. In fact, the marketing budgets in Australia and Hong Kong are, at the moment, very small in any case; for the budget expended, the route is doing OK - it often takes a long time to bring a route into profit. There
is a minor problem with the perception of Blue and Atlantic being the same outfit, but that is being tackled.
Forward bookings are changing in nature. Leisure passengers are booking later and later, so forward loads are less easy to predict than they were. However, Virgin is quite happy with the bookings situation as it stands. On many routes, extra capacity is desperately needed - though slots and aircraft aren't available to satisfy the demand.
Virgin is suffering, like all airlines outside the Middle East, with high fuel prices. That's meant that fuel surcharges have now risen to £24 a sector. That seems to have had little effect on demand - as BA's 35% increase in quarterly profits announced today shows quite nicely.
The longhaul market is very healthy, and Virgin's share of it is healthier than most. Profits for 2005/6 will not hit the levels of 04/05, thanks to the lack of exceptional items, but they are anticipated to be very acceptable.
Where do I get my info? Well, believe me, it doesn't get any more credible than my source...
