Annual Report 2017
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Virgin Atlantic Annual Report 2017 Atlantic Virgin Annual Report 2017 The Virgin Atlantic experience The Virgin Atlantic experience With our pioneering spirit and human touch, we want everyone to share our passion for flying. Our strategy to ensure sustainable growth is delivering an irresistible customer experience. Contents STRATEGIC REPORT GOVERNANCE 2017 highlights 1 Board of Directors 42 Group at a glance 2 Leadership team 46 Our flight network 4 Committees of the Board 48 Our irresistible experience 6 Directors’ report 50 Chairman’s statement 12 Directors’ responsibility statement 52 Chief Executive Officer’s Q&A 14 FINANCIAL STATEMENTS Chief Financial Officer’s review 18 Independent auditor’s report 53 Market review 22 Financial statements 55 Our strategy 24 Strategic review 26 OTHER INFORMATION Our key performance indicators 30 Corporate structure 87 Sustainability 34 Glossary 88 Principal risks and uncertainties 38 LEARN MORE For more information please visit: www.virginatlantic.com 2017… A great year for our customers #1 in customer satisfaction for UK-US traffic1 million passengers flown 397k 5.3 Virgin Holidays customers 2.7£bn in revenue 230m kilograms of cargo transported 1. IATA airs@t transatlantic 2017. Virgin Atlantic Annual Report 2017 1 Group at a glance Working together to provide a unique experience We have a simple goal – by being Joint Venture with Delta Air Lines, Inc uniquely Virgin Atlantic, we want to be (Delta), maximising opportunities with the airline most loved by our customers. Virgin Holidays, as well as empowering our people with the right skills and tools We are achieving this through realising to deliver that unique Virgin Atlantic the full potential of our transatlantic experience. Highlights 5.3m Employees passengers flown this year, down 0.1m year on year 9,823 people across the Group1 £2.7bn OTP total revenue, 1% down year on year We achieved our on-time performance (OTP) metrics, including 79% of flights arriving within 15 minutes NPS of schedule, 2.3% down compared to prior year net promoter score improved by 5pts year on year Fleet Joint Venture We became the first carrier in Europe to offer Wi-Fi offers over 200 destinations between the UK and the across our entire fleet US, providing 35% share of total UK-US capacity We are the first airline to offer an accessible inflight We announced our intention to launch an expanded entertainment system for customers with sight loss transatlantic Joint Venture with Air France-KLM and Delta Air Lines 10 A330 Upper Class cabins refreshed Network Added new routes from Manchester Launched new daily service to Seattle Extended Flybe codeshare to Heathrow, and Jet Airways codeshare to our transatlantic flights Virgin Atlantic’s international cargo Highlights operations is focused on delivering consistency and reliability for its 230.5m customers across the globe. kilograms of cargo transported The offering spans general freight, Launched express courier, automotive, pets, new Pharma Zone at Heathrow to serve pharmaceuticals market perishables and pharmaceuticals over 500 destinations. 1. As at 31 December 2017. 2 Virgin Atlantic Annual Report 2017 Built on a belief that ‘everyone can take Offering a differentiated experience and on the world’, Virgin Holidays gives a brand that’s known and trusted as the aspiring adventurers the confidence consumer champion, Virgin Holidays is to make their holiday dreams real. a leading tour operator to the US and Caribbean, as well as offering holidays to other popular long haul destinations. Highlights Winner Departure Beach of three British Travel Awards and two Silver Awards, Launch of the world’s first Departure Beach, voted by UK consumers due to open May 2018 Customers Experiences 397,000 in 2017, 1.5% growth year on year supported by the HoliDOs campaign – ‘it’s not where you go, it’s what you do’ – the largest new product Online launch in our history 4% growth year on year in online distribution mix Inclusivity Retail Launched single parent holidays and introduced a Opened a further v-room retail store in Cardiff and our new policy to address captive dolphins and whales. new concept store in Stevenage Supported the Caribbean with the recovery effort and helped to reignite tourism following Hurricane Irma NPS score increased by 3pts year on year reflecting higher customer satisfaction Virgin Atlantic Annual Report 2017 3 Our flight network Codeshare Expanding our reach Flybe Flybe Aberdeen Edinburgh Glasgow On top of the 200+ destinations offered through our Joint Venture with Delta, this year Belfast Europe Manchester Hannover we swapped our Detroit service with Delta’s Seattle service to optimise market demand Knock Manchester Amsterdam East Midlands Dusseldorf and meet customer preferences. Our Flybe codeshare expanded to include their new Birmingham Cardiff London Exeter Heathrow Paris Heathrow-Scotland services, adding feed for our Heathrow flights and improving travel London Gatwick Newquay Southampton Milan options for our Scottish customers. We expanded our Jet Airways partnership to cover Jersey US-India flying as well as ten new India and South East Asia destinations. We also announced a codeshare with Virgin Australia, creating all-Virgin travel experiences between the UK and Australia, expected to start in March 2018. Air China Virgin Australia Glasgow/ Beijing Cairns Edinburgh Belfast Chengdu Brisbane Manchester Shanghai London Gold Coast Wenzhou Sydney Chongqing Seattle Adelaide 42 Minneapolis / St Paul Heathrow/ Melbourne Canberra Portland 11 Gatwick 105 29 4 Boston Hobart Salt Lake City 63 86 Beijing 10 Detroit 6 New York / Newark 21 1 San Francisco5 Las Vegas Philadelphia 50 Washington Jet Airways Air New Zealand Atlanta Los Angeles Orlando Shanghai 9 Miami Delhi Amritsar Delhi Hong Kong Auckland Cancun 3 Jaipur Hong Kong Havana Antigua Dubai Hong Kong Ahmedabad Mumbai Singapore St. Lucia Mumbai Wellington Montego Bay 3 Singapore Barbados Goa Queenstown Christchurch 2 Grenada Lagos Kozhikode Tobago Kochi Singapore Thiruvananthapuram Colombo Los Angeles Rarotonga Cook Island o c is c ran F n a Brisbane S Johannesburg Los Angeles Perth Adelaide Flybe (codeshare) Sydney Auckland Melbourne 6 Virgin Atlantic operated Virgin Australia (codeshare) Delta Air Lines operated Singapore Airlines (codeshare) Route operated by Air China (codeshare) Delta, Virgin Atlantic or Virgin Australia 1. PHL: Service ceases 3 May 2018. 2. GND/TAB: Operates as tag flights from UVF. 3. BGI: Served from both LHR and LGW, but Jet Airways (codeshare) 207 Number of onward LHR service only operates until 24 Feb 2018. Delta connections 4. BOS: MANBOS operates summer season only. from this hub 5. SFO: MANSFO operates summer season only. Air New Zealand (codeshare) 6. Planned launch March 2018. 7. SYD: HKGSYD from 2 July 2018. Subject to regulatory approval. 4 Virgin Atlantic Annual Report 2017 Codeshare Flybe Flybe Aberdeen Edinburgh Glasgow Belfast Europe Manchester Hannover Knock Manchester Amsterdam East Midlands Dusseldorf Birmingham Cardiff London Exeter Heathrow Paris London Gatwick Newquay Southampton Milan Jersey Air China Virgin Australia Glasgow/ Beijing Cairns Edinburgh Belfast Chengdu Brisbane Manchester Shanghai London Gold Coast Wenzhou Sydney Chongqing Seattle Adelaide 42 Minneapolis / St Paul Heathrow/ Melbourne Canberra Portland 11 Gatwick 105 29 4 Boston Hobart Salt Lake City 63 86 Beijing 10 Detroit 6 New York / Newark 21 1 San Francisco5 Las Vegas Philadelphia 50 Washington Jet Airways Air New Zealand Atlanta Los Angeles Orlando Shanghai 9 Miami Delhi Amritsar Delhi Hong Kong Auckland Cancun 3 Jaipur Hong Kong Havana Antigua Dubai Hong Kong Ahmedabad Mumbai Singapore St. Lucia Mumbai Wellington Montego Bay 3 Singapore Barbados Goa Queenstown Christchurch 2 Grenada Lagos Kozhikode Tobago Kochi Singapore Thiruvananthapuram Colombo Los Angeles Rarotonga Cook Island o c is c ran F n a Brisbane S Johannesburg Los Angeles Perth Adelaide Flybe (codeshare) Sydney Auckland Melbourne 6 Virgin Atlantic operated Virgin Australia (codeshare) Delta Air Lines operated Singapore Airlines (codeshare) Route operated by Air China (codeshare) Delta, Virgin Atlantic or Virgin Australia 1. PHL: Service ceases 3 May 2018. 2. GND/TAB: Operates as tag flights from UVF. 3. BGI: Served from both LHR and LGW, but Jet Airways (codeshare) 207 Number of onward LHR service only operates until 24 Feb 2018. Delta connections 4. BOS: MANBOS operates summer season only. from this hub 5. SFO: MANSFO operates summer season only. Air New Zealand (codeshare) 6. Planned launch March 2018. 7. SYD: HKGSYD from 2 July 2018. Subject to regulatory approval. Virgin Atlantic Annual Report 2017 5 Our irresistible experience Countdown: excitement on the ground 6 Virgin Atlantic Annual Report 2017 From our very first booking more than thirty years ago, our customers have been at the heart of our business. We take delight in delivering our service In Los Angeles, we were pleased to with flair – embracing the human spirit welcome Delta into Terminal 2 where we’re and letting it fly. both now located. This enables us to offer better connectivity and a heightened In 2017, we continued to focus on what experience for our passengers across the makes us different, which is the way we take West Coast. care of our customers – offering irresistible experiences at a competitive price. This starts from when a customer visits us online, Getting that Virgin by phone or in a Virgin Holidays retail Holidays feeling store to book a journey. It continues with With us, a great holiday experience a friendly, seamless check-in and an starts long before you get on a Virgin innovative experience at our unique Atlantic plane. airside Clubhouses and v-rooms. We sought new ways to inspire customers This year, we continued to invest in our through an innovative partnership with ITV’s customer experience – after all, it’s what Saturday Night Takeaway and Disney. makes us stand out from the pack. Building on the success of our standalone Enabling an effortless retail v-room stores, we opened a further store in Cardiff and refreshed 13 of our customer experience concession stores.