ABTN speaks to Corneel Koster, Virgin Atlantic’s director of operations, safety and security, about the importance of the business travel sector, the future of the airport security experience and how managing cargo compares with passengers.
What do you think about the future of airport security?
It’s something which is not going to go away any time soon. It’s here to stay and is a key part of the transport industry. I think there are lots of technological advances around the corner. For example, IATA created a security checkpoint prototype where you just walk through the tunnel and that’s a security check. I think we’re going to see airport security become less intrusive, more smooth and less time-consuming in the future, and that’s what we would like.
I think we are all behind the tightest possible security, but we’d like to make the customer journey pleasant at the same time. We feel that there are many opportunities to do so. We also understand that there is the potential to develop more risk-based measures and to approach security towards people differently on the basis of an assessed level of risk. For example, our frequent flyer travelling every week could be subject to different security controls than someone who is unkown to the border agency. But, any such risk-based passenger screening would still need to be supported by random checks, because you can’t be predictable and we need to prevent exploitation by terrorists or other criminal elements.
It’s also something pilots have been calling for...
Yes, they have been calling for smoother processing and a more uniform approach across the UK.
What do you think about the government’s approach to airport security?
We have a really strong and positive relationship with the government on this. We’re firm supporters of outcome-based securit – where you agree to the outcome and then the operators (the airlines, the airports and the security companies) have the freedom to work towards the outcomes. It is a more proactive way to drive security, rather than reactionary layering. Currently security screening can be very reactive.
We of course understand that governments have to react to events, like liquid explosives, shoes or printer cartridges. Those are some of the topical issues that cause the government to implement an additional control measure – and they have to and we understand – but that’s not the only way to drive security policy. It can result in a very layered process, which is not only inconvenient to passengers but which also can get quite predictable.
People need to fly safe, people expect to be checked, but we think there can always be improvement in the level of technology applied and the level of predictability applied, making sure checks are not intrusive and time consuming, but effective at the same time.
We understand that the UK government supports a less prescriptive approach and is moving towards a more outcome-based regime, and we’re very pleased to be working with them to support that.
The government is also trying to improve the operational effectiveness of airports in the south east of England. Have you seen much improvement or do you feel there is there still more to come?
There is definitely still more to come. The key challenge in the south-east is resilience. We play a prominent role in the government’s task force to improve the airports in the south east – our COO is part of the task force – and we’re very closely involved in other cross-industry platforms working to deliver optimal service on the normal days, but also on those inevitable days that you have, for example, weather distruption or a security incident or something else that triggers a decrease in airline capacity.
We’re working on making sure that we optimise capacity constraints more effectively, recover more quickly from unexpected events and that we can grow in an environmentally sustainable way, delivering best possible on time performance, while never compromising on safety and security.
With growth at airport in the south east a vetoed topic with the current government, how far is improvement really possible?
With regards to airport growth, it’s quite clear that airport expansion in the south-east is off the table for the moment and for the foreseeable future. So our focus is on maximising the opportunities that are available to us and growing within the framework and continuously working together with all airport partners – NATS, the CAA, ground handlers, airlines, airport operators – making sure that we optimise all elements of the logistical change to deliver best possible service under all circumstances. We’re a key part of that.
But in terms of growth...
There isn’t a platform for breakthrough growth at the moment, that’s very clear and we understand that. But there are still things you can do by further optimising and planning the supply chain. The airspace available, the taxi-ways available, the stand space available. If you further integrate that planning step by step you can improve the resilience of those airports. I think that’s the drive that the industry has at the moment and we are expecting results from that.
With the lack of growth in the south east, might Virgin be looking to grow elsewhere – Manchester or Scotland, perhaps?
We are growing in Manchester. Our Manchester routes have delivered good results for us in the last few years. We also operate seasonally out of Glasgow. Our Manchester to Vegas routes is a tremendous success. I do see opportunities. We’re not announcing anything today, but I do see further opportunities up north.
Virgin has recently launched a new website for the trade. Are relationships with travel agencies and travel management companies important for the airline?
Absolutely. Trade is very important to us and our approach to trade has always been collaborative. We recognise that they play a key role in building our business, so we want to provide them with as much information and as many tools as possible to help them do their job. That’s why we have just launched this new dedicated website. The trade is a vital form of access to the market for Virgin Atlantic. It’s not a secret to say that a fair percentage of our revenue in the UK does come from trade.
Is the business traveller in particular important to Virgin?
At Virgin Atlantic we are passionate about all our passengers, but it very much includes the business travellers. No matter which cabin they travel in, they’re a vital segment to us. And not just to us, of course, but also to the economy as a whole. Business travel supports trade, investment and the growth of UK plc.
How are you seeing the premium market now, in terms of bookings?
Generally, it’s going well. Upper Class demand looks strong. Our Premium Economy is looking healthy as well, so we’re seeing a good mix of travel in the premium classes. We’re positive about the rebound.
Virgin was the pioneer of premium economy, when it launched “mid class” in 1992. Is it still important for the airline to be continually developing new products?
Absolutely. We’ve launched a new premium economy seat for our new Airbus A330 aircraft. We’re talking new seats, state of the art in-flight entertainment (IFE), which is all touch screen. If you’re seated in premium economy you have a very wide touchscreen and you also have a handset touchscreen as well, so you can multi task and watch news on one and a movie on the other, or the Skymap on one and watch a documentary on the other. And the IFE has connectivity to iPods, USBs, etc. You can watch your home videos or your pictures on the way back from your holiday. For us being at the cutting edge of premium economy is absolutely crucial.
You have a background in managing cargo, having been Middle East and regional director East Asia at KLM Cargo. How does this compare with managing passengers?
I was in cargo management for many years. It is not easier or harder, but it is different. There are very strict security requirements for cargo, such as 100% screening of shipments, which differ by market, whereas passenger security tends to follow the same approach all over the world.
At Virgin, we’re very proud of our growing cargo business, and we transported 227,000 tonnes of cargo in the last financial year. It is a key part of our route profitability. We need good passenger loads and we need good full bellies on our aircraft to produce healthy results. We’re very much an airline that understands the value of air cargo and its importance to our overall success.
What’s different about cargo is that the booking timeline is shorter. Bookings generally start from two weeks prior to departure, running up until only a few hours before a plane is due to leave. Everything is very time sensitive, because it’s either perishable, or very high value, so the supply chain logistics are crucial. That’s a difference with passenger traffic. You need to make sure that you deliver the highest level of reliability for every event in the supply chain.
Is cargo can be indicator of the health of the economy – like business travel?
How has it been recently?
Last year has been a really strong year for cargo. You see that the recovery comes quicker in cargo than it does in passenger demand, which was a positive signal for us coming out of the downturn and into recovery mode. We definitely have positive early indications from cargo. The early part of this year has also been strong.
What are some of the main challenges facing Virgin as an airline?
We have come out of a real industry downturn, one of the toughest periods in the history of aviation. On top of that we were compounded by the severe events of the ash crisis in April last year, and the regrettable disruption of snow in December. It’s an industry that is highly susceptible to external shocks, and that of course is of concern and a continuous challenge. However, we had a strong year of recovery and we took actions early in the downturn. We were able to display resilience and we have started to show a strong platform for growth moving forward.
The economic climate is still challenging. As an industry we operate on tight profit margins. Consumer confidence isn’t great – that doesn’t help. Rising fuel prices are a concern. We’re trading well, but it’s certainly still a challenging time.
Can you comment on discussions around the possible sale of Virgin Atlantic by Sir Richard Branson?
Deutsche Bank is looking at all our options, which includes looking at the role of alliances. We are one the last independent carriers. However, it’s very early days and we need to ensure that Deutsche Bank completes the review before we can comment on further plans for the future.
In the meantime I think it’s important to say that we are strengthening our business and growing our business and continuing to stay focussed as a company.
And finally, can you comment on the possible strike by Virgin’s pilots?
We value our pilot workforce enormously and that is why we have offered a rise of twice the national average, a share of company profits and two further guaranteed pay increases in the next two and half years. This pay offer is industry leading despite a very challenging economic backdrop.
We remain committed to finding a solution and are open to continued dialogue with our pilots’ representatives to bring this to a positive conclusion.