Branson’s wake: Some flash, some flying

Richard Branson came to Las Vegas on Wednesday to promote his Virgin Atlantic Airways with his customary élan — who else would zip around the Bellagio fountains on a jet ski? But he also dropped a hint of potential turbulence ahead.

One of the few bright spots during the recession has been the growing number of overseas visitors coming to Las Vegas and passing through McCarran International Airport.

“A lot of that was due to the weak dollar,” said Branson, Virgin Atlantic’s chairman, at a Wednesday-morning news conference to mark the 10th anniversary of nonstop flights to London from Las Vegas.

But with debt woes engulfing countries such as Greece and Spain, the euro’s value has fallen more than 18 percent since November.

“It’s going to be interesting to see what happens now that the dollar has regained its strength,” Branson said.

Virgin Atlantic, he said, still has enough “pent-up demand” to continue to support not only the London service but the twice-a-week flights to Manchester, England, scheduled to start in April. However, he added, “We will have to work harder,” especially to convince more locals to buy tickets to Europe.

Much like archrival British Airways, Virgin Atlantic sells far more seats on the east side of the Atlantic Ocean than in Las Vegas.

Virgin Atlantic marked one of the early successes in attracting foreign airlines to McCarran, starting with twice-a-week flights in June 2000 and growing to daily frequency six years later. Lately, the pace has cooled.

The 281,000 passengers Virgin Atlantic brought to Las Vegas last year marked a 2.8 percent decline from the peak in 2007. During the first four months of this year, the numbers fell another 8.7 percent, partly due to massive flight disruptions caused by the erupting volcano in Iceland.

Virgin Atlantic CEO Steve Ridgway attributed some of the decline to using smaller versions of the Boeing 747 on the route, reducing the number of weekly seats by 8.5 percent over the past three years.

He declined to give a specific outlook for how the route will fare over the next couple of years.

“It will depend on the overall economic recovery and what happens with the euro and what happens with exchange rates,” he said.

In addition, British Airways launched its own daily nonstops to London in October, drawing 55,000 passengers during the first four months of this year compared with Virgin Atlantic’s 78,000. Ridgway said more than half of its passengers come from parts of the United Kingdom outside of London, who make the connection at Gatwick airport, while British Airways markets heavily in continental Europe for travelers to change planes at its Heathrow airport hub.

Meanwhile, Branson raised the possibility of major changes for Virgin Atlantic’s structure in the future. A joint venture alliance between British Airways and American Airlines to market and operate trans-Atlantic service would give them an overwhelming presence in London, he said.

“We will fight to the bitter end to stop it,” he said.

Earlier this year, the U.S. Department of Transportation gave preliminary approval to the joint venture and immunity from antitrust actions. Branson said the battle will continue with the European Union and in the courts, if necessary.

“If we ultimately fail, we may decide to tie up with other airlines,” he said. “We would prefer to stay independent.”

During his visit, Branson, who has formed hundreds of other companies under the Virgin label in entertainment, retailing, mobile communication and other airlines, put on the kind of show that has become his trademark. From walking on the wings of a 747 to slinging a burlesque dancer over his shoulders to performing the Bellagio fountain stunt, he made sure he supplied plenty of lens candy for the assembled American and British media.

Contact reporter Tim O’Reiley at toreiley@lvbusinesspress.com or 702-387-5290.