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Manchester reaping benefits of new US routes

In our conversation with Virgin Atlantic CEO Craig Kreeger, Virgin Holidays MD Joe Thompson, and Manchester Airport CEO Andrew Cowan, the panel discussed a range of topics including the future expansion plans of Manchester Airport and how new routes to the US were already helping improve the city’s global business links.

As Craig Kreeger, CEO of Virgin Atlantic said: “We have helped make Manchester much more available to the rest of the world, and the rest of the world much more available to Manchester.”

During the debate Mr Kreeger charted Virgin Atlantic’s move from being solely a leisure airline to one that increasingly creates business connections.

He said Manchester was a “huge opportunity” for the airline which was moving more and more of its resources north. “We see Manchester as a city with a growing technology and entertainment focus, with a young entrepreneurial spirit. Those tend to be the cities where Virgin Atlantic does best.”

He said North West businesses now needed to fully embrace the US opportunities that the airline was providing. “In every one of the markets we have added in the past 18 months about 70% of customers are originating in Manchester, and 30% are originating from the US side. The success or failure of these markets will depend on Manchester-based businesses pursuing international expansion.”

Mr Kreeger said in the context of uk plc he had been disappointed in the rate of expansion of UK businesses to certain destinations around the world. “A great example is Brazil, a place where French companies have invested an awful lot more than British companies.”

Challenges

He admitted that challenges were plentiful in the airline industry. “Every day I can pick up a newspaper and see something on the front page that will impact my business, almost always negatively, whether fuel prices, political unrest or exchange rate changes for instance. The airline business suffers the ebbs and flows of the economic cycle in many ways more than others, while at the same time it is an intensely competitive market.”

However he said Virgin’s long-standing commitment to reinvesting in the business, alongside its very distinctive culture, helped overcome these challenges. “I would rather have inconsistent genuine service than a perfectly consistent robotic service. I want people to be themselves and if that means a little inconsistency then that is a fair trade off. What I don’t want is to lose the human relationship with customers, that is what makes Virgin Atlantic different.”

Leisure market

Mr Kreeger was joined on stage by Joe Thompson, Senior Vice President and Managing Director of Virgin Holidays. He said that retail was still the firm’s biggest distribution channel. “When customers are spending several thousand pounds on a holiday they sometimes need guidance to make that decision, there is no substitute for doing that face to face. High street presence is still critical.”

Mr Thompson said although the market for package holidays was still growing, buying behaviours were changing. “Consumers want more tailored experiences when travelling. For instance we have just launched our ‘300 experiences’ that you can add to your holiday. The days of the traditional seven or 14-day holiday where everyone flies on the same flight, gets on the same bus and stays in the same hotel are long gone.”

Infrastructure

Andrew Cowan, CEO of Manchester Airport, called for more infrastructure investment on the ground to help further improve Greater Manchester’s offer.
He added: “We want to see better ground transport links. There has been a lot in the Press about Northern Powerhouse rail and HS2. We need to make decisions and get on with some of this stuff, and we want government to do that. Manchester is doing lots of things very well to drive its brand and profile around higher education, sport, culture and tourism for instance. But we do need some support from central government to help us get that investment in.”

The debate was chaired by Professor Vikas Shah, CEO of Swiscot Group and honorary professor at Alliance MBS.