1
00:00:02,360 --> 00:00:07,800
Speaker 1: Bloomberg Audio Studios, podcasts, radio news. We are joined now

2
00:00:07,800 --> 00:00:10,680
Speaker 1: by shy Wis, who is, of course the CEO of

3
00:00:11,039 --> 00:00:11,960
Speaker 1: Virgin Atlantic.

4
00:00:12,200 --> 00:00:13,960
Speaker 2: I see it, Nice to see you guys.

5
00:00:14,560 --> 00:00:16,239
Speaker 1: He told us a few weeks ago that there was

6
00:00:16,320 --> 00:00:18,079
Speaker 1: some softening in the North Atlantic.

7
00:00:18,760 --> 00:00:19,520
Speaker 2: What's going on now?

8
00:00:19,680 --> 00:00:22,160
Speaker 3: Yeah, I think that it's a common question. I think

9
00:00:22,200 --> 00:00:25,639
Speaker 3: since taris were announced on the second of April and

10
00:00:25,720 --> 00:00:28,680
Speaker 3: until the state of execution on April the ninth, we

11
00:00:28,720 --> 00:00:32,680
Speaker 3: have seen some softening, but it's rebounding a bit. It's

12
00:00:32,680 --> 00:00:34,839
Speaker 3: hard to determine what the slope of the rebound. Is

13
00:00:35,520 --> 00:00:40,040
Speaker 3: A premium book right now, yeah, so improving versus the

14
00:00:40,120 --> 00:00:45,240
Speaker 3: April period premium strong leisure a bit weaker and really

15
00:00:45,240 --> 00:00:47,000
Speaker 3: concentrated in the United States.

16
00:00:48,440 --> 00:00:51,839
Speaker 2: I think a bit of uncertainty. Cloud. Do you say concentrated?

17
00:00:51,880 --> 00:00:53,519
Speaker 2: What do you mean you mean US traveler is coming

18
00:00:53,520 --> 00:00:54,760
Speaker 2: into Europe? That's right, Okay.

19
00:00:54,760 --> 00:00:56,680
Speaker 3: I think all a related story, or is it? I

20
00:00:56,680 --> 00:00:58,800
Speaker 3: don't think it is. I think it's literally an uncertainty

21
00:00:58,880 --> 00:01:02,880
Speaker 3: related story. And travelers like certainty, whether you're a business

22
00:01:02,960 --> 00:01:05,120
Speaker 3: or at leisure, of whether you're going have to meet.

23
00:01:04,959 --> 00:01:05,800
Speaker 2: Family or friends.

24
00:01:06,040 --> 00:01:07,960
Speaker 3: You just want to know that things are just going

25
00:01:08,040 --> 00:01:10,120
Speaker 3: to be as you expected them to be in terms

26
00:01:10,160 --> 00:01:10,920
Speaker 3: of your savings.

27
00:01:11,080 --> 00:01:12,480
Speaker 2: What are you're spending your money on.

28
00:01:12,840 --> 00:01:15,600
Speaker 3: It has improved a bit of I think you've heard

29
00:01:15,600 --> 00:01:19,760
Speaker 3: the theme across a bit of weakness, a bit of softening,

30
00:01:19,760 --> 00:01:21,240
Speaker 3: I would say, in the yield side of things.

31
00:01:21,240 --> 00:01:22,119
Speaker 2: So volumes are.

32
00:01:22,000 --> 00:01:25,360
Speaker 3: There, it's a bit of price, but it's improving day

33
00:01:25,360 --> 00:01:25,679
Speaker 3: by day.

34
00:01:25,760 --> 00:01:28,360
Speaker 1: Right now, can you how much room have you got

35
00:01:28,400 --> 00:01:30,760
Speaker 1: on prices? Fuel helping? How quickly can fuel help? You?

36
00:01:30,800 --> 00:01:33,720
Speaker 3: Know? Fuel is very stable at sixty five dollars, The

37
00:01:33,760 --> 00:01:36,679
Speaker 3: pound is a bit stronger versus the dollar. So all

38
00:01:36,720 --> 00:01:41,319
Speaker 3: these things in the balance help help airlines. But fundamentally

39
00:01:41,400 --> 00:01:44,000
Speaker 3: we need strong demand to continue, which we're seeing that

40
00:01:44,200 --> 00:01:45,840
Speaker 3: emerge after a.

41
00:01:45,880 --> 00:01:48,040
Speaker 2: Very strong start of the year. Did you was there

42
00:01:48,120 --> 00:01:49,840
Speaker 2: any effects off the UK US trade deal?

43
00:01:49,840 --> 00:01:53,600
Speaker 1: Did it in any way meaningfully change that degree of

44
00:01:53,640 --> 00:01:54,360
Speaker 1: uncertain So it's.

45
00:01:54,240 --> 00:01:57,840
Speaker 3: Going to be kind on the US UK trade deal.

46
00:01:57,880 --> 00:02:01,040
Speaker 3: I think actually we're in India more significant is the

47
00:02:01,080 --> 00:02:04,400
Speaker 3: India UK trade deal. We're now at the fourth largest

48
00:02:04,440 --> 00:02:07,640
Speaker 3: economy here in India for US at twenty five years

49
00:02:07,640 --> 00:02:09,920
Speaker 3: of flying here a million seats, we've really grown three

50
00:02:10,000 --> 00:02:12,080
Speaker 3: hundred and fifty percent over the last.

51
00:02:11,840 --> 00:02:12,800
Speaker 2: Five or six years.

52
00:02:13,000 --> 00:02:16,520
Speaker 3: I think this is more meaningful as India moves from

53
00:02:16,600 --> 00:02:21,280
Speaker 3: just a service economy to a manufacturing economy. This is

54
00:02:21,320 --> 00:02:25,560
Speaker 3: really significant for the k Virgin India. You got Virgin,

55
00:02:25,560 --> 00:02:28,640
Speaker 3: You've got Virgin Atlantic. That was the priority you saying

56
00:02:28,639 --> 00:02:31,600
Speaker 3: this surgery, I think, but you've known. We've just announced

57
00:02:31,639 --> 00:02:34,680
Speaker 3: actually yesterday our partnership with Indigo together with our partners

58
00:02:34,720 --> 00:02:39,079
Speaker 3: there France and Kalam. This is really about taking account

59
00:02:39,080 --> 00:02:41,320
Speaker 3: of the strength of our joint venture and expanding it where.

60
00:02:41,240 --> 00:02:41,840
Speaker 2: This one could be.

61
00:02:43,040 --> 00:02:45,200
Speaker 3: You know, there are about four and a half million

62
00:02:45,240 --> 00:02:48,160
Speaker 3: passengers a year to the UK, about seven million passengers

63
00:02:48,680 --> 00:02:50,679
Speaker 3: to the US. Less than ten percent of the population

64
00:02:50,760 --> 00:02:53,520
Speaker 3: here have a passport. I think this can be very

65
00:02:53,639 --> 00:02:54,080
Speaker 3: very big.

66
00:02:54,560 --> 00:02:56,680
Speaker 1: Okay, so this could be a very big moment. I

67
00:02:56,680 --> 00:02:58,160
Speaker 1: want to take you back just to the US with

68
00:02:58,280 --> 00:03:04,000
Speaker 1: just a moment sense that the uncertainty is we just

69
00:03:04,040 --> 00:03:06,440
Speaker 1: don't know what is going on. But do you think

70
00:03:07,200 --> 00:03:08,919
Speaker 1: I'm trying to isolate which fanks is are the most

71
00:03:08,919 --> 00:03:12,440
Speaker 1: important at the moment he's traveling. It's just sent but

72
00:03:12,480 --> 00:03:14,760
Speaker 1: it's traveling to the US just more difficult now, more

73
00:03:14,760 --> 00:03:16,960
Speaker 1: nerve ranking more, especially out of Europe.

74
00:03:17,000 --> 00:03:20,000
Speaker 3: We've heard that there is some negative feelings towards the

75
00:03:20,080 --> 00:03:20,639
Speaker 3: United States.

76
00:03:20,760 --> 00:03:22,200
Speaker 2: Off all the countries.

77
00:03:21,800 --> 00:03:24,360
Speaker 3: In Europe, and I count the UK in Europe, we

78
00:03:24,440 --> 00:03:27,720
Speaker 3: are the least impacted. You know, people love traveling to

79
00:03:27,800 --> 00:03:30,480
Speaker 3: the US, whether it's for business of course New York,

80
00:03:30,600 --> 00:03:33,880
Speaker 3: San Francisco, Los Angeles, but also to Florida. So I

81
00:03:33,880 --> 00:03:38,600
Speaker 3: think that the operative word here is sentiment. Travel in

82
00:03:38,720 --> 00:03:43,480
Speaker 3: all its types is impacted dramatically by sentiment and certainty

83
00:03:44,200 --> 00:03:45,120
Speaker 3: inward investment.

84
00:03:45,440 --> 00:03:46,960
Speaker 2: Just you know, what are the rules of the game.

85
00:03:47,400 --> 00:03:49,920
Speaker 3: And I think we're just waiting to see what happens

86
00:03:49,960 --> 00:03:53,840
Speaker 3: in July after the ninety day pause on tariffs is

87
00:03:54,560 --> 00:03:57,240
Speaker 3: but I already see that people even in this period,

88
00:03:57,360 --> 00:03:59,960
Speaker 3: they are just very quickly and we're seeing a rebound

89
00:04:00,360 --> 00:04:04,560
Speaker 3: in volumes and in price affect all types of travel.

90
00:04:04,920 --> 00:04:07,040
Speaker 1: In terms of the other story that I'm hearing around

91
00:04:07,040 --> 00:04:09,080
Speaker 1: the holes here is the cost to going out. The

92
00:04:09,680 --> 00:04:13,760
Speaker 1: tarents do actually mean higher prices for spare parts, for engines,

93
00:04:13,800 --> 00:04:17,000
Speaker 1: for you name it, it's gonna how much, how inflationally do

94
00:04:17,000 --> 00:04:17,680
Speaker 1: you think it could be?

95
00:04:18,760 --> 00:04:22,320
Speaker 3: Look, this is a question really for the economists, but there.

96
00:04:22,200 --> 00:04:24,440
Speaker 1: Have been aviation CEOs are basically the economists. You have

97
00:04:24,520 --> 00:04:25,120
Speaker 1: to be economists.

98
00:04:25,160 --> 00:04:26,080
Speaker 2: You have to have to be economists.

99
00:04:26,080 --> 00:04:27,760
Speaker 3: You're not gonna let me off the hook on this one, okay,

100
00:04:27,760 --> 00:04:30,360
Speaker 3: So I'll take the question and answer it. I think

101
00:04:30,400 --> 00:04:32,920
Speaker 3: it's fair to say that prices have gone up, of course,

102
00:04:32,920 --> 00:04:34,479
Speaker 3: over the period through the pandemic.

103
00:04:34,880 --> 00:04:36,680
Speaker 2: We're entering into a period.

104
00:04:36,360 --> 00:04:39,159
Speaker 3: Of more stability in the supply chain. You know, engines

105
00:04:39,200 --> 00:04:42,600
Speaker 3: are late, planes are a bit late, and we're seeing

106
00:04:42,640 --> 00:04:46,719
Speaker 3: a recovery. But the tariffs, no doubt will make it

107
00:04:47,160 --> 00:04:49,080
Speaker 3: will have an impact on the price of goods, the

108
00:04:49,120 --> 00:04:53,080
Speaker 3: price of transport, you know, changes of production. But these

109
00:04:53,279 --> 00:04:56,240
Speaker 3: things take time. They don't adjust overnight. So now I

110
00:04:56,279 --> 00:04:58,600
Speaker 3: think we're just gonna have to see how it settles

111
00:04:58,600 --> 00:04:59,760
Speaker 3: and then people adapt.

112
00:04:59,440 --> 00:05:01,440
Speaker 1: Relatively qu But it sounds like you're also telling me

113
00:05:01,560 --> 00:05:03,600
Speaker 1: you've got to deprioritize the US.

114
00:05:03,640 --> 00:05:04,480
Speaker 2: Is that is that fair?

115
00:05:04,920 --> 00:05:05,000
Speaker 1: No?

116
00:05:05,120 --> 00:05:07,560
Speaker 3: And you know for us, it's it's not even a possibility,

117
00:05:07,520 --> 00:05:09,160
Speaker 3: you know, neither do we want to do that. It's

118
00:05:09,240 --> 00:05:11,760
Speaker 3: virgin Atlantic. We always say it wouldn't be virgin without

119
00:05:11,760 --> 00:05:14,640
Speaker 3: the Atlantic. Sixty to seventy percent of our capacity is

120
00:05:14,640 --> 00:05:17,400
Speaker 3: to the United States, it's our more profitable and are

121
00:05:17,440 --> 00:05:20,000
Speaker 3: more successful. And no, I don't think we need to deprioritize.

122
00:05:20,480 --> 00:05:22,800
Speaker 3: Having said that, you can see the growth into India

123
00:05:22,839 --> 00:05:25,640
Speaker 3: we've announced, of course, we started flight to Saudi Arabia.

124
00:05:25,920 --> 00:05:27,880
Speaker 3: We're going to start a flat into Seoul next year.

125
00:05:27,920 --> 00:05:31,159
Speaker 3: In March, Cancun is coming. We launched Toronto. So a

126
00:05:31,200 --> 00:05:32,760
Speaker 3: balanced approach is the right approach.

127
00:05:32,880 --> 00:05:36,040
Speaker 1: Okay, but there is an emphasis. I best you and

128
00:05:36,040 --> 00:05:38,719
Speaker 1: I had the same conversation with him, your good friend.

129
00:05:38,720 --> 00:05:41,360
Speaker 1: He was talking about he sees the bit he's got

130
00:05:41,360 --> 00:05:43,360
Speaker 1: one hundred years, you've got twenty five years. He sees

131
00:05:43,360 --> 00:05:46,440
Speaker 1: the next hundred years as being outside the United States.

132
00:05:46,440 --> 00:05:49,560
Speaker 1: It's being the growth opportunity. Is the growth opportunity outside

133
00:05:49,560 --> 00:05:50,400
Speaker 1: of the United States.

134
00:05:50,400 --> 00:05:54,640
Speaker 3: Now look first forty years of Virgin Atlantic, twenty five

135
00:05:54,680 --> 00:05:57,800
Speaker 3: years of flying into India, and yes, yeah, yes, there

136
00:05:57,880 --> 00:06:00,680
Speaker 3: is there is growth. There is growth in India, and

137
00:06:00,760 --> 00:06:03,480
Speaker 3: that's why we bet on it. Actually, in twenty nineteen,

138
00:06:03,520 --> 00:06:05,839
Speaker 3: we looked at our portfolio and figured that we could

139
00:06:05,960 --> 00:06:09,200
Speaker 3: really only support one amazing growth market and made a

140
00:06:09,200 --> 00:06:12,960
Speaker 3: bet on India to the detriment of other locations, including China.

141
00:06:13,040 --> 00:06:14,680
Speaker 3: It happens to be that the bet seems to be

142
00:06:14,720 --> 00:06:18,360
Speaker 3: working out. We now have five daily flights into Mumbai,

143
00:06:18,440 --> 00:06:21,880
Speaker 3: Bengaluru and Delhi. With our partnership with Indigo, we connect

144
00:06:21,920 --> 00:06:24,800
Speaker 3: into thirty six domestic destinations.

145
00:06:25,040 --> 00:06:26,039
Speaker 2: So the sky is the limit.

146
00:06:26,080 --> 00:06:28,800
Speaker 3: And when Indigo is now flying into Manchester into Skipoll,

147
00:06:29,000 --> 00:06:30,440
Speaker 3: we can connect these passengers.

148
00:06:30,560 --> 00:06:32,280
Speaker 2: Forty percent of the passengers.

149
00:06:31,760 --> 00:06:34,599
Speaker 3: Flying out of India connect onwards either in the UK

150
00:06:34,760 --> 00:06:36,960
Speaker 3: or the United States. So I think it's really about

151
00:06:37,000 --> 00:06:40,120
Speaker 3: the connectivity, it's about the partnership with other airlines, and

152
00:06:40,160 --> 00:06:43,080
Speaker 3: of course it's a betting on fast growing markets, which

153
00:06:43,160 --> 00:06:45,720
Speaker 3: is India not China.

154
00:06:45,720 --> 00:06:47,960
Speaker 1: Though essentially the world needs to be shifting. This is

155
00:06:48,000 --> 00:06:50,599
Speaker 1: now maybe just because we're all here, but this is

156
00:06:50,600 --> 00:06:54,279
Speaker 1: being perceived as being the big growth market. India is

157
00:06:54,279 --> 00:06:56,440
Speaker 1: the growth market. China is not the growth market. Am

158
00:06:56,480 --> 00:06:58,400
Speaker 1: I looking at it the right way? I wouldn't write

159
00:06:58,680 --> 00:06:59,160
Speaker 1: China off.

160
00:06:59,200 --> 00:07:01,880
Speaker 3: You know, it's still the second largest economy and there's

161
00:07:01,920 --> 00:07:04,480
Speaker 3: a long way for India to catch up to China.

162
00:07:04,920 --> 00:07:07,680
Speaker 3: But I think in terms of momentum, the momentum is

163
00:07:07,760 --> 00:07:08,320
Speaker 3: very much here.

164
00:07:08,400 --> 00:07:10,440
Speaker 2: It's palpable. You can feel it, you can see it,

165
00:07:10,920 --> 00:07:11,640
Speaker 2: and you can hear.

166
00:07:11,520 --> 00:07:14,360
Speaker 3: The conversations if it was an outsourcing conversation in the

167
00:07:14,360 --> 00:07:18,480
Speaker 3: past and the technology sector, it's now potentially a manufacturing

168
00:07:18,640 --> 00:07:22,600
Speaker 3: aided by of course, trade deals, aided by tariffs which

169
00:07:22,640 --> 00:07:24,240
Speaker 3: rebalanced the world economy.

170
00:07:24,760 --> 00:07:26,480
Speaker 2: So I've got to catch up. Nice to see you.

171
00:07:26,520 --> 00:07:26,960
Speaker 2: Thank you.

172
00:07:27,280 --> 00:07:30,160
Speaker 1: Sort to get my dates wrong, but you corrective as

173
00:07:30,200 --> 00:07:34,040
Speaker 1: a so I will as the CEO of Virgin Atlantic,