Speaker 1: Bloomberg Audio Studios, podcasts, radio news. We are joined now
Speaker 1: by shy Wis, who is, of course the CEO of
Speaker 1: Virgin Atlantic.
Speaker 2: I see it, Nice to see you guys.
Speaker 1: He told us a few weeks ago that there was
Speaker 1: some softening in the North Atlantic.
Speaker 2: What's going on now?
Speaker 3: Yeah, I think that it's a common question. I think
Speaker 3: since taris were announced on the second of April and
Speaker 3: until the state of execution on April the ninth, we
Speaker 3: have seen some softening, but it's rebounding a bit. It's
Speaker 3: hard to determine what the slope of the rebound. Is
Speaker 3: A premium book right now, yeah, so improving versus the
Speaker 3: April period premium strong leisure a bit weaker and really
Speaker 3: concentrated in the United States.
Speaker 2: I think a bit of uncertainty. Cloud. Do you say concentrated?
Speaker 2: What do you mean you mean US traveler is coming
Speaker 2: into Europe? That's right, Okay.
Speaker 3: I think all a related story, or is it? I
Speaker 3: don't think it is. I think it's literally an uncertainty
Speaker 3: related story. And travelers like certainty, whether you're a business
Speaker 3: or at leisure, of whether you're going have to meet.
Speaker 2: Family or friends.
Speaker 3: You just want to know that things are just going
Speaker 3: to be as you expected them to be in terms
Speaker 3: of your savings.
Speaker 2: What are you're spending your money on.
Speaker 3: It has improved a bit of I think you've heard
Speaker 3: the theme across a bit of weakness, a bit of softening,
Speaker 3: I would say, in the yield side of things.
Speaker 2: So volumes are.
Speaker 3: There, it's a bit of price, but it's improving day
Speaker 3: by day.
Speaker 1: Right now, can you how much room have you got
Speaker 1: on prices? Fuel helping? How quickly can fuel help? You?
Speaker 3: Know? Fuel is very stable at sixty five dollars, The
Speaker 3: pound is a bit stronger versus the dollar. So all
Speaker 3: these things in the balance help help airlines. But fundamentally
Speaker 3: we need strong demand to continue, which we're seeing that
Speaker 3: emerge after a.
Speaker 2: Very strong start of the year. Did you was there
Speaker 2: any effects off the UK US trade deal?
Speaker 1: Did it in any way meaningfully change that degree of
Speaker 1: uncertain So it's.
Speaker 3: Going to be kind on the US UK trade deal.
Speaker 3: I think actually we're in India more significant is the
Speaker 3: India UK trade deal. We're now at the fourth largest
Speaker 3: economy here in India for US at twenty five years
Speaker 3: of flying here a million seats, we've really grown three
Speaker 3: hundred and fifty percent over the last.
Speaker 2: Five or six years.
Speaker 3: I think this is more meaningful as India moves from
Speaker 3: just a service economy to a manufacturing economy. This is
Speaker 3: really significant for the k Virgin India. You got Virgin,
Speaker 3: You've got Virgin Atlantic. That was the priority you saying
Speaker 3: this surgery, I think, but you've known. We've just announced
Speaker 3: actually yesterday our partnership with Indigo together with our partners
Speaker 3: there France and Kalam. This is really about taking account
Speaker 3: of the strength of our joint venture and expanding it where.
Speaker 2: This one could be.
Speaker 3: You know, there are about four and a half million
Speaker 3: passengers a year to the UK, about seven million passengers
Speaker 3: to the US. Less than ten percent of the population
Speaker 3: here have a passport. I think this can be very
Speaker 3: very big.
Speaker 1: Okay, so this could be a very big moment. I
Speaker 1: want to take you back just to the US with
Speaker 1: just a moment sense that the uncertainty is we just
Speaker 1: don't know what is going on. But do you think
Speaker 1: I'm trying to isolate which fanks is are the most
Speaker 1: important at the moment he's traveling. It's just sent but
Speaker 1: it's traveling to the US just more difficult now, more
Speaker 1: nerve ranking more, especially out of Europe.
Speaker 3: We've heard that there is some negative feelings towards the
Speaker 3: United States.
Speaker 2: Off all the countries.
Speaker 3: In Europe, and I count the UK in Europe, we
Speaker 3: are the least impacted. You know, people love traveling to
Speaker 3: the US, whether it's for business of course New York,
Speaker 3: San Francisco, Los Angeles, but also to Florida. So I
Speaker 3: think that the operative word here is sentiment. Travel in
Speaker 3: all its types is impacted dramatically by sentiment and certainty
Speaker 3: inward investment.
Speaker 2: Just you know, what are the rules of the game.
Speaker 3: And I think we're just waiting to see what happens
Speaker 3: in July after the ninety day pause on tariffs is
Speaker 3: but I already see that people even in this period,
Speaker 3: they are just very quickly and we're seeing a rebound
Speaker 3: in volumes and in price affect all types of travel.
Speaker 1: In terms of the other story that I'm hearing around
Speaker 1: the holes here is the cost to going out. The
Speaker 1: tarents do actually mean higher prices for spare parts, for engines,
Speaker 1: for you name it, it's gonna how much, how inflationally do
Speaker 1: you think it could be?
Speaker 3: Look, this is a question really for the economists, but there.
Speaker 1: Have been aviation CEOs are basically the economists. You have
Speaker 1: to be economists.
Speaker 2: You have to have to be economists.
Speaker 3: You're not gonna let me off the hook on this one, okay,
Speaker 3: So I'll take the question and answer it. I think
Speaker 3: it's fair to say that prices have gone up, of course,
Speaker 3: over the period through the pandemic.
Speaker 2: We're entering into a period.
Speaker 3: Of more stability in the supply chain. You know, engines
Speaker 3: are late, planes are a bit late, and we're seeing
Speaker 3: a recovery. But the tariffs, no doubt will make it
Speaker 3: will have an impact on the price of goods, the
Speaker 3: price of transport, you know, changes of production. But these
Speaker 3: things take time. They don't adjust overnight. So now I
Speaker 3: think we're just gonna have to see how it settles
Speaker 3: and then people adapt.
Speaker 1: Relatively qu But it sounds like you're also telling me
Speaker 1: you've got to deprioritize the US.
Speaker 2: Is that is that fair?
Speaker 1: No?
Speaker 3: And you know for us, it's it's not even a possibility,
Speaker 3: you know, neither do we want to do that. It's
Speaker 3: virgin Atlantic. We always say it wouldn't be virgin without
Speaker 3: the Atlantic. Sixty to seventy percent of our capacity is
Speaker 3: to the United States, it's our more profitable and are
Speaker 3: more successful. And no, I don't think we need to deprioritize.
Speaker 3: Having said that, you can see the growth into India
Speaker 3: we've announced, of course, we started flight to Saudi Arabia.
Speaker 3: We're going to start a flat into Seoul next year.
Speaker 3: In March, Cancun is coming. We launched Toronto. So a
Speaker 3: balanced approach is the right approach.
Speaker 1: Okay, but there is an emphasis. I best you and
Speaker 1: I had the same conversation with him, your good friend.
Speaker 1: He was talking about he sees the bit he's got
Speaker 1: one hundred years, you've got twenty five years. He sees
Speaker 1: the next hundred years as being outside the United States.
Speaker 1: It's being the growth opportunity. Is the growth opportunity outside
Speaker 1: of the United States.
Speaker 3: Now look first forty years of Virgin Atlantic, twenty five
Speaker 3: years of flying into India, and yes, yeah, yes, there
Speaker 3: is there is growth. There is growth in India, and
Speaker 3: that's why we bet on it. Actually, in twenty nineteen,
Speaker 3: we looked at our portfolio and figured that we could
Speaker 3: really only support one amazing growth market and made a
Speaker 3: bet on India to the detriment of other locations, including China.
Speaker 3: It happens to be that the bet seems to be
Speaker 3: working out. We now have five daily flights into Mumbai,
Speaker 3: Bengaluru and Delhi. With our partnership with Indigo, we connect
Speaker 3: into thirty six domestic destinations.
Speaker 2: So the sky is the limit.
Speaker 3: And when Indigo is now flying into Manchester into Skipoll,
Speaker 3: we can connect these passengers.
Speaker 2: Forty percent of the passengers.
Speaker 3: Flying out of India connect onwards either in the UK
Speaker 3: or the United States. So I think it's really about
Speaker 3: the connectivity, it's about the partnership with other airlines, and
Speaker 3: of course it's a betting on fast growing markets, which
Speaker 3: is India not China.
Speaker 1: Though essentially the world needs to be shifting. This is
Speaker 1: now maybe just because we're all here, but this is
Speaker 1: being perceived as being the big growth market. India is
Speaker 1: the growth market. China is not the growth market. Am
Speaker 1: I looking at it the right way? I wouldn't write
Speaker 1: China off.
Speaker 3: You know, it's still the second largest economy and there's
Speaker 3: a long way for India to catch up to China.
Speaker 3: But I think in terms of momentum, the momentum is
Speaker 3: very much here.
Speaker 2: It's palpable. You can feel it, you can see it,
Speaker 2: and you can hear.
Speaker 3: The conversations if it was an outsourcing conversation in the
Speaker 3: past and the technology sector, it's now potentially a manufacturing
Speaker 3: aided by of course, trade deals, aided by tariffs which
Speaker 3: rebalanced the world economy.
Speaker 2: So I've got to catch up. Nice to see you.
Speaker 2: Thank you.
Speaker 1: Sort to get my dates wrong, but you corrective as
Speaker 1: a so I will as the CEO of Virgin Atlantic,