Virgin Atlantic airlines is making a comeback to Mumbai after a hiatus of three years sensing opportunity on the growing India-UK and India-US markets.
Virgin's move comes six months after Kingfisher Airlines suspended its London flights and its plans to join rival British Airways-led oneworld alliance were put on hold.
Kingfisher's entry into oneworld would have given Virgin's rival British Airways even bigger passenger feed from Indian market would have made it even difficult for Virgin to grab market share.
Virgin, owned by the flamboyant British tycoon Sir Richard Branson, operated London-Mumbai flights between 2005-09. Its return comes at a time when other foreign airlines are cutting down their flights in India or pulling out alltogether citing increase in operating costs and increase in tariff at Delhi airport.
However, Virgin's chief executive officer Steve Ridgway is confident that his airline will be to attract airline passengers from India.
"We had to withdraw our service in 2009 due to the global economic slowdown, but we always said if it was economically viable we would come back. The time is now right, with the Mumbai-London market growing by 9% since 2009, and we’re looking forward to starting our flights next month and serving the people of Mumbai," Ridgway said in an email response to Business Standard queries.
Virgin flies on Delhi-London route at present and is launching Mumbai flight in October end.
Mumbai-London is the second busiest international route from Mumbai and the 12th busiest route from London (a million passengers flew on this route last year, acording to Virgin). Currently, Air India, British Airways and Jet Airways fly five times daily between the cities.
In addition there are Gulf-based and other European carriers who link the two cities making it a very competitive market.
Emirates has eight daily flights between Dubai-London and carries a large%age of fliers on the route.
"The Mumbai-London market is crowded but there is a room for a direct service," said an aviation expert. He added for the last few years four or five airlines from both India and Britain are operating flights on the route.
British Midland airlines was the first to pull out from the route and its place was taken by Kingfisher. And now Virgin is taking space vacated by Kingfisher.
"Yield retention on the route is difficult because of the intense competition. Airlines need to deploy planes with the right seat configuration (260 plus seats) and get 75% loads to retain yields," the expert added.
"Kingfisher flew an airbus A-330 on the route with 217 seats. You can't make a profit with even 95% loads with this configuration," he said.
There is a cut throat competition on the route and Virgin will have a tough time to shake off Jet and British Airways which are well established on route," he added.
Virgin's prime focus remains its premium service and this time the airline is introducing its new airbus A330 plane on the route with 266 seats (33-upper class, 48-premium economy and 185-economy).
Previously it flew an airbus A340 on this sector with 220 seats.
"At the core of our brand is our unique product and premium service. We are a global brand with local relevance... Our cabins, our crew and our service are our biggest differentiators," Ridgway said.
The airline boasts of the longest bed in the business class (upper class) and an on board bar.
"We have one of the biggest market shares between Delhi and London (19% ) We also have the second largest market share (25.1%) between Delhi and Newark and strong growth across cabins, especially in business class," Ridway claimed.