UPDATE 1-Virgin refocuses on transatlantic flights in profit quest

Wed Sep 3, 2014 10:14am EDT
 
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(Refiled to add Reuters Instrument Code for Singapore Airlines)

By Sarah Young

LONDON, Sept 3 (Reuters) - British airline Virgin Atlantic is to beef up its core transatlantic services and stop flying to Tokyo, Mumbai, Vancouver and Cape Town, to help it try to reach a level of profitability which has proved elusive for the past 15 years.

The airline, which is 51 percent owned by its founder Richard Branson and 49 percent by U.S. carrier Delta Air Lines , also said on Wednesday it was on track to make an annual profit by the end of this year, after two years of running at a loss.

Virgin said by 2018 it was targeting "record" profitability. The current record was set in 1999 when it posted a pretax profit excluding special items of around 99 million pounds($163 million).

A joint venture partnership with Delta on transatlantic services started on Jan. 1, after Delta bought Singapore Airlines' 49 percent stake in the British carrier for $360 million in cash last year.

The deal has given Virgin the chance to win more U.S. customers, due to Delta's domestic U.S. connections, while Delta gets increased access to the lucrative but restricted London Heathrow market.

"Our relationship with Delta ... makes the transatlantic more attractive than it used to be," Chief Executive Craig Kreeger said in an interview on Wednesday.

Under the intended network changes, Virgin will fly five additional daily transatlantic flights from next summer and Kreeger shrugged off concerns of overcapacity in that market.   Continued...