UK long-haul carrier Virgin Atlantic has no immediate plans to join the SkyTeam alliance, despite being part-owned by US SkyTeam member Delta Air Lines and alliance partner Air France-KLM being in the process of buying a stake in the carrier.

“There might be a time when it makes sense,” CEO Craig Kreeger said Dec. 6 at the Aviation Club UK, where he delivered his final public speech before retiring at the end of the year.

Kreeger said Virgin’s deep bilateral partnerships with airlines such as Atlanta-based Delta drive more value than alliance membership.

“That strategy is working fine,” he said.

Once the potential from these partnerships has been exhausted, he said Virgin might consider joining SkyTeam.

Air France-KLM is still going through regulatory clearances to secure its stake in Virgin Atlantic. Kreeger said the process remains on track for completion in the first half of 2019.

He added the Air France-KLM partnership offers “the same kind of benefits” as the Delta deal, such as network, frequent flyer and customer loyalty gains. It will also give access to new technologies and greater scale needed to make the business more effective.

“We see opportunities where we can be better,” Kreeger said.

Turning to other partnerships, Kreeger was asked about the status of negotiations with UK regional airline flybe. In November, Exeter-based flybe said it was seeking a buyer as part of a strategic review, adding that talks have begun with interested parties. At the time, Virgin said it was reviewing its options over a possible flybe bid.

Kreeger described flybe as a “significant partner.” He confirmed that Virgin is actively considering its options but added there is no further update.

Kreeger also believes there is still more scope for consolidation in Europe.

“Consolidation is a word that has lots of different elements to it. We think it is traditionally about acquisitions; we don’t think about consolidation,” he said. “The difference is the rationalization of hub capacity. In the US, we have seen capacity rationalized in a way we have not seen in Europe. Consolidation seems the most likely path to a broadly healthy aviation market.”  

Virgin is in the midst of a fleet transition, shifting from four-engined aircraft in 2011 to an all-twin fleet by 2021. The airline’s first four Airbus A350s will arrive in 2019, with a new look on board, Kreeger said.

Victoria Moores