How Virgin Atlantic Failed To Create A Low Cost Carrier In The 80’s

LLC’s or Low-Cost Carriers may seem like the new modern easy way to travel around the world, but one has to wonder why only now you can buy a flight across the Atlantic for only $99. We have had commercial flights for decades, why only now are we seeing this explosion of cheap air travel, where over 50% of all flights between Asia and Europe are operated by LLC’s?

Sometimes, the answer is the most obvious, no one had thought of it!

The first attempts

In the early 1990’s as part of the creation of the European Union, the “open skies” package was introduced, allowing low-cost airlines such as EasyJet and Ryanair to start operations. But before they existed, one eccentric entrepreneur called (Sir) Richard Branson came close.

EasyJet Loyalty
Before Easyjet Virgin came close. Photo: EasyJet

Virgin Atlantic was the new airline on the block and wanted to introduce European domestic routes to ferry more passengers during winter months between their international hub in London Gatwick (for routes on to America) and remote locations that could not easily connect to overseas flights.

This was due to the very competitive landscape in the 80’s, with the large availability of cheap winter flights between the USA and Britain, flights that Europeans on the continent had trouble accessing. By having a filler service, Virgin could guarantee full planes.

They identified one such opportunity as the Dutch city of Maastricht, which they charted a small Vicker Viscount propeller plane to service the route. Maastricht was ideally located at the south-east corners of Holland, for travellers from Belgium and West Germany. This flight suddenly allowed British customers to fly to Germany for only £19 each way, which was revolutionary at the time.

Virgin Atlantic had grand plans for this route, planning to upgrade it to a Boeing 747 (which would then fly onwards to America) if the demand was high enough.

Sadly, after five years of under-performance and little marketing, the service was scrapped.

“There was concern that a low-cost, no-frills airline was detracting from the Virgin brand in the marketplace, We certainly missed an opportunity. It would have been fine for us to have both brands.”
Sir Richard Branson

This, of course, was not the only almost attempt at a no-frills low-cost carrier.

The travel agent super giant Thomson used extra left-over charter capacity to send cheap travellers between London Luton to Belfast in Ireland. But executives did not understand why cheap fares should exist if passengers were willing to buy holiday packages abroad and cancelled the service. They attempted a relaunch 20 years later with the airline Thomsonfly, but failed to understand how to make it easy to fly, having their hub airport of Coventry very difficult to get to.

Even British Airways attempted to build a competitor in 1997 to combat the increasingly rapid growth of airlines Ryanair and EasyJet. They called it ‘Go’.

The airline ‘Go’ could have been used to help British Airways compete on routes that were not earning a profit under their flagship brand, however, they did not understand the concept and sold the airline in 2001. That same airline was then resold again in 2002 to EasyJet for three times as much (£374m).

We came painfully close to having the golden age of air travel 20-30 years earlier, but unfortunately, as luck would have it, we could not see the forest for the trees.