Richard Branson (center), founder of Virgin Atlantic and the Virgin Group, poses for a photo after he arrived on a flight from London to Seattle on Monday, March 27, at Seattle-Tacoma International Airport. (AP Photo/Ted S. Warren)

Smaller, more efficient 787 has been a boon for airlines

SEATAC — Virgin Atlantic started regular service between London and Seattle on Monday, just days after the demise of the glitzy British airline’s U.S.-based carrier, Virgin America.

A Virgin Atlantic Boeing 787-9 is taking over the London-Seattle route from the airline’s U.S. partner, Delta Air Lines. After several years of losses, Virgin Atlantic is back in the black thanks to its partnership with Delta, which has helped feed passengers to the U.K.-based airline’s transatlantic routes.

On Wednesday, Seattle-based Alaska Airlines announced that it is killing off the Virgin America brand, which it bought for $2.6 billion.

Boeing’s 787 Dreamliner, which is assembled in Everett and North Charleston, South Carolina, has been a boon for Virgin Atlantic, the airline’s CEO Craig Kreeger said.

It uses up to 30 percent less fuel than the older Virgin Atlantic airplanes it replaced, he said. “We’ve been thrilled by the 787.”

Virgin Atlantic is taking over the London-Seattle route from Delta, which flew a smaller Boeing 767 on the route. Delta will now put that plane into service for its new London-Portland route.

“We thought a bigger airplane and the Virgin brand might yield better results” for the London and Seattle route, Kreeger said.

Airlines are using 787s to bolster rather than break their hub-and-spoke networks of routes, according to a 2016 report from the CAPA Centre for Aviation, an aviation-industry consulting firm. Nearly all 787 flights are between hubs or connect secondary cities and hubs, according to the report.

Instead of bypassing hubs all together, air carriers are using the efficient 787 to connect smaller, distant cities to major hubs, for example, connecting Austin, Texas, to London.

These new routes would be money-losers for airlines with bigger, long-haul airplanes, such as the 777. The 787’s lower operating costs, size and range turn them into moneymakers for airlines, the report says.

The 787 also has enabled cheap-fare airlines, such as Norwegian Air and Singapore Airlines’ subsidiary Scoot, to elbow into the long-haul market. These airlines’ strategies of offering cheaper international flights would not be profitable without the 787, according to the report.

Airlines are not the only businesses rethinking their strategies because of advanced airplanes.

“New widebody aircraft (such as the 787 and Airbus A330neo) have affected our strategy and thinking for international route development,” Kazue Ishiwata, Sea-Tac International Airport’s senior manager for air service development, told The Daily Herald last year.

The airport is looking to develop new direct flights to secondary cities in China and Southeast Asia, she said.

Sea-Tac has been one of the country’s fastest growing airports for the past three years, according to the Port of Seattle, which owns and operates the airport.

The port is putting $3.2 billion into expanding the airport in the next few years as it looks to welcome even more travelers through its gates.

The Virgin airline empire launched in the 1980s by Sir Richard Branson has struggled in recent years. After more than a decade, the Virgin Group gave up on its domestic U.S. carrier.

Alaska’s announcement to fold Virgin America into its own brand was a shock, Branson said at a press conference at Sea-Tac International Airport on Monday. He expected that “the last thing they would do is to rip the heart out of it, which is effectively seems to be what they’ve decided to do.”

Alaska Airlines still has to pay millions of dollars in licensing fees each year through 2040, he said.

“I just wonder what it was that Alaska bought; you know, why did they bother?” he said.

After tearing into the U.S. airline, Branson added, “I thought I’d be polite, but I decided not to be.”

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com. Twitter: @dcatchpole.

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