Virgin Atlantic Delays Buying Airbus A380, Monitors Boeing 787

Virgin Atlantic Airways Ltd. has delayed buying the Airbus SAS A380 superjumbo jet as it studies whether it wants the plane and focuses on introducing its first Boeing Co. 787 Dreamliners due in September 2014.

Virgin, an initial customer for the Airbus flagship plane, has ordered six and “deferred them yet again,” Virgin Atlantic Chief Executive Officer Craig Kreeger said today at the Royal Aeronautical Society in London. The double-decker jet is now due in 2018 rather than 2017, he said.

The carrier, based in Crawley, England, is looking to new planes, including the 787 Dreamliner, to reduce fuel consumption as part of a turnaround effort to end two years of losses that Kreeger called “not sustainable.” Buying the A380 would add significant capacity, though.

“It’s hard but not impossible to see a world where we want to take the aircraft,” Kreeger said. “It’s not a clear choice.”

Virgin also is in close contact with Boeing over operating problems with the 787, including a three-month grounding this year because of overheating lithium-ion batteries and a fire on an Ethiopian Airways jet at London Heathrow on July 12.

“We can’t ignore the technical issues Boeing has faced,” Kreeger said.

Virgin doesn’t get its first Dreamliner, the larger 787-9, until September 2014, and so far the delivery schedule hasn’t been affected by current problems with the smaller 787-8 version, Kreeger said. Boeing will have fixed the 787’s glitches by the time Virgin gets its first plane, he said.

Delta Venture

As part of its turnaround plan, Virgin also is pursuing a joint venture with Delta Air Lines Inc., which holds a 49 percent stake in the U.K. carrier, to boost revenue. Regulatory approval for the tie-up, which will expand a codeshare agreement that took effect this month, should be completed before year-end, Kreeger said.

The agreement expands Virgin Atlantic’s network to 45 U.S. destinations and should help it use Delta’s ties to travel agents and corporate booking organizations to boost sales, he said. The airline is trying to become less dependent on revenue from the flat U.K. market, he said.