Virgin Atlantic CEO Shai Weiss Talks 'Momentum' in India
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Bloomberg Audio Studios. Podcasts, radio, news. We are joined now by Shai Weiss, who is, of course, the CEO of Virgin Atlantic. Nice to see you. Nice to see you, Guy. You told us a few weeks ago that there was some softening in the North Atlantic. What's going on now? I think it's a common question. I think since...

Tariffs were announced on the 2nd of April and until the state execution on April the 9th, we have seen some softening, but it's rebounding a bit. It's hard to determine what the slope of the rebound is. What does it look like right now? Yeah, so improving versus the April period.

premium strong leisure a bit weaker and really concentrated in the united states um i think a bit of uncertainty um clarity when you say concentrate what do you mean you mean u.s travelers coming into europe that's right okay i think is that a dollar related story or is that i don't think it is i think it's literally an uncertainty related story and you know travelers like certainty whether you're a business or a leisure whether you're going to meet family or friends

You just want to know that things are just going to be as you expected them to be in terms of your savings. What are you spending your money on? It has improved a bit. I think you've heard the theme across a bit of weakness, a bit of softening, I would say, in the yield side of things. So volumes are there. It's a bit of price, but it's improving day by day right now.

How much room have you got on price? Is the fuel helping? How quickly can fuel help? Fuel is very stable at $65. The pound is a bit stronger versus the dollar. So all these things in the balance help airlines. But fundamentally, we need strong demand to continue, which we're seeing that emerge after a very strong start to the year. Was there any effect off the UK-US trade deal? Did it...

in any way meaningfully change that degree of uncertainty? I'm going to be kind on the US-UK trade deal. I think actually we're in India. More significant is the India-UK trade deal. We're now at the fourth largest economy here in India.

For us, it's 25 years of flying here, a million seats. We've really grown 350% over the last five or six years. I think this is more meaningful as India moves from just a service economy to a manufacturing economy. This is really significant for the UK. You have three main airlines.

Virgin India. You got Virgin Atlantic, that was the priority. You're saying that now-- I think, but you've known, we've just announced actually yesterday a partnership with Indigo, together with our partners Air France and KLM. This is really about taking account of the strength of our joint venture and expanding it. How big could this market be?

You know, there are about 4.5 million passengers a year to the UK, about 7 million passengers to the US. Less than 10% of the population here have a passport. I think this can be very, very big. Okay. So this could be a very big market. I want to take you back just to the US for just a moment. Do you get a sense that the uncertainty is we just don't know what is going on? But do you think – I'm trying to isolate which factors are the most important at the moment –

But is traveling to the U.S. just more difficult now, more nerve-wracking? Especially out of Europe, we've heard that there is some negative feelings towards the United States. Of all the countries in Europe, and I count the U.K. in Europe, we are the least impacted. People love traveling to the U.S., whether it's for business, of course, New York, San Francisco, Los Angeles, but also to Florida. So I think the operative word here is sentiment. Travel in operative

all its types is impacted dramatically by sentiment and certainty. Inward investment, just what are the rules of the game? And I think we're just waiting to see what happens in July after the 90-day pause on tariffs is.

But I already see that people, even in this period, they adjust very quickly. And we're seeing a rebound in volumes and in price affect all types of travel. In terms of the other story that I'm hearing around the halls here is that costs are going up, that tariffs do actually mean higher prices for spare parts, for engines, for you name it. How inflationary do you think it could be?

Look, this is a question really for the economists, but they have... Aviation CEOs are basically economists. You have to be economists. You have to be economists. You're not going to let me off the hook on this one. Okay, so I'll take the question and answer it. I think it's fair to say that prices have gone up, of course, over the period through the pandemic. We're entering into a period of more stability in the supply chain. You know, engines are late, planes are a bit late, and we're seeing a recovery, but...

The tariffs no doubt will make it, will have an impact on the price of goods, the price of transport, you know, changes of production. But these things take time. They don't adjust overnight. So now I think we're just going to have to see how it settles and then people adapt relatively quickly. But it sounds like you're also telling me that you're going to deprioritize the U.S. Is that fair? No. And, you know, for us, it's not even a possibility. Neither do we want to do that.

it's Virgin Atlantic we always say it wouldn't be Virgin without the Atlantic 60 to 70 percent of our capacity is to the United States it's our more profitable and our more successful and no I don't think we need to deprioritize but having said that you can see the growth into India we've announced of course we started a flight to Saudi Arabia we're going to start a flight into Seoul next year in March Cancun is coming we launched Toronto so a balanced approach is the right approach okay but there is an emphasis Ed Bastian I had the same conversation with him

Your good friend, he was talking about, he sees the big, he's got 100 years, you've got 25 years. He sees the next 100 years as being outside the United States as being the growth opportunity. Is the growth opportunity outside of the United States now?

Look, first of all, 40 years of Virgin Atlantic, 25 years of flying into India, and yes, there is growth in India, and that's why we bet on it. Actually, in 2019, we looked at our portfolio and figured that we could really only support one amazing growth market and made a bet on India to the detriment of other locations, including China. It happens to be that the bet seems to be working out.

We now have five daily flights into Mumbai, Bengaluru and Delhi. With our partnership with IndiGo, we connect into 36 domestic destinations. So the sky's the limit. And when IndiGo is now flying into Manchester, into Schiphol, we can connect these passengers. 40% of the passengers flying out of India connect onwards, either in the UK or the United States. So I think it's really about the connectivity. It's about the partnership with other airlines. And of course, it's a betting on fast growing markets, which is India.

Not China, though. It's interesting that the world seems to be shifting. This is now, maybe just because we're all here, but this is being perceived as being...

the big growth market. India is the growth market, China is not the growth market. Am I looking at it the right way? I wouldn't write China off. It's still the second largest economy and there's a long way for India to catch up to China. But I think in terms of momentum, the momentum is very much here. It's palpable, you can feel it, you can see it. And you can hear the conversations. If it was an outsourcing conversation in the past in the technology sector, it's now potentially a manufacturing aided by

of course, trade deals aided by tariffs, which rebalance the world economy. Shai, great to catch up. Nice to see you. Sorry to get my dates wrong, but you corrected me, as I am. Shai Weiss, the CEO of Virgin Atlantic.

Let's talk about.

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