Virgin Atlantic Cargo’s freight volumes rose 1.8 per cent in 2016 helped by a strong second half of the year and high peak season, with revenue of £174 million ($218.4 million).
The airline carried 218,000 tonnes but says growth was offset by price pressure driven by overcapacity in the market and weakness of the pound, though December’s performance was strong with volumes up five per cent year-on-year and revenue 16 per cent above target.
Virgin’s load factor of 64 per cent is above the industry average supported by increased pharma and e-commerce business, notably to and from the US, helped by the transatlantic joint venture with Delta Air Lines.
UK routes to New York, Boston, Chicago, Detroit, Atlanta, Los Angeles and San Francisco saw strong growth, as did Dubai, and flights from the US to London and Manchester also performed well. Virgin says it also saw double digit increases in Delhi and Lagos.
Virgin Atlantic senior vice president for cargo, John Lloyd says: “2016 was a challenging year for a whole variety of reasons. The impact of overcapacity on yields and the falling value of sterling were major factors and we also saw a reduction in revenues due to route changes driven by passenger demand.”
“The second half of the year was much stronger, particularly for business from the UK, and it ended with a welcome pre-Christmas peak season which resulted in some improvement in average yield. We expect to see some more stability return to the market this year.”
Virgin Atlantic Cargo is starting daily Heathrow-Seattle in 2017, as well as weekly Gatwick-Varadero, Manchester-San Francisco, Boston and New York JFK flights.
It ordered 12 Airbus A350-1000s in 2016 with deliveries expected from early 2019, and the new aircraft will offer 10-22 per cent more lower deck cargo capacity depending on configuration.