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Sun 26 Jun 2005 04:00 AM

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Virgin to undercut Emirates in air war

VIRGIN Atlantic boss Sir Richard Branson has thrown down the gauntlet to Emirates Airline, promising to slash fares between London and Dubai.

VIRGIN Atlantic boss Sir Richard Branson has thrown down the gauntlet to Emirates Airline, promising to slash fares between London and Dubai.

In an exclusive interview with Arabian Business, Branson said: “We expect to give our competitors a run for their money, especially in the business class market where our Upper Class Suite is expected to pick up a lot of our rivals’ passengers as well as many more awards.”

Services on Virgin Atlantic between London Heathrow and Dubai launch in April 2006 and will be operated with Airbus A340-600 aircraft. Flights to Dubai will start with four services per week and build to daily by mid-summer 2006.

It is believed that on Upper Class, Branson will offer high-end return tickets between Dubai and London for around US$3000, undercutting both Emirates Airline and British Airways by up to US$400 on each ticket. Economy class return tickets between Dubai and London are currently priced at just over US$1000 on Emirates Airline. Sources say Virgin will enter the market at nearer US$700 per ticket.

It is thought that the airline will also offer special holiday deals for passengers also booking hotels, which could bring the price of the actual Virgin Atlantic Upper Class flights down another US$500. A Virgin Atlantic source said: “With the various combinations we are examining, you could save nearly US$1000 by flying Upper Class on Virgin as opposed to business class on Emirates. When you consider that our service includes the widest, totally flat beds on any airplane in the world, and that there is not a single flat bed on any Emirates Airline plane, we think we will be offering a very good deal.”

Branson himself told Arabian Business: “It is an extremely popular and fast-growing route and so we expect to pick up our fair share of the market and do well on the route. There is still huge investment going into Dubai which is expected to continue for many more years so the market will undoubtedly grow further."

He added: “It will be a challenging route as we will be up against a number of carriers including Emirates, one of the best airlines in the world, but Virgin Atlantic has always thrived on competition and we believe our entry into the market is good news for passengers.”

Although the launch of Virgin Atlantic to Dubai is 10 months away, Branson’s team has already started preparing for an “unprecedented” marketing campaign. It is understood that over 300 journalists and VIPs will be flown to Dubai on Virgin Atlantic’s inaugural flight, for a week-long event. Hotel and other bookings are already being made, with Branson planning what friends say will be “a unique publicity stunt” to capture the public’s attention. During a launch of services between London and Las Vegas five years ago, Branson famously parachuted into the city dressed as Elvis Presley.

But Branson can expect a strong fightback from Emirates Airline. Its 73-strong fleet is to grow to nearly 200 by 2012. For the year to March 2004, Emirates Airline recorded profits of US$476 million — the highest of any airline in the world. It has also ordered 45 of the new Airbus 380 superjumbos, a third of the entire order book. However, Virgin Atlantic is now experiencing its best profits for several years. For the year to February 28, 2005, it hit profits of US$125 million, its highest for six years. Turnover increased to US$3 billion from US$2.3 billion last time.

The arrival of Virgin Atlantic in Dubai is expected to pave the way for the launch of several more Virgin-related initiatives, including specially tailored holidays and tours.

The Virgin Group is also considering a longer-term plan to bring its highly rated financial services business to the UAE within the next five years.

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