News / Virgin Atlantic Cargo: we're more mature, tech-savvy and customer-focused

Photo: Virgin Atlantic

It’s a calmer, quieter, more mature Virgin Atlantic Cargo, these days. The noisy marketing has levelled off, the daring innovation it showed during the Covid era, when it filled its passenger aircraft with cargo and introduced a new network, has been replaced by a customer-focused discipline, according to Phil Wardlaw, who has been managing director for two years. 

And, he says, the new focus has started working. 

“Tonnages were down quite significantly in certainly the latter half of 22, and then throughout 23. Then Q4 in 2023 was really, really strong, and that did see us return back to 2019 tonnage levels” – a level he wants to retain this year. 

“Building out our budget for ‘24, it gave us some confidence that actually what we were predicting was in line with 2019 tonnages. It gave us some confidence that we were going to be fairly close to the mark.” 

But, he adds, “it’s an unpredictable world at the moment.” 

An executive at a direct rival told The Loadstar they noticed Virgin in the market less these days. But Mr Wardlaw says the carrier has been busy in the background, working with customers. 

“I think we did a lot of really good stuff in the second half of ‘23, getting back in front of our customers, building back those relationships was a key part of that. We also implemented the digitalisation of our businesses, and being able to expand that customer reach through those channels, I think is really starting to pay dividends now.” 

Virgin, alongside its own booking system, myVS, which launched in May, last year also signed up to cargo.one in June, a platform that has been famously courting the carrier for several years. The aim – “a stretch aim” – was to reach 20% of bookings online by the end of 2023, a target achieved in November. 

“The rollout plan was to have limited regions on those platforms to begin with. So to get to 20% digital sales within six months, I think was an amazing achievement.” 

(It is the way the market is going: Freightos saw 53% more transactions than in 2022 on its WebCargo platform last year) 

And Virgin plans to extend booking options for customers. It picked cargo.one first because of its strength in certain regions where it wanted to be more prominent, but is shortly to announce another agreement, after it has finalised contract terms, says Mr Wardlaw. 

“We see the likes of Cargo.ai and WebCargo being strong in other markets, so we’re certainly exploring with those two. Beyond that, there is potential for a fourth platform.” 

The aim is to increase reach where the carrier is not as strong with its myVS channel. 

“We see real strength around the UK, South Africa, China, India. But then we want to utilise the third parties where our presence isn’t as strong, and use their presence to drive incremental volumes.” 

Rates will be the same across all channels, he says, and the aim is for 40% of sales to be online by the end of this year. 

But he adds: “The whole premise of our omnichannel strategy is to allow our customers to interact with us the way that they want to, rather than us forcing our strategy on them.” 

But Virgin has another sales strategy it would like to see: selling across its partners, Delta and Air France-KLM Cargo. 

“We’ve certainly explored that possibility. No one’s out there doing it from a JV point of view at the moment, but it’s one of our longer-term plans. How we could offer capacity together in a digital world is something we’d like to explore. We are also offering joint RFP responses as well, where it suits the customers.

“We’ll always ask the customer if that’s something we’re interested in, taking those joint networks and building that out. And that’s something we’ll continue to do.” 

That would certainly benefit both carriers and customers: Virgin has one of the smallest networks of the international carriers, and is heavily passenger focused. It has some 10 major cities in the US on its network, and in Asia, it has Shanghai, Delhi and Mumbai. Next on the list, for March, is Bengaluru – “really, really exciting for us”. 

“We are building out on what is already a really strong Indian network, and we’ve got some high hopes and some really good plans for that destination. It’s really strong on the passenger side, and there are high expectations for the good strong tech market there.” 

In addition, Virgin is adding frequencies to Boston and New York – and has relaunched its freighter operation out of Brussels to Heathrow, a lane it initially started using a Titan A321 freighter, but which now uses DHL capacity.

“That was really strong for us in Q4,” says Mr Wardlaw. It relaunched the route on January 14, once a week, bringing goods such as pharma from Europe into its network out of London, and is expected to operate all year round. 

Mr Wardlaw says he has yet to see any demand as a result of the Red Sea crisis, but that the team has been “asking ourselves that question a lot”. 

“We’ve had good flows with our India network, so we do expect to see strength from India, certainly coming through into the UK. Should the crisis last long enough, and has the effect that we think it might have, then we’re well-positioned to take some of those flows from India, but also our Shanghai services. We’re only seasonal from Dubai, and end the service in March. so depending how quickly that effect does take place we think we might see some flows through the Middle East.” 

East to west flows for the carrier include garments, pharma, valuables, “and a lot of e-commerce”. 

At the moment, only its pharma, fresh and general cargo can be booked online, but other products will be moving onto the booking channels, including e-commerce. 

Phil Wardlaw

“Customers want a more differentiated proposition, in terms of product portfolio. They want to be able to guarantee and get certain service levels you wouldn’t necessarily get from a general cargo product. So, our product portfolio strategy has been driven by customer desire for a particular product.  

“We have an excellent reputation in the industry for our operational performance, and therefore if we can differentiate across those service levels, that’s our product portfolio strategy.” 

But e-commerce is harder to differentiate, he explains.

“Our current e-commerce product is industry standard, but we do it probably better than anyone else. What I do want to do this year is see how we could differentiate it further with potential additional services; that’s something I’m really keen to explore. It’s starting to burgeon in the market.  

“I’d like to see if we could take Virgin Atlantic Cargo to a really interesting place and offer something that perhaps others aren’t offering in the market when it comes to e-commerce. We’re in the really early stages of developing that.  

“But I can’t say to you, even if I wanted to, what that means. It’s kind of a theory that’s bouncing around in my head. I think by the middle of the year, we’ll have a clearer idea about what that could mean.” 

Another plan is to move into dynamic pricing via its Voyager technology, which currently deals with revenue and inventory management. The carrier is working on a proof of concept to help it move into a dynamically priced solution for online bookings. 

“That’s something really interesting, and we’re also going to explore direct customer connectivity. We are testing the appetite with some of our major customers about how interested they are in that as a proposition, what it means to them and whether, therefore, we take that forward.  

“I think we are just on the cusp of some interesting API-type connectivity solutions that allow customers direct access to our inventory systems and booking systems, which would drive productivity, because customers can go in through one portal and see inventory there, without having to switch between different supplier portals.” 

The disciplined focus on customers is going to stay, promises Mr Wardlaw, who says Virgin is now a different sort of carrier. 

“I think we’ve been a lot more personal with our customers, a bit more grown-up, and we are interacting with customers in a way they want to be interacted with. We have matured. 

“I think we’ve got a really strong foundation. So, other than the geopolitical risk, I think we’re in really good shape for 2024 and beyond.”