Virgin Atlantic plots blitz on British Airways after oil gamble pays off Business

Virgin Atlantic covered half of its fuel costs at an equivalent of $90 a barrel soon after, according to industry sources.

With oil hitting nearly $140 last week – and some analysts are warning it could still climb well above $200 as Vladimir Putin steps up his attack on Ukraine – the move is expected to lower the oil bill. Virgin Atlantic fuel of tens of millions of pounds.

Fuel is usually an airline’s largest single cost, some equate running an airline to running an “oil company with wings”.

Some airlines have been caught off guard by soaring oil prices after failing to cover costs. Low-cost airline Wizz Air was forced to reverse its policy of not covering fuel last week to avoid racking up big losses.

Transatlantic routes have always been BA’s most lucrative routes. Operating services to North America has vindicated the British flag carrier operating other flights with negligible or negative profit margins.

There has been little love lost between BA and Virgin Atlantic over the past four decades. Sir Richard started the airline in 1984 to challenge BA and “make flying fun again”.

Both carriers were then embroiled in the “dirty tricks” scandal in the 1990s, where BA was accused of trying to poach customers from Virgin Atlantic.

In 2012, Willie Walsh, then boss of IAG, bet Sir Richard that his airline would be bankrupt within five years, and would take “a knee in the groin” if he was wrong.

After being strapped for much of the pandemic, Virgin Atlantic now has nearly £500million in its coffers, sources have said.

And by running the same capacity as in 2019 with seven fewer planes, bosses are believed to be confident that a long-awaited return to profitability is on the cards.

In May, Virgin Atlantic will begin flying to Austin, the first time it has launched a new route in seven years.

Airlines consider the removal of all obstacles to travel to be paramount. Transatlantic carriers are bracing for an announcement from US aviation authorities later this week in which Washington is expected to drop the requirement for passengers to complete forms before departure.

A face covering requirement on transatlantic flights is set to be dropped in mid-April, but could still be pushed back by the Biden administration.