Virgin Atlantic Says New Entrants Across The Atlantic Will Find New York - London Heathrow a Challenging Route

SOUTH NORWALK, Conn., March 3 /PRNewswire/ -- Virgin Atlantic, one of the world's leading long-haul airlines, today warned that the new entrants to the US-UK market will find existing Heathrow carriers are more than ready to do battle. The transatlantic market is already one of the most competitive aviation markets in the world, and more competition will open up when phase one of the new Open Skies Agreement comes into effect on 30 March this year. The agreement enables US carriers to fly between European cities. However, European carriers aren't yet allowed to fly between two US cities.

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Phase one of Open Skies will automatically end if there is no progress on phase two, which is due to be in place by 2010. Individual EU member states each have the power to cause the agreement to lapse if they vote against the next stage, which would enable EU airlines to own and control US carriers.

Lyell Strambi, Chief Operating Officer for Virgin Atlantic, said today:

"Open Skies will not bring any sweeping overnight change, because new entrants to Heathrow face the same formidable task of obtaining slots that holds back Virgin's growth. Fares can't get much lower, as airlines are already offering economy tickets at their lowest levels for years."

"Any new carrier operating on transatlantic routes will find it difficult to gain a toe hold. Operations into and out of Heathrow are challenging, as it remains one of the costliest and most congested airports in the world. Furthermore, airlines such as Virgin Atlantic have been heavily investing in facilities which speed up check-in on the ground -- the new battleground for customers. Those carriers who enable their passengers to seamlessly move through the airport, through private security channels and rapid check-in processes, will win a greater share of the market compared with airlines which are unable to offer a speedy and efficient service. Consumers will take a flight to quality."

"Business class capacity on the lucrative London to New York routes has grown over 40% in the last two years. With Open Skies starting, there's a real danger that there will be too much capacity for too little demand."

"Ultimately, unless the US agrees to phase two of Open Skies, and lets European carriers bring better quality products to services between US cities, then the new entrant airlines face the prospect of Heathrow access being denied, as phase one will be unwound. Only a totally liberalised market will give consumers the power to choose the best quality at the best price."

Virgin Atlantic anticipated the beginning of the Open Skies agreement by launching a new daily London Heathrow-Chicago service and a sixth daily London Heathrow-New York service. It also opened its new Terminal 3 at Heathrow just three months ago, providing a smooth check-in experience for all passengers.

 For further information, please contact the Virgin Atlantic Press Office at

               203.750.2570 or log onto www.virginatlantic.com

    About Virgin Atlantic
    -- Virgin Atlantic is one of the world's leading long-haul airlines
    -- It flies to 30 destinations worldwide from its main base at London
       Heathrow and London Gatwick
    -- There are 38 aircraft in its fleet, comprising 747-400s, A340-600s
       and A340-300s
    -- Sir Richard Branson is the President of Virgin Atlantic; Steve Ridgway
       is the Chief Executive Officer; and Lyell Strambi is the Chief
       Operating Officer.
    -- In 2007, Virgin Atlantic carried around 6 million passengers