John Grant, Partner at MIDAS Aviation, notes that Virgin Atlantic’s announcement that they will drop services to St Lucia has probably come after a serious game of airline/destination poker as the requirement of an inevitable revenue guarantee that supports such services came around for renegotiation. But with St Lucia also served by British Airways is this a case of pragmatic acceptance by Virgin that perhaps a three times weekly service just wasn’t worth the investment and ensuring a daily service crucial.
As the table below shows, St Lucia was hardly a Caribbean star for Virgin Atlantic. On a revenue per hour basis the LGW – UVF service has been the poorest performing sector to the Caribbean for Virgin by some distance and whilst US$ 16.7 million route revenue is not to be dismissed, the contribution would seemingly always require some form of subsidy and support.
Table 1 – Virgin Atlantic Selected Caribbean Route Revenues May 2018 – April 2019
Source: OAG Traffic Analyzer
And interestingly with some US$14.5 million of the route revenue being generated from the UK area of sale and only US$ 821,468 from St Lucia that amounts to around US$ 2,053 originating from the destination market each flight; equivalent to around 3 passengers!
Jim Hepple is an Assistant Professor at the University of Aruba and is Managing Director of Tourism Analytics.