Virgin Atlantic CEO warns inflation will drive higher costs, fares in 2022

Supply chain challenges, rising labor costs and the price of flying more sustainably will be felt keenly by Virgin Atlantic Airways this coming year, and passengers will foot the bill. CEO Shai Weiss also warned that higher inflation is here to stay. “Inflationary costs, and containing them, is a major risk not just for an airline but to everyone in the industry right now,” Weiss said. “I’m assuming we will need to pass some of it on in the form of prices.” He added that inflation is likely to persist for another year. Weiss added that “all of us need to become more efficient.” However, Virgin Atlantic is a carrier that’s become as lean as possible during its fight for survival during the pandemic. It laid off 45% of its employees, reduced its cost base by more than $400 million, and secured a $1.6b rescue deal. Last month it added $530m from both the Virgin Group and Delta Air Lines. “We’ve gone further than any other airline to ensure we’re fit for purpose for the future, and future volatility,” Weiss said. Agility will be essential in the coming year in the face of the Great Resignation too. The tight labor market means wages will rise in the fight for talent. Weiss said 4.5 million people quit their jobs in December alone. “That gives you the scale of the issue. It’s not going to go away in the next few months.” The CEO was also quizzed on how the aviation industry could afford to deliver on its pledge to become greener.<br/>