Virgin Atlantic scales back winter services

Virgin Atlantic has confirmed that it will be cutting capacity by seven per cent this winter, axing all flights to Chicago and scaling back its Hong Kong service.

The airline also issued a warning that up to 600 jobs could go if passenger demand fails to pick up, with CEO Steve Ridgway saying the outlook is "as bleak as ever".

Its gloomy forecast contrasts with high spirits in the Virgin camp last month, when airline bosses placed an order for ten Airbus A330s and announced profits of £68.4 million.

Those takings appears not to have shielded Virgin from the wider economic downturn, however, with the carrier now admitting that cutbacks are inevitable.

Under its new Heathrow timetable, daily flights to Chicago will be axed altogether while one of Virgin's two daily Hong Kong flights has also been suspended.

"Forward bookings are down on last year, and there is less demand," Paul Charles, director of communications for the airline, told the BBC. "People are still travelling but they are not paying enough for their seats, and you can't make money in this climate."

Chief Executive Steve Ridgway gave an even glummer assessment, saying: "The outlook for the industry is as bleak as ever and all airlines are having to shrink their businesses."

The cutbacks amount to an embarassing climbdown for Sir Richard Branson, who just last month claimed that Virgin's order for ten Airbus A330s illustrated its "confidence in the future".

Sir Richard had gloatingly contrasted his airline's fortunes with those of British Airways, which posted annual losses of £401 million and said it was in a "fight for survival".

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