By Vladimir Guevarra
LONDON--Virgin Atlantic Sunday said that Chief Executive Steve
Ridgway is stepping down after 23 years with the trans-Atlantic
carrier, leaving an unenviable task to his successor as the U.K.
airline grapples with high fuel prices, tough competition, and a
sluggish British economy.
Virgin Atlantic, 51%-owned by Richard Branson's Virgin Group and
49%-held by Singapore Airlines (C6L.SG), recently lost a key
business partner after losing out to International Consolidated
Airlines Group (IAG.LN), the parent company of its arch-rival
British Airways, in the bidding for regional U.K. airline bmi Ltd.
Bmi, whose previous owner was Deutsche Lufthansa AG (LHA.XE), had
provided Virgin Atlantic with connecting traffic under a
now-defunct code-sharing agreement.
Virgin Atlantic, which flies 5.5 million passenger a year, said
last month it would start operating flights between Manchester in
the north of England and London from early next year.
The departure of Mr. Ridgway, 62, comes amid a big shake-out in
Europe's airline sector this year as high fuel costs and growing
competition on domestic and regional routes from lower-cost budget
carriers have contributed to the financial collapse of a number of
small airlines and left many of the region's major flag carriers
nursing steep losses.
Business consultancy PricewaterhouseCoopers recently identified
some 50 airlines, including Virgin Atlantic that are in what it
called the "squeezed middle" of small or mid-sized carriers facing
the threat of losing market share or being bought by stronger
players.
"I've seen many great times and a few bad, and have always
remained firm that we must offer something different to that of our
competitors," Mr. Ridgway said in a statement Sunday.
Mr. Ridgway said he will lead the search for his successor who
will likely be in place sometime early next year.
The airline's Chief Commercial Officer Julie Southern would be
"a likely leading internal candidate" to replace Mr. Ridgway, an
industry source told Dow Jones Newswires.
A spokesman for Singapore Airlines declined to comment on Mr.
Ridgway's resignation and possible replacements.
The Sunday Times reported that outgoing Air New Zealand (AIR.NZ)
CEO Rob Fyfe could be an external candidate to replace Mr.
Ridgway.
Mr. Ridgway joined Virgin Atlantic in 1989. He has been at the
helm of Virgin Atlantic as CEO since 2001.
Write to Vladimir Guevarra at vladimir.guevarra@dowjones.com.
Twitter: @Vlad_DowJones
(Gaurav Raghuvanshi in Singapore contributed to this article.)
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