Virgin sues partner over claims about its brand value

Sir Richard Branson’s Virgin Enterprises is suing a US rail company for $251m (£182m) over its decision to drop the Virgin name from its trains. 

It had a 20-year licensing deal which allowed Brightline to rebrand as Virgin Trains USA in exchange for royalties. 

Virgin claims Brightline is reneging on the agreement by spuriously claiming the Virgin name has been damaged. 

The suit said Brightline claimed Virgin is no longer “a brand of international high repute” following the pandemic.

Virgin said it has maintained its status as an internationally reputed brand, and described the allegation that the Virgin brand had been damaged as “cynical and spurious”. 

In 2018, Virgin struck the licensing deal with Brightline, which operates a train service between Miami and West Palm beach in Florida, with plans to extend the line to Orlando, the home of Disney World. 

Its existing service was suspended in March 2020, and isn’t expected to resume until later this year. 

Brightline is also planning a route between Apple Valley, near Los Angeles and Las Vegas.

Difficult year for Virgin

The train operator first signalled it might scrap the deal in April, when the Covid-19 pandemic hit the Virgin Group’s travel-focused businesses.

Virgin Atlantic airlines cut thousands of jobs as part of a $1.7bn rescue plan. 

Mr Branson even offered to use his luxury island resort as collateral to help secure state aid for Virgin Atlantic. 

The group also delayed the launch of its first cruise ship, and its gyms and hotels were closed. 

Virgin contends that Brightline cannot lawfully scrap the contract until 2023 at the earliest, and even then it would have had to pay an exit fee. 

The company is suing for $251.3m, which it claims would cover the royalties it should have received up to this date, plus the early termination fee.

Virgin joins Tui and Thomas Cook in cancelling holiday bookings

Virgin Holidays has become the latest travel firm to cancel holidays after new coronavirus lockdown restrictions were imposed.

It said schedules will be cancelled until mid-February, joining similar moves by Tui, Jet2 and Thomas Cook.

The companies said customers would be contacted about their future travel options during what Virgin described as “these extraordinary circumstances”.

Thomas Cook said it will call customers to offer refunds or rebooking. 

Tui said it was “cancelling all holidays in line with international travel restrictions”. It added that said customers due to depart from England, Scotland and Wales would be contacted to discuss options.

The company said that customers due to travel from an English airport before mid-February, or from a Scottish or Welsh airport up to 31 January, would not be able to do so.

Those customers will be contacted “in departure date order to discuss their options”, Tui said, which include rebooking “with an incentive”, getting a credit note, or a full refund.

“Customers currently overseas can continue to enjoy their holidays as planned and we will update them directly if there are any changes to their holidays,” Tui added.

St Lucia
image captionTui cancelled a flight to St Lucia on Tuesday

In a statement, Virgin said: “In line with the new national lockdown restrictions we have reviewed the upcoming holiday schedule and will be cancelling all holidays up to and including 14 February 2021. 

“To simplify the options and to provide immediate peace of mind for customers whose holidays will no longer be going ahead, we’re automatically providing a digital voucher for the value of their trip, redeemable up until 30 September 2021, which they can use to rebook a holiday, departing any time before 31 December 2022.”

Virgin added that customers “may also request a refund”. 

Meanwhile, Jet2 said it was extending “the suspension of flights and holidays up to and including 11 February 2021”.

A spokesman said: “For customers due to travel from 12th February onwards, we will provide another update closer to the time.”

Thomas Cook, which became an online-only travel brand in September after its earlier collapse, said: “Following the announcement of the latest lockdown, we are calling our customers to offer refunds or move their holidays to a later date.”.

Chief executive Alan French said: “We’ve seen over the festive period that customers are looking ahead to the summer and beginning to book in earnest for those important summer weeks in the sun.

“I am sure that after many more weeks spent at home – and with the progress of the vaccine rollout – we will see an even bigger demand for people to escape to the beach this summer.”

Last month, a number of countries suspended routes to the UK due to the rapid spread of a new variant of coronavirus.

The blanket travel ban to the EU was then lifted, but with rules varying from country to country. The suspension of flights between the UK and China remains in place.

Last year Tui was investigated by competition authorities after complaints that it had not given prompt refunds.

As of Tuesday afternoon, British Airways Holidays was still offering holidays to Barbados and St Lucia on its website. 

The company didn’t immediately respond to a request for comment from the BBC

Broadband: Virgin to offer hyper-fast speeds in parts of Wales

Hundreds of thousands of people will have access to hyper-fast broadband after Virgin Media said it would bring its gigabit service to Wales.

The service will be available to people in parts of Cardiff and some nearby counties in south-east Wales. 

The telecoms firm said customers would be able to receive speeds 18 times faster than average in Cardiff. 

A plan to get gigabit broadband in every home by 2025 was rolled back by the UK government last week.

Parts of Rhondda Cynon Taf, Caerphilly, Vale of Glamorgan, Bridgend and Neath Port Talbot will also be able to get faster speeds.

The new broadband would allow users to download 4K films or very large files almost instantaneously.

However, the village of Pennant, near Llanbrynmair, Powys, had the slowest broadband in Wales, according to technology comparison website Uswitch. 

Average download speeds there were 0.86Mbps, and it would take about 17 hours to download a two-hour film there, Uswitch said. 

Jeff Dodds, from Virgin Media, said: “At a time when our services play a vital role in supporting people’s lives and powering the economy, Virgin Media is continuing to invest and as a result our gigabit footprint is growing like gangbusters.”