Virgin Travel scales back internet operations

LONDON - As rumours swirl about Virgin Blue bringing a low-cost airline to New Zealand, Sir Richard Branson's Virgin Atlantic is poised to announce a major overhaul of its Virgin Travelstore travel agency unit.

The British company will cut back its internet operations and integrate them more closely with the offline business.

The Virgin Travelstore brand, which was launched in December, will remain, but the company will no longer sell package holidays from its site.

"The amount of money invested in the technology is not proportionate to the bookings coming in," said Peter Davies, newly appointed Chairman of the Virgin Retail Travel Group, as the integrated unit is known.

"We want to redefine our use of the web and use it as a shop window, driving people through to our call centre to book."

The new entity effectively merges Virgin Travelstore online operations with Worldwide Travel and Virgin Zone, the Virgin Megastore travel concessions.

This latest move caps a year of upheaval for Virgin Travelstore.

The unit's previous managing director, Ian Brooks, left the company after less than a year in November, prior to the launch of the service in December.

His replacement, Ed Sims, spent an even shorter time in the job, leaving the firm after less than four months.

The company has already cut 12 staff at its Leicester Square headquarters in central London. A reduced staff of 20 will now manage the business from new offices in Victoria, with other operations being run from the company's call centre in Norfolk.

However, Virgin Travelstore has said it will press ahead with plans for an interactive TV channel on Sky Digital, details of which are expected to be unveiled later this week.

"The TV thing is going to be enormous," said Mr Davies.

- INDEPENDENT