Starting a thread of constructive ideas on the future of VA.
Essentially, what would you do if you were made CEO of VA to bring it to profitability?
If a quote from a recent newspaper article is correct then substantial change has to occur...
”Virgin has run at a statutory financial loss every year for the past six years, running up total losses of $1.6 billion over that period, and peaking at last year's loss of $653 million”.
I take the view that the logistical structure within aviation is the most important, it is an upside down version of the traditional corporate structure.
At the top are “frontline troops” e.g. tech crew, cabin crew, engineers, ground staff etc. The staff who actually get passengers from A to B. They are the most important staff and as such should be supported and rewarded well for their skills. They also are the best people to tap for advice on further efficiencies within the airline and customer experience.
At the base of this model is the CEO and management heads, they are the “support team” for the frontline troops. They provide whatever’s required for the troops to make the airline run.
So to answer my own question, basically if you’re not doing a job that helps get the aircraft airborne then you’re gone.
Close down the Sydney offices, Tigerairs Melbourne head office etc. Run the airline only from the Brisbane “village” with minimal staff, but not under-staffed.
Purchase the best software available (or design your own) with a simple user portal that all staff can access through company provided iPads. A workforce that is connected and informed. Flight and cabin crew rosters should be simplified keeping the same crew and aircraft throughout their duty where possible. A big reduction in overnight expenses and increase in staff morale.
Employ the best fuel hedgers money can buy, pilfer Qantas’ excellent team if possible.
Outsourcing is problematic in aviation. “In-source” all frontline staff; more expensive but ultimately provides stability, experience and loyalty (teamwork). This includes creating Virgins own catering and tarmac operations company. The staff are employed by VA but available to tender work to other airlines as well.
Approach VA shareholders and look for the best synergies e.g. lobby the Chinese for much greater mainland access and run the A330 to these multiple destinations. Offer our politicians “sweeteners” to help here similar to Qantas.
Tigerair should be a low cost domestic and international airline. Purchase REX Airlines (owned by Singapore/Temasek). REX feeds Tigerair and they feed Scoot or fly directly to Singapore. Purchasing REX would also alleviate some of the recent Qantas/ Alliance purchase pressure.
These are just some ideas, there’s so much potential within the VA Group to not only become profitable but a real force within the Pacific. It doesn’t have to be at the behest of Qantas either. Imagine if both airlines (and AIr New Zealand) worked in a loose alliance, a legal cabal. At the very least to cover our Australian “turf”.
Apologies for the long post, glad to hear constructive thoughts on how to turn VA around. A lot of people’s futures depend on it.