How much will Virgin lose on routes to Manchester, Aberdeen and Edinburgh over a 3 year period, with the proviso that if things get *really* bad, Virgin can just close the routes, re-lease out the Manchester slots to another carrier and hand the Aberdeen and Edinburgh slots back to the competition trustee ?
Assuming the losses on the routes are not too bad, how much are 7 free slot pairs at Heathrow worth, considering that after 3 years they can be used for any route including long haul rather than just domestic ?
Finally, how much of Virgin's revenue derived through bmi domestic feed ? Having customers fly to/from LHR with your main competitor is not a good idea long term.
If as seems, Virgin is wet leasing in A319s for domestic there is little capital expenditure then we just have an exercise of comparing 2 strategies with a cheap option to switch if things don't turn out.
Assuming Virgin get the free slots for next summer they would be stupid not to give this a try. Thd more free slots they get the more they will persist with domestic feed over the next three years until it turns profitable.
Last edited by davidjohnson6; 21st Aug 2012 at 22:15.