Virgin Atlantic

[Skipness One Echo]

SRB is a figurehead, he does not run VS and it is not a family business. I agree they took their eye off the ball for a bit but no A380, swapping A346s for A330s and finally getting into domestic, if all done properly could yield good results. I am not their biggest fan but credit where it's due now.
STAR alliance membership is a must, I understand SRB's reluctance, but the world has changed. Get all of that new gear into T2 at LHR and ask the question again in three years.
SRB is right in one thing, when competiton goes, the consumer loses. I am a fan of BA but look at LHR-GLA fares these days. Ouch.

[Cyrano]

Originally Posted by British Airways

About AA, we know it is in BK and up for sale, US (a current *A member) is the leading contender to buy it, if *A carriers can make sure that AA/US becomes a *A member (in return for financing a deal, which will mean AAs creditors have less of a say in AA/US), if they refuse, *A carriers could then finance UA to have a go at bidding for AA (I feel that UA would be the best merger partner for AA)

So that BA/AA ATI could be folded into the *A ATI if VS buys BA and UA or US buys AA (thus gaining the large revenues from the BA/AA ATI), it will create some competition issues, but you have to remember that the ST (consisting of AF, KL, DL etc) is also a strong player on the TATL market in its own right so there will not be too many competition issues to deal with

Sorry, but none of this stacks up or even comes near to stacking up.

If US Airways buys AA, they will leave Star and join OneWorld. This is a pretty obvious move. That's not just my view, it's the view of Doug Parker, the US Airways CEO, quoted here.

The idea that UA would bid for AA is also fallacious. Consider the scale of network overlap and the antitrust remedies which would be required. In any case, UA can't even manage its own operation consistently these days - what would it gain from trying to swallow another behemoth?

"If VS buys BA"? You might as well propose that flyBE buys Ryanair - it's equally (im)plausible. No disrespect to VS, but they are not even remotely in the same league as BA in terms of either enterprise value or ability to raise finance. And there's the small matter of BA being a 100% subsidiary of IAG (so VS would have to buy IAG to get BA? )

Sorry, but no.

Some options for VS as I'd see it:
- BA buys them. Seems unlikely - the almost total route overlap would mean BA having to divest so many slots to get takeover clearance that they'd be left with little of value
- they join Star. Helpful perhaps, but ultimately how much of a game-changer? Some improved connectivity in LHR, e.g. from UA to Asia/Africa, but above all a lot of overlap and a lot of intra-alliance conflict with established connection flows (I'm looking at you, Lufthansa)
- they join the emerging Etihad/AF/KL/Air Berlin axis (whether that ends up being the same as SkyTeam or not), including an equity stake from EY.

[Fairdealfrank]

Quote: “Now I think that VS is a fairly decent airline and I think SRB is a good businessman, but the trouble that we cannot sustain 2 major full-service carriers, the European aviation market has changed since its was formed in the 80s, BAs main competitors are not from the UK, but in Mainland Europe”

Why can the UK not sustain 2 major full-service carriers?

Quote: “Remember no nation in Europe (bar Germany and in that case due to the Cold War) has any more than 1 full-service airline (in fact Europe is heading towards 2-3 full-service airlines for the whole region”

What does the cold war have to do with modern German aviation? AFAIK, Interflug is no longer with us.

Quote: “1: Agree a "peace deal" with BA, this will mean in the long run (when SRB retires or decides to call it a day), BA will buy VS, until then BA would buy a 49% stake (from Singapore Airlines), then BA and VS "agree" not to compete with each other on routes (this will mean VS will pull out of all routes that BA also serve, while launching new routes to destinations not served by either airline) and lastly VS joining OW”

Er, how would shareholders of both organisations be persuaded to agree this course of action?

Quote: “2: VS should offer to buy BA from IAG (to pay for the restructuring of IB) with the financial support of *A carriers (like when AC bought CP), BA will for a time become a subsidiary of VS and is gradually integrated into VS, then it will also join VS”

How could VS afford to buy BA? They couldn’t even scrape up enough readies to buy BD! That aside, it would leave IAG with just one loss-making carrier, so why would they agree?
　
　
Quote: “Britain's Air Travel Market is more or less the same size as lets say France, Germany (which is the exception to this due to the Cold War), Spain and Italy which only sustain 1 full-serivce carrier and you have to remember that BA (although not IAG) is making some profit in this market and VS is not, VS is also falling behind BA in terms of its route network as well (because it holds far less slots at LHR), while the BA/VS rivalry will not cause one to go bust, it will get increasingly unsustainable in the long run”

Quote: “The reason France had one full-service carrier is not just because of politics, remember France used to have 3 (Air France, UTA and Air Inter), but the reason that changed was that the French Government saw that having 3 was not sustainable with the looming liberalisation of Europe's air travel market, so the decision was due to economic and political reasons”


France has Corsair, Spain has Air Europa, both of which do longhaul and domestic, so are similar to Virgin (or how it will be from March 2013). So not the case that they can only sustain one full-service carrier each.

Again you mention the cold war and Germany without explaining what you mean.


Answers and explanations would appreciated please, British Airways.

[Fairdealfrank]

Quote: "SRB is a figurehead, he does not run VS and it is not a family business. I agree they took their eye off the ball for a bit but no A380, swapping A346s for A330s and finally getting into domestic, if all done properly could yield good results. I am not their biggest fan but credit where it's due now."

Steve Ridgeway runs it (for now), Richard Branson has never run it. They are getting their act together now, let's hope it works out.

Quote: "STAR alliance membership is a must, I understand SRB's reluctance, but the world has changed. Get all of that new gear into T2 at LHR and ask the question again in three years."

Yes, alliance membership is now essential, and it has to be Star.

Quote: "SRB is right in one thing, when competiton goes, the consumer loses. I am a fan of BA but look at LHR-GLA fares these days. Ouch."

Exactly right, it's burnt a hole in my pocket too!And no remedy from the useless EU!

BD, you are sorely missed!

[take-off]

What is the reason for VS85 Las Vegas changing to a A330 from a 747?
Am in process sorting dates and prices out for a Vegas holiday as this years got put off for several reasons, but was looking forward to going on a 747. Is this likely to be long term , or would it be better booking from Gatwick as some freinds going live in midlands, one other thing, is there any great difference in comfort between 2 planes, sorry for all the questions, but it is large chunk of money about to spend, as thinking would prefer direct flight rather than the change in chicago with AA we had last year, and being couped up on a 757 not so fun either( although the 738 we had from chicago to vegas seemed far more comfortable i.e more legroom???) thanks for any help too people .

[ETOPS]

What is the reason for VS85 Las Vegas changing to a A330 from a 747?

Probably increased competition. BA now run daily from LHR with 747 equipment and 4 time a week from LGW using T7s........

[take-off]

I know BA have put new service on at Gatwick , would that effect Manchester Much? Mind I guess Thomas cook adding extra Flights next year from Man is extra competition too?

[Cyber Bob]

VS 85 is out of MAN. Change is more than likely due to fleet movement. From a travelling perspective, the A330 is much more comfortable than the 747 in terms of the whole environment. In addition, the A330 comes with all singing and dancing in-flight entertainment, something that the 747's are receiving/about to receive . Equally as important is that the 85 is non stop from MAN, so why consider the change in ORD?. Go fly and enjoy, Take Off

[take-off]

The last flight we did was with American from Manchester to Vegas, with change , thats why looking for a direct.

[Cyber Bob]

You'll need 'Non-stop' as a direct service means that a flight can land elsewhere en-route to it's destination. The VS85 is a non-stop service, direct from Manchester to Vegas.

[take-off]

Thanks cyber bob

[Cyber Bob]

No worries - and don't risk it all on 17 black!!!

[Skipness One Echo]

VS085 / 086 is an A330 on some dates this winter, however for next summer, MAN gets two based B747s.

[BALHR]

Neither of the latter two options proffered are viable for VS. VS will do whatever they can to retain their identity and certainly wouldn't emabark and any form of venture with BA etc.

That said, it's no secret that VS are fighting a tough battle to retain it's independance and compete with the bigger players/partnerships. I should imagine that discussions have been held with regards to partnerships and alliances. Couple of sticking points would be

Retaining it's brand
Having partner airlines dumping air miles on them

That's perhaps why there has been no movement on that front - question is, for how long though?

Just my two penneth worth
All the best
CB

The First option would make sure VS is still around until SRB Retires, which will be sometime in the 2020s (after which it is fully absorbed into BA), so they will retain their identity, but they will become a memeber of OW and and "partner airline" to BA, but their operations would be more profitable than they are currently now (due to the fact they would no longer have to compete with BA) and able to launch new routes from London that are not currently around

The second option would of course secure VSs future after SRB retires, since that they would become the UKs full-service carrier and thus be sustainable for the long term, to finance the deal they would have to get finance from other *A partners (like when AC bought OW member CP), who would benefit from a *A friendly partner at LHR

As far as I could see, there are no other options for VS if it wants a sustainable long term future

SRB is a figurehead, he does not run VS and it is not a family business. I agree they took their eye off the ball for a bit but no A380, swapping A346s for A330s and finally getting into domestic, if all done properly could yield good results. I am not their biggest fan but credit where it's due now.
STAR alliance membership is a must, I understand SRB's reluctance, but the world has changed. Get all of that new gear into T2 at LHR and ask the question again in three years.
SRB is right in one thing, when competiton goes, the consumer loses. I am a fan of BA but look at LHR-GLA fares these days. Ouch.

SRB might not run day to day, but since he ultimately owns the airline, VS management need to get his approval on major matters, hence why I suggested that he is reponsible for the fact they are (foolishly) competing with BA, rather than partnering them

I hope their new domestic routes are sucessful, but I don't have much hope (certainly are going to be profitable for sure), The only reason BA even retains the routes to other regions in the UK (they have given up on all the other ones) is not because they make money, but because they make money for long-haul

I am suprised that VS are not launching London-Glasgow flights, you would have thought that would be a route that need competition, then again if BMI could not susutain it, how would VS?

Also the new A330s are being replacing the A340-300s, not the A340-600s, they will replaced seperately (along with the 747-400s) with either the A350-1000, 777-300ER or 777-9X (if VS are prepaired to wait)

Lastly while joining STAR would help VS, partnering with BA/OW is the best solution for them

If US Airways buys AA, they will leave Star and join OneWorld. This is a pretty obvious move. That's not just my view, it's the view of Doug Parker, the US Airways CEO, quoted here.

I am not disputing the fact that management of US want a combined AA/US to be a OW partner

What I am saying is that *A would not be keen on that happening, UA has a fairly close partnership with US (which fill the gaps where UA does serve in America)

If *A carriers want US to remain in their allaince (and/of if they want a VS takeover of BA to work) then they could provide financial help to the airline to help it fund their takeover of AA, which would be also of benefit to US due to the fact that will not have to give AAs creditors more of a say in the running of AA/US

However I would say that US feel marginlised within *A (they are not part of their ATI on TATL routes), hence the their attempt to buy AA and in effect, its membership of OW, so they will have to be convinced that a combined AA/US is better off staying in *A

I also feel that a AA/US merger is not a good idea, for a start US does not bring much to the table, apart from hubs in the South East/South West of America and the shuttle service, but nothing in relation to Trans-Pacfic for example and very little Trans-Atlantic wise either, plus AA/US would have to close (at the very least) their hub at PHL and maybe scale down PHX

Which I am suggesting a UA-AA merger is the best option for both airlines (plus it is unlikely to leave *A anytime soon)

The idea that UA would bid for AA is also fallacious. Consider the scale of network overlap and the antitrust remedies which would be required. In any case, UA can't even manage its own operation consistently these days - what would it gain from trying to swallow another behemoth?

Firstly the BBC is not really relevent and here is why I feel UA-AA is a good thing

Firstly UA has little presense in the South-East of America, they also have a problem in relation to routes to Latin America and they could do with more slots at LHR

AAs biggest problem is that they are lacking in the Pacific and the face they (and UA) are having to deal with a fragmented makrets in Chicago, LA and NYC

So if UA and AA merged, those problems would be solved, UA would gain AAs MIA hub, which is pretty profitable and serves emerging markets in Latin-America, AA also has a lot of slots/routes at LHR, which would be very useful to UA and UA-AA would be able to consolodate the fragmented markets in NYC, LA and Chicago. UA would also gain AA's profitable hub at DFW

Lastly, their fleets are fairly similar, both are more or less the same age and both are a lot of fleet types (A320, 737, 757, 767, 777)

As for anti-Trust, well it would be only be a small problem, which I would break it down:

Lets look at the domestic market, if AA and UA merged the combined airline would only hold 27.1% of the US Domestic Market, hardly a monopoly, remember Southwest/Air Tran hold 26% and Delta nearly 19%

AA and UA share only 3 hubs, they are LAX, ORD and NYC (in this case JFK and EWR), UA-AA would hold 40% of the NYC markets (All Airports in NYC) and LAX (not counting other airports in LA area), so it means that both markets will still have a lot of competition

ORD would become a fortress hub like UAs hubs in EWR and IAH and AAs hub in MIA and DFW, in the case of ORD, it will face strong competion from Chicago's other main airport MDW in the form of Southwest (who hold a near 90% market share at that airport)

As for International routes, Trans Pacific and Trans Atlantic routes would still face a lot of competition from Delta and its partners in ST or in the case of US-Africa fall behind them

So really the competition issues are not enough prevent a UA-AA merger 9 also feel UA-AA should then buy F9, to help the hub at DEN compete with Southwest)

The reason why UA is having teething problems is because they still have finished their merger with CO and remember that merger was pretty much a merger of equals (literally)

"If VS buys BA"? You might as well propose that flyBE buys Ryanair - it's equally (im)plausible. No disrespect to VS, but they are not even remotely in the same league as BA in terms of either enterprise value or ability to raise finance. And there's the small matter of BA being a 100% subsidiary of IAG (so VS would have to buy IAG to get BA? )

How could VS afford to buy BA? They couldn’t even scrape up enough readies to buy BD! That aside, it would leave IAG with just one loss-making carrier, so why would they agree?

VS cannot afford to buy BA on its own, but if it recived finance from *A partners (who would be interests in gaining a friendly partner at LHR and do a massive blow to BA), then I don't see why not, for example they did exactly the same thing in relation to *A member Air Canada's buyout of Canadian Airlines (who was a member of OW), which gave *A a advantage over OW in that region

What does the cold war have to do with modern German aviation? AFAIK, Interflug is no longer with us.

I am not talking about Interflug, I am talking about Air Berlin, remember (sorry if it seems patonising) that after WW2 Germany was occupied by 4 diffrent nations that where the main players of the Allies, weirdly Berlin (within the Soviet Zone) was also occupied by the 4 powers, later on the US (plus UK and France) fell out with the USSR and thus meant that Germany was split between "West" (allied to USA/NATO) and "East" (Allied to USSR/China/WP), but the problem with Berlin was that it also applied to Berlin, even though it was within East Germany, after the USSR failed to regain West Berlin and East Germany had to make do with East Berlin, those 4 powers agreed a deal in relation to Berlin

On the question of Air Travel, they made it clear that only British, American, where allowed to serve West Berlin, hence Lufthansa was locked out of was once a major hub for them, hence BA/AF/PA and a fair number of airlines from those nations flew to that airport (among those Airlines was Air Berlin, which at the time was a charter carrier)

When Germany was reunified, Lufthansa was allowed to serve Berlin, however time took its toll and Berlin was a shadow of its former self in the early 90s, so LH could not set up a sustainable hub in that city, at the same time the Germans wanted (before the deregulation of the European Air Travel Market) those British/French/american carriers to pull out of Berlin (bar serving routes from overseas) for reasons of fairness at the time, so those airlines either shut down their operations or sold them to Air Berlin (which was moving towards becoming a Full-Service Carrier and had moved from America to Germany)

It is only now that Lufthansa is now planning to set up a focus city in Berlin and now Air Berlin is both a full service carrier and OW member, so Germany does have 2 full service carriers and that is due to the cold war, if Lufthansa was allowed to serve West Berlin, then Air Berlin would have never bben forms and Germany would have only 1

[Blighty Pilot]

British Airways - I am in awe of you! 21 years old and you know sooooo much! You're obviously destined for politics or journalism.
Promise me you won't lower yourself and join us mere mortals in the flight deck of an aeroplane as I'm not sure I could cope with the enthralling, not to mention opinionated, conversation!

Have you been studying hard at your university or old style local poly and been fed all this stuff by an expert lecturer? Let me guess - an economics student with a PPL or a Air Transport and Management course?

[Cyber Bob]

Good shout Blighty!

British Airways - I admire your sentiment and certainly your enthusiasm however the only way that BA will absorb VS (Not the other way round) is if VS goes belly up.

VS will no doubt fight tooth and nail to remain independant however it's likely that it will join an alliance at some stage in the future - it's the way aviation is heading. Reason why they haven't joined one thus far is more than likely due to the points I've raised.

Please feel free to add more ideas, views, spin, conspiracy theory but please bear in mind that most people's attention span wanes after two para's!. Could print off and take your next tomb with me on my next trip - but although probably entertaining and enlightening - bunk time is bunk time after all

All the best
CB

PS. Reason why VS ain't operating GLA - LHR/LGW - haven't got the rights to do so. GLA - LHR wasn't included within the remedy slots they've recently acquired.

[MUFC_fan]

Reason why VS ain't operating GLA - LHR/LGW - haven't got the rights to do so. GLA - LHR wasn't included within the remedy slots they've recently acquired.

It's not that the airline don't have the right, they just don't have the slots or aircraft to do so.

Any EU airline could start LHR-GLA if they had the slots, it's just that VS aren't willing to use their current long haul slots to fly to Scotland and back!

I think that's a point people are missing. The slots on offer, yes, are there to be used on certain routes to satisfy the authorities but that doesn't mean they can't use their current slots to start domestic services either.

[Skipness One Echo]

hence why I suggested that he is reponsible for the fact they are (foolishly) competing with BA, rather than partnering them

1,915 words of utter tosh mate! What ARE you on about? This statement above, shows the level of your commercial know how. They compete because they have to, they compete where the market will allow. To suggest VS go away and make profits on all those pretendy routes that can make money that BA one assumes just didn't know were there, that's naive bordering in stupid. It really is, let's not beat about the bush.

The second option would of course secure VSs future after SRB retires, since that they would become the UKs full-service carrier and thus be sustainable for the long term, to finance the deal they would have to get finance from other *A partners (like when AC bought OW member CP), who would benefit from a *A friendly partner at LHR

What? Where's BA gone? Vanished in a puff of whatever you're smoking? You do know good old friendly STAR partner Singapore already owns 49% of VS? How's that investment worked out? Well? No, they've been trying to sell it.

Also the new A330s are being replacing the A340-300s, not the A340-600s,

Wrong, they're replacing A340-600s, several having left the fleet already.

UA has a fairly close partnership with US

Not so much domestically, it's the same as having TG and SQ in STAR, they still hate each other.

Which I am suggesting a UA-AA merger is the best option for both airlines (plus it is unlikely to leave *A anytime soon)

Nonsense, UA are struggling to manage the CO intergration, a behemouth the size of a combined AA-UA/CO would be frightening prospect for competition. That thing you don't seem to get around which is front and centre of why a lot of what you are writing about has to remain a fantasy.

those British/French/american carriers to pull out of Berlin (bar serving routes from overseas) for reasons of fairness at the time, so those airlines either shut down their operations or sold them to Air Berlin (which was moving towards becoming a Full-Service Carrier and had moved from America to Germany)

It wasn't done for "reasons of fairness", BA launched Deutsche BA to try and hold market share when LH got Berlin access but the market chose Lufthansa.

[aeulad]

Apologies if this has been reported already but it would seem Avion Express will be operating 3 A320s on VS' behalf for their ABZ, EDI and MAN schedules.

Kind regards

Mike

[cornishsimon]

I suppose the question has to be, will VS keep to domestic at LHR, or could we see some similar ops into LGW ?

would solve the problem with BA dropping MAN-LGW wouldnt it ?

cs