Virgin Atlantic
What you can compare AB with ZB is the financial position. In 2003, Air Berlin had a turnover of 863m Euro and a small profit. Monarch have just announced their numbers and had a similar amount of turnover (for the group as a whole).
I can't see why, Monarch couldn't have been the "next" Air Berlin? Their past was very much charter/low cost operations and have diversified into cities and business flights - something which Monarch have tried very recently with flights to Milan, Munich and Rome. Some of which have failed miserably.
I think a theoretical purchase of Jet2 would open Monarch up to a host of routes from the North of England plus another 40ish aircraft, which would double the size of the airline, putting them on an equal footing to TUI.
Obviously the board at Monarch would have no appetite for this considering their 45 aircraft plan from 2021.
Maybe I'm talking rubbish!
I can't see why, Monarch couldn't have been the "next" Air Berlin? Their past was very much charter/low cost operations and have diversified into cities and business flights - something which Monarch have tried very recently with flights to Milan, Munich and Rome. Some of which have failed miserably.
I think a theoretical purchase of Jet2 would open Monarch up to a host of routes from the North of England plus another 40ish aircraft, which would double the size of the airline, putting them on an equal footing to TUI.
Obviously the board at Monarch would have no appetite for this considering their 45 aircraft plan from 2021.
Maybe I'm talking rubbish!
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Looks like Delta Air Lines is trying to buy Singapore Airline's 49pc stake in Virgin now which would open them up to joining the Sky Team Global Alliance.
Delta plots to take control of Virgin Atlantic - Telegraph
Delta plots to take control of Virgin Atlantic - Telegraph
This might be a naive question but I don't really understand what Virgin would add to Skyteam, apart from increased capacity on the LHR-JFK route and a few other bits and bobs. I'm left wondering if this might be a repeat of bmi but without the wealthy parent company picking up the bill for any losses.
Virgin fly to relatively few major Skyteam hubs in the world diminishing the capacity for exchange of feed. Furthermore, Virgin have yet to do any real flying from Heathrow to Manchester, Edinburgh or Aberdeen - making for relatively undeveloped routes, at least from a VS perspective. It all seems like quite a long term play before any significant benefits will accrue to either VS or DL
Comments anyone ?
Virgin fly to relatively few major Skyteam hubs in the world diminishing the capacity for exchange of feed. Furthermore, Virgin have yet to do any real flying from Heathrow to Manchester, Edinburgh or Aberdeen - making for relatively undeveloped routes, at least from a VS perspective. It all seems like quite a long term play before any significant benefits will accrue to either VS or DL
Comments anyone ?
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There will be more than just Atlantic, and I wouldn't be surprised to see involvement from the other Virgin airlines, and Etihad. Domestic/European from Heathrow could be operated by Air France or KLM, in Virgin branding...
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That picture with the Virgin tail reminds me of the Club Air B727s on the Luton-Dublin services in the 1980s. A story going the rounds in those days was when RB was visiting Luton and one of B727s landed displaying a multitude of colours on its fuselage and RB seeing it is said to have uttered the words ******* JESUS CHRIST and it was known effectionately thereafter as above!
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Quote: "Looks like Delta Air Lines is trying to buy Singapore Airline's 49pc stake in Virgin now which would open them up to joining the Sky Team Global Alliance.
Delta plots to take control of Virgin Atlantic - Telegraph"
Does the 51% majority shareholder have any say in who the minority 49% shareholder sells to, or can SQ just sell to anyone, whether Branson approves or not?
Are there any bi-lateral agreements between the UK and US about foreign ownership of airlines, and percentages thereof?
It is likely to be about LHR slots so another reason to expand LHR and stop the (non) availibility of slots being such an issue
If DL got 49% and and AF/KL got the rest, it would almost certainly be BD all over again: asset stripping of slots while VS dies a slow death being progressively robbed of its routes with the slots are reallocated to DL, AF and KL.
That said, AF made a horlicks of the LHR-LAX route, so that may deter them from operating North American routes from LHR. Maybe there is scope for South American routes as there's little competition, but they are already push those pax through their hubs at CDG and AMS. There maybe scope for DL to do more flights to their USA hubs, ATL, JFK, etc..
Delta plots to take control of Virgin Atlantic - Telegraph"
Does the 51% majority shareholder have any say in who the minority 49% shareholder sells to, or can SQ just sell to anyone, whether Branson approves or not?
Are there any bi-lateral agreements between the UK and US about foreign ownership of airlines, and percentages thereof?
It is likely to be about LHR slots so another reason to expand LHR and stop the (non) availibility of slots being such an issue
If DL got 49% and and AF/KL got the rest, it would almost certainly be BD all over again: asset stripping of slots while VS dies a slow death being progressively robbed of its routes with the slots are reallocated to DL, AF and KL.
That said, AF made a horlicks of the LHR-LAX route, so that may deter them from operating North American routes from LHR. Maybe there is scope for South American routes as there's little competition, but they are already push those pax through their hubs at CDG and AMS. There maybe scope for DL to do more flights to their USA hubs, ATL, JFK, etc..
compton - yes, there would be some more Skyteam aligned LHR slots, but for Skyteam to make effective use of those slots would to some extent mean Virgin killing off some of their existing tried-and-tested routes in favour of routes to Skyteam-aligned destinations. As an example, how does a Heathrow-San Francisco or Heathrow-Dubai route really benefit Skyteam, when Pairis-CDG and Amsterdam both already have excellent local feed from all over Europe as well as plentiful long haul flights ?
Furthermore, if Delta wants access to some LHR slots, would they really need to spend the money on a 49% equity stake in VS and not have majority control of the company or (combined with AF-KL) buy a 51% stake in VS ? A major equity stake seems an awfully expensive way of accessing a handful of Skyteam-friendly slots at one airport - the risk of overpaying comes to mind.
I believe that Singapore Airlines have already written down the equity stake in VS in their accounts to zero - so they have already taken the accounting pain. Assuming SQ intend to remain within Star Alliance, SQ will want to make things as expensive as possible for Skyteam to gain a significant increase in LHR slots, extracting as much cash as they possibly can out of Delta.
I'm not saying that Delta taking a 49% (or more) stake in Virgin would be a bad thing - I just haven't seen a convincing agrument yet and hope someone can persuade me as to the merits of such a deal.
toledoashley - why would AF-KL choose to operate flights outside the UK to/from Heathrow in Virgin branding and pay a royalty fee to Beardy and make use of existing valuable slots used for CDG/AMS services, when AF-KL can instead take those same passengers to Paris/Amsterdam in their own branding on existing services and not have to worry about leaking customers to another airline ?
Furthermore, if Delta wants access to some LHR slots, would they really need to spend the money on a 49% equity stake in VS and not have majority control of the company or (combined with AF-KL) buy a 51% stake in VS ? A major equity stake seems an awfully expensive way of accessing a handful of Skyteam-friendly slots at one airport - the risk of overpaying comes to mind.
I believe that Singapore Airlines have already written down the equity stake in VS in their accounts to zero - so they have already taken the accounting pain. Assuming SQ intend to remain within Star Alliance, SQ will want to make things as expensive as possible for Skyteam to gain a significant increase in LHR slots, extracting as much cash as they possibly can out of Delta.
I'm not saying that Delta taking a 49% (or more) stake in Virgin would be a bad thing - I just haven't seen a convincing agrument yet and hope someone can persuade me as to the merits of such a deal.
toledoashley - why would AF-KL choose to operate flights outside the UK to/from Heathrow in Virgin branding and pay a royalty fee to Beardy and make use of existing valuable slots used for CDG/AMS services, when AF-KL can instead take those same passengers to Paris/Amsterdam in their own branding on existing services and not have to worry about leaking customers to another airline ?
Last edited by davidjohnson6; 2nd Dec 2012 at 20:50.
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FDF -
As Virgin is a private company, there will be a shareholder's agreement which will determine the rights of the shareholders in respect of representation, investment and divestment.
As Virgin is a private company, there will be a shareholder's agreement which will determine the rights of the shareholders in respect of representation, investment and divestment.
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As an example, how does a Heathrow-San Francisco or Heathrow-Dubai route really benefit Skyteam, when Pairis-CDG and Amsterdam both already have excellent local feed from all over Europe as well as plentiful long haul flights ?
What VS brings is a presence in most major long haul markets from London. Being able to offer non-stop LON-Tokyo, LON-Hong Kong, LON-Los Angeles can only help Skyteam in the London market, and also in the foreign markets concerned as well
Last edited by airhumberside; 3rd Dec 2012 at 20:27.
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Quote: "FDF -
As Virgin is a private company, there will be a shareholder's agreement which will determine the rights of the shareholders in respect of representation, investment and divestment."
Thanks for the info, LGS6753, this implies that SQ would need Branson's approval to proceed?
Quote: "Such routes would benefit Skyteam in the London market. I doubt many business travellers at least are going to be doing LHR-CDG-DXB or LHR-CDG-SFO for example when there are plenty of non-stop options available. If Skyteam, or DL/AF have decided they want to have a larger share of the London market, they need to offer a wider range of non-stop destinations covering key global cities, Skyteam hub or not.
What VS brings is a presence in most major long haul markets from London. Being able to offer non-stop LON-Tokyo, LON-Hong Kong, LON-Los Angeles can only help Skyteam in the London market, and also in the foreign markets concerned as well"
Yes, this is what VS could bring to the Skyteam table, or to Star now that BD is no more.
If Skyteam want to build up a serious LHR hub, thus giving them three hubs very close to eachother, there is no need (from a Skyteam point of view) to have one or more of its members buy into some or all of VS. They just need to invite VS on board as presently constituted to provide this. This could mean VS heading off to LHR-4 which would then need a UK arrivals facility.
As Virgin is a private company, there will be a shareholder's agreement which will determine the rights of the shareholders in respect of representation, investment and divestment."
Thanks for the info, LGS6753, this implies that SQ would need Branson's approval to proceed?
Quote: "Such routes would benefit Skyteam in the London market. I doubt many business travellers at least are going to be doing LHR-CDG-DXB or LHR-CDG-SFO for example when there are plenty of non-stop options available. If Skyteam, or DL/AF have decided they want to have a larger share of the London market, they need to offer a wider range of non-stop destinations covering key global cities, Skyteam hub or not.
What VS brings is a presence in most major long haul markets from London. Being able to offer non-stop LON-Tokyo, LON-Hong Kong, LON-Los Angeles can only help Skyteam in the London market, and also in the foreign markets concerned as well"
Yes, this is what VS could bring to the Skyteam table, or to Star now that BD is no more.
If Skyteam want to build up a serious LHR hub, thus giving them three hubs very close to eachother, there is no need (from a Skyteam point of view) to have one or more of its members buy into some or all of VS. They just need to invite VS on board as presently constituted to provide this. This could mean VS heading off to LHR-4 which would then need a UK arrivals facility.
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Have to say that "SRBs stubborness" and "Cold War and Berlins ecnomic decline" are not valid reasons. Think again.
Many carriers are taking on "hybrid" characteristics as they attempt to deal with difficult circumstances.
Very early on, carriers such as BD and EI and several North American carriers, for example, started charging for catering on shorthaul flights.
Then came booking with credit card charges.
Others got involved in charters and holidays in varying degrees, as well as running standard longhaul flights, for example, BA, VS, UX, SS.
U2 has adopted allocated seating and is chasing business travellers, while FR remains a pure "no frills" operation.
Then there's your example of the similarities of AB and ZB.
Things are not always as cut and dried as they appear at first.
Many carriers are taking on "hybrid" characteristics as they attempt to deal with difficult circumstances.
Very early on, carriers such as BD and EI and several North American carriers, for example, started charging for catering on shorthaul flights.
Then came booking with credit card charges.
Others got involved in charters and holidays in varying degrees, as well as running standard longhaul flights, for example, BA, VS, UX, SS.
U2 has adopted allocated seating and is chasing business travellers, while FR remains a pure "no frills" operation.
Then there's your example of the similarities of AB and ZB.
Things are not always as cut and dried as they appear at first.
If you want to know those reasons in detail then I am more than happy to explain
I agree on you point about airlines becoming more like "hybrid carriers", also it is not the case that its LCCs that are the ones that doing credit card charges, the only "compulsory charge" Full-Service Carriers do is "fuel surcharges" their use has fallen in recent years
I would also make the point that my point about full-service carriers also includes "hybrid" airlines as well
It would be interesting to see how Easyjet will become in the near future however...
Also how come you are still suggesting that Corsair, they are a charter airline (like Thomson) who do scheduled services "on the side"
As for Air Europa, they are more like Monarch and they are also owned by travel agents
BA and VS do Charter, but they are on the side and their main business is still providing full-service scheduled services
VS admitting however have close ties with Virgin Holidays, but don't provide charter flights on their behalf, although most of the routes out of LGW are mostly customers from that travel agent
It's funny how people put ZB slightly above low cost. They are nothing but low cost these days and they are certainly not comparable with AB!
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Looks like Delta Air Lines is trying to buy Singapore Airline's 49pc stake in Virgin now which would open them up to joining the Sky Team Global Alliance.
Delta plots to take control of Virgin Atlantic - Telegraph
Delta plots to take control of Virgin Atlantic - Telegraph
Air France-KLM/Delta mull Virgin Atlantic acquisition | News | Breaking Travel News
Anyway I don't think it is a good idea in my opinion, for a start VS is being squeezed by BA for a start and Air France-KLM (who would have to involved in a deal like this) is in a rather poor financial state, the only benefit out of all of this is that they gain more market share on the LHR-JFK route (which can be done if they merged with AA), all their other needs in Europe and even the UK are well served by Air-France-KLM
I fear that this is going to end in a LH/BD/BA style mess
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by Cityjet??
Its more likely it will come from Air France or KLM (who both have the aircraft VS is planning to use
Does the 51% majority shareholder have any say in who the minority 49% shareholder sells to, or can SQ just sell to anyone, whether Branson approves or not?
Are there any bi-lateral agreements between the UK and US about foreign ownership of airlines, and percentages thereof?
It is likely to be about LHR slots so another reason to expand LHR and stop the (non) availibility of slots being such an issue
If DL got 49% and and AF/KL got the rest, it would almost certainly be BD all over again: asset stripping of slots while VS dies a slow death being progressively robbed of its routes with the slots are reallocated to DL, AF and KL.
Are there any bi-lateral agreements between the UK and US about foreign ownership of airlines, and percentages thereof?
It is likely to be about LHR slots so another reason to expand LHR and stop the (non) availibility of slots being such an issue
If DL got 49% and and AF/KL got the rest, it would almost certainly be BD all over again: asset stripping of slots while VS dies a slow death being progressively robbed of its routes with the slots are reallocated to DL, AF and KL.
Also UK/EU law states that Non-EEA airlines can have a maximum of a 49% shareholding in any EEA-based airline
North America/EEA is fine in terms of bi-lateral agreements, everywhere else depends on the state, but to make sure that they don't lose (where the EEA as a whole don't not have a single agreement) out VS would have to remain based in the UK (on paper at least)
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Aer Lingus are to announce in the next 24 hours that they are to commence short-haul flights from next March on behalf of another airline:
The Sunday Business Post - News - Aer Lingus expected to announce short-haul tie-up
It has to be Virgin Atlantic...
The Sunday Business Post - News - Aer Lingus expected to announce short-haul tie-up
It has to be Virgin Atlantic...