Virgin Atlantic

[GEB74]

Cyrano - correct about no remedy slots available for Manchester.
You very conveniently sidestepped the fact that the only reason Virgin are bothering to start a useless frequency of 3 daily to MAN is that they had to been seen to do something with the slots they had leased out BEFORE they could apply for the remedy slots - hence the earlier announced Manchester service.
So they've lost the revenue from leasing out three slots to enable them to operate a half assed schedule to MAN that will almost certainly lose them money to enable them to bid for 12 slots pairs of which they have only taken up 9.
Lose revenue, to lose money, to give a quarter of the slots back to your competitor..........Great business, not.
If they launch 3 daily NCE, fair play to them.
If nobody else goes for the slots and Virgin get the opportunity to use them on a European route in 2014, where do YOU see them rushing to serve?? My interpretation is that they couldn't use the slots for MAN as it is domestic, so they couldn't free their own 3 slots back up for long haul. The promise of these slots on looser terms in 2014 is worthless to Virgin if you can't operate long haul with them.

[lexoncd]

So really all thats changed is Delta now has the 49% share Singapore had. Beardy always retains that crucial 51% holding. KLM/Air France buying the remaining 51% would now seem wide of the mark.

[Cyrano]

Originally Posted by GEB74

Cyrano - correct about no remedy slots available for Manchester.
You very conveniently sidestepped the fact that the only reason Virgin are bothering to start a useless frequency of 3 daily to MAN is that they had to been seen to do something with the slots they had leased out BEFORE they could apply for the remedy slots - hence the earlier announced Manchester service.
So they've lost the revenue from leasing out three slots to enable them to operate a half assed schedule to MAN that will almost certainly lose them money to enable them to bid for 12 slots pairs of which they have only taken up 9.
Lose revenue, to lose money, to give a quarter of the slots back to your competitor..........Great business, not.
If they launch 3 daily NCE, fair play to them.
If nobody else goes for the slots and Virgin get the opportunity to use them on a European route in 2014, where do YOU see them rushing to serve?? My interpretation is that they couldn't use the slots for MAN as it is domestic, so they couldn't free their own 3 slots back up for long haul. The promise of these slots on looser terms in 2014 is worthless to Virgin if you can't operate long haul with them.

Not sure that I "very conveniently sidestepped" anything. I don't work for Virgin and have no reason to defend them. You're quite right that they had to show they were using the MAN slots before being able to apply for the other remedy slots (as a result, Aer Lingus (the former lessee of the slots) is facing some LHR schedule adjustments next summer).

FWIW, I am not at all convinced by the economics of the MAN service either - indeed, I'm not particularly convinced by EDI or ABZ, for that matter, but I see the play as being more of a long-term one: hang in there for three years and if it's not working, then switch the slots to other short-haul.

Is that a smart move? Well, let's say it seems a bit smarter now that DL with its deep pockets owns 49%, and will likely seem a bit smarter still if/when AF/KL takes a stake somewhere down the road.

Where do I see Virgin "rushing to serve", in your words? 3 daily NCE would be overkill and would lose them money (even if it earns them your respect ) But in a year or two I could imagine them using the slots for (for example) a VS/AF service to CDG, freeing up some of AF's LHR slots to enable some more Delta transatlantic services (with a bit of timing juggling, just as AF and KL made space in LHR for DL and their then-partner CO when OpenSkies came about).

I think AF/KL will come into this picture in a year or two (Delta's CEO used the word "accretive" in today's press conference when asked about this, i.e. AFKL and AZ can be added on to the bilateral DL/VS joint venture) and at that point the slot puzzle becomes easier to solve.

I understand that in your view it makes no business sense for VS to have incurred losses to be able to acquire slots, and then not to take up all the slots. I can question various aspects of VS strategy, but if they figured that the least loss-making thing they could do with those last 3 slots would lose them more than they'd ever get back in the future, I can't necessarily fault them for that specific decision.

C.

[jdcg]

Please could someone explain to me: the slots that VS (3 of 8) has returned, do they now get used by BA and do they have to be used LHR to CAI / RUH / NCE?

[chipsbrand]

The biggest problem that VS are going to have on their domestic routes is that there is no way the product can be competitive with BA. The issue is frequency. They will be operating 3 pd on MAN (against BA with 11), 4 on EDI (against BA with 13) and 3 on ABZ (against BA with 11). Presumably their own priorities will be on their own connecting traffic and even for this they will have weak schedules. In terms of appeal to business traffic their offering is so bad that they are unlikely to be able to compete for any significant corportae traffic. Certain financial losses on a large scale would seem to be the inevitable result. I wish them luck but...

[V_2]

You're quite right that they had to show they were using the MAN slots before being able to apply for the other remedy slots (as a result, Aer Lingus (the former lessee of the slots) is facing some LHR schedule adjustments next summer).

I always thought that Cyprus Airways were leasing the original slots. This article (amongst others) suggests they are too: Virgin Atlantic to enter short-haul market | ATWOnline

Did Aer Lingus have some others too? Just curious

[BasilBush]

GEB74 - I think that the unused slots could be used to free up the MAN slots after a year (if no other airline has claimed them in the meantime). The EC decision states that they can be used on any European city pair, and this is defined as the EU, Norway etc. The last time I looked, the UK was still in the EU!

So VS would be able after a year to shift the MAN slots to long haul, and use the currently unallocated remedy slots to continue to operate MAN.

[WHBM]

Originally Posted by chipsbrand

The biggest problem that VS are going to have on their domestic routes is that there is no way the product can be competitive with BA. The issue is frequency. They will be operating 3 pd on MAN (against BA with 11)

I recall back in the 1980s Dan-Air got licences on Heathrow to Manchester, which they operated 3 times daily against BA who had their hourly Shuttle.

No reservations needed on thr Dan-Air flights either because they typically had 25% loads, and sometimes less. That was with fully flexible tickets where you could readily transfer onto their flights if your company had issued you with a BA ticket.

I can't quite see either how the three flights will be "scheduled to connect" with Virgin's fair number of long-haul flights, when these are all somewhat evenly spread throughout the day.

[TSR2]

I recall back in the 1980s Dan-Air got licences on Heathrow to Manchester

Yes and their biggest problem that killed the route was that their aircraft had to park on a remote stand at LHR and pax had a lengthy bus ride to the terminal. I hope VS will not be disadvantaged in the same way.

[Cyrano]

Originally Posted by V_2

I always thought that Cyprus Airways were leasing the original slots. This article (amongst others) suggests they are too: Virgin Atlantic to enter short-haul market | ATWOnline

Did Aer Lingus have some others too? Just curious

That's interesting! I'm pretty sure Aer Lingus had at least one slot leased from VS, so maybe that's where the three slots came from? 2 from CY and 1 from EI?

[colegate]

I have been loking in detail at the VS domestic schedules as published today in Business Traveller. They are truly shockingly bad both from an aircraft utilisation point of view and from a passenger demand point of view. Start with LHR/MAN. No early morning departure. First flight is 0920 and then nothing before 1620. From MAN first flight is 0650 and then next is 1220. You have to be cynical about how these schedules can in any way be attractive for point to point traffic or connecting traffic. For example who is going to use an 0650 flight for a connection at LHR at,say,1200? or 1500?
ABZ is a classic business route where the train competition is dire. VS first flight from LHR is 0930 and then nothing until 1530.
In the other direction the first flight is at 0635 and then nothing until 1155.
On EDI where the frequency is better the gaps still look horrible. Deps ex LHR are 0645 0910 1120 1515 1625 1950. It is as bad coming south.
When you put it into an aircraft plot there are two aircraft on the ground at LHR for approx 3 hours in the middle of the day. There is a lot of operational integrity but it is very slack on aircraft utilisation and on crew utilisation and therefore high on unit costs.
The whole thing looks like a commercial "train wreck". My professional background in things like aircraft scheduling and airline marketing just tells me this thing cannot work

[Gpik]

ABZ - LHR arrival 0815.
MAN - LHR arrival 0800
EDI - LHR arrival 0810

Connects with LAX 1125, MIA 1245, BOM 1035, JFK3 0920, SFO 1100, NRT 1200, IAD 1130. all within 3 hr connection.

ABZ - LHR arrival 1335.
MAN - LHR arrival 1330.
EDI - LHR arrival 1250.

Connects with BOS 1500, LAX23 1515, JFK9 1650, EWR1 1600. All generally within 3 hr connection

ABZ - LHR arrival 1915.
MAN - LHR arrival 1900.
EDI- LHR arrival 1905.
EDI- LHR arrival 2015

Connects with ACC 2230, CPT 2105*, DEL 2150, DXB 2110, HKG 2125, JNB 2030, LOS 2220, EWR 2010. All 3ish hour connections

Return.

LHR - ABZ Departure 0930
LHR - MAN Departure 0920
LHR - EDI Departure 0645 (HKG only)
LHR - EDI Departure 0910

Connects from BOS 0720, HKG 0450, JNB 0650, BOM 0750, JFK4 0620, JFK46 0740, IAD 0655.

LHR - ABZ Departure 1530
LHR - MAN Departure 1610
LHR - EDI Departure 1515 and 1620

Connects with DXB 1415, LAX8 1335,

LHR - ABZ Departure 2015
LHR - MAN Departure 2010
LHR - EDI Departure 1950

Connects with ACC 1740, DEL 1755, LOS 1655, PVG 1655.

LHR - EDI obviously connects with more flights in the middle of the day.

Sorry colegate, connections seem to work?

I understand your point about a/c utilisation however VS have there hands tied with slots available. No?

[Blighty Pilot]

Finally! Someone who realises why the flights are scheduled at certain times and why the shorthaul product is being established. This venture is 99.99% about feeder traffic to the long haul product. Of course VS will be delighted to carry pax between ABZ,MAN, EDI and LHR but the aim of the game is to feed their LH network.
In the future, as and when the Delta tie up gets approval, then someone from ABZ will be able to travel to anywhere in the USA via LHR and JFK without the need to reclaim baggage or check in at various airports - hopefully a seemless transition (especially using the clubhouse if applicable ).

[colegate]

Excellent analysis Gpik. But I have looked through the BA schedules and on every one of those routes they have better connections and all of them are through the same terminal at LHR. Operating connecting flights through 2 different LHR terminals will be a substantial disadvantage for VS. And Blighty Pilot Virgin has argued publicly that they will be bringing competition to domestic routes. Their public arguments have not been about connecting flights.

[DaveReidUK]

And Blighty Pilot Virgin has argued publicly that they will be bringing competition to domestic routes.

Yes, they have and yes, they will.

Their public arguments have not been about connecting flights.

Well it probably never occurred to VS that it wouldn't be obvious to everyone why they're doing it.

[WHBM]

Originally Posted by Blighty Pilot

In the future, as and when the Delta tie up gets approval, then someone from ABZ will be able to travel to anywhere in the USA via LHR and JFK without the need to reclaim baggage or check in at various airports - hopefully a seamless transition......

I am always dismayed by these statements about the various airline tie-ups or launching additional flights from hubs, that refer to a "new" ability to make connections as if it was analogous to the Second Coming of Christ.

A generation ago you could connect from EVERYTHING to EVERYTHING at Heathrow, and indeed most other points, in this manner, courtesy of the standard IATA agreement of the time. It was the carriers themselves that threw this "seamless transition" away.

Furthermore you have been able to transfer from Aberdeen to "anywhere" (actually not) in the USA all along, courtesy of BA and their longstanding partner American through Heathrow, KLM and their longer-standing partner Northwest (now Delta) through Amsterdam, etc. All we have now is another me-too operation.

By the way, the last time I looked these new domestic flights were to be operated into T1, Virgin operate out of T3, and Delta operate out of T4. That is going to lead to goodness-knows how many misdirected pax and Seamlessly Lost connecting bags.

[islandhopper]

I think you'll find that the new Virgin domestic will operate alongside longhaul in T3 ,where a new domestic arrivals area is being created for them allowing the connections to work easily.

[Skipness One Echo]

This venture is 99.99% about feeder traffic to the long haul product.

I understand this is a tricky squaring of a circle though as without decent hijgh fares on P2P, a fraction of a long haul revenue leaves the short haul deeply in the red. This remains true of BA and more so of BMI in later years.

[BA318]

Flights from T1

Islandhopper I think you'll find the flights will operate from T1 and then T2 when it opens. It was announced a while back.

Virgin Atlantic Airways - Popup

[WHBM]

Originally Posted by Skipness One Echo

I understand this is a tricky squaring of a circle though as without decent hijgh fares on P2P, a fraction of a long haul revenue leaves the short haul deeply in the red. This remains true of BA and more so of BMI in later years.

You are correct. BA not only have well over half the pax on Heathrow-Scotland P2P (which I derive from discussion with seatmates over the years), but also the "loss" caused by low attribution of through fares to the domestic sector, although appearing in the accountants books as such, will get nodded through by WW and the board who understand these things and the corporate benefit to long-haul. BMI's issue was that they had no long-haul out of Heathrow, and in latter years such traffic was just an accounting gift to their fellow Star Alliance partners. They got the long-haul benefit, while BMI took the connecting leg low revenue share losses.