Lucky Virgin Blue on a roll with Macau-China flights

[Wirraway]

Wed "The Australian"

Lucky Virgin Blue on a roll with Macau-China flights
Steve Creedy
January 26, 2005

VIRGIN Blue is believed to be on the verge of unveiling an agreement that will give it access to the lucrative Chinese market through a deal in Macau.

Macau International Airport executive director John Chan Wai Leong said last night a deal with a low-cost carrier was expected within 30 days, with flights to the territory due to start by the end of the year.

Mr Leong would not name the carrier but said it was "a proven carrier, not a fly-by-night operator". "It's got a good track record."

Sources said they believed Virgin Blue had already signed an in-principle agreement and was waiting for paperwork to be done before making an announcement.

Rumours have been circulating for months that Virgin Blue wanted to form a joint venture with Air Macau to service routes between the gambling centre and China.

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[rescue 1]

This reminds me of Ansett - decided to get involved in the international arena while the backyard was dying from the lack of water and attention.

Polly (I hear Air Van as well), Pac Blue, and now China...stick to the model Mr Godfrey.

[Tagneah]

Even though they haven't used it lately I believe Poly had US West Coast landing rights. That means DJ has them now.

Tag

[The Enema Bandit]

Wow! Just think how cheap the pilots will be.

[mainwheel]

Will be interesting to see who wins here. A big difference in the business techniques.

Also,

Did anyone stop at the terminal help desk in macau and ask when/where all these airline's fly. The ones whose logo's appear plastered all over the terminal on official signboards. Only to be told most don't, and haven't for a long time.

Anyone had a look at the books. When was the last time the punters on seats section of the airline made a profit.

Punters from mainland might be a goer though. Good lucks!:ok:

[Wirraway]

Dow Jones
Wednesday January 26, 12:56 PM (S/pore)

INTERVIEW: Australia's Virgin Blue Fuel Charge To Stay

SINGAPORE (Dow Jones)--Australian discount carrier Virgin Blue Holdings Ltd. intends to keep its fuel surcharge on tickets although jet fuel prices are off earlier highs, Chief Executive Brett Godfrey said Wednesday.

"Over the medium term, we see no material improvement in fuel costs, and the potential is for fuel prices to go higher," Godfrey told Dow Jones Newswires.

"It's possible (for jet fuel prices) to go north of US$50 per barrel rather than south of that," added Godfrey, who's in Singapore for an aviation conference.

Higher prices prompted the company to hedge some of its fuel needs and to impose a surcharge last year when jet fuel prices reached US$40 per barrel. Subsequently, the company increased the surcharge twice when prices crossed US$50 and US$60 per barrel.

The rise in oil prices, which added US$50 million to Virgin Blue's fuel costs over the last six months, were among the reasons for the airline's recent profit warning.

Other factors were increased capacity and ferocious competition.

The Brisbane-based company, which competes in the domestic market against Qantas Airways Ltd. and counts British entrepreneur Richard Branson as its founding shareholder, said annual earnings will fall between 10% and 15%.

Virgin Blue filled 73% of its seats in December, down 7.5 percentage points from a year earlier. So far in the year that ends March, 76.5% of seats were filled compared with 83.2% a year earlier.

The company reported net profit of A$158.5 million in its first year after listing in Dec. 2003, while analysts had been forecasting net profit between A$150 million to A$200 million for the current fiscal year.

"We will make slightly less money, but will still make money. We grew 45% last year. We are not going to grow 45% this year or next," Godfrey said.

The drop in passenger demand came as Virgin Blue lifted capacity, with an average 49 aircraft flying last month compared with 40 in December 2003. Qantas Airways unit Jetstar has also added to local capacity with a fleet of 15 aircraft.

Virgin Blue has grabbed one-third of the Australian domestic market since it started in August 2000, with Qantas and Jetstar having the rest.

Godfrey was also skeptical about talk that Virgin Blue will figure prominently in Richard Branson's plans for flights from Australia to the U.S. - which is a lucrative route for Qantas, and which is also coveted by Singapore Airlines Ltd. (S55.SG).

Branson owns 25% of Virgin Blue while Australian company Patrick Corp. owns 46%.

"Virgin Blue has looked at the feasibility (of flying to the U.S). But there is less likelihood of us (Virgin Blue) doing it than not doing it," Godfrey said.

Godfrey said Virgin Blue has other priorities currently, including exploring setting up "baby Virgin Blues" in Asia.

However, while Virgin Blue has been in discussions with various parties over the last 12 months in Macau, India, Indonesia and Malaysia, nothing has materialized, he said.

Godfrey, who has been with Virgin Blue since it was formed in early 2003, expects to continue to helm the airline but said "there will come a point in time when the satisfaction of running an airline won't outweigh personal sacrifices".

"My family has suffered. I just came back from a trip and now I'm in Singapore," he said.

However, he disclosed that he is bound by a gentlemen's agreement to lead the airline for three years after listing.

"I still have another two years," Godfrey said.

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[Eimar Moron]

"My family has suffered. I just came back from a trip and now I'm in Singapore," he said. You have got to be joking, Bretty.
That is life as usual for people you employ on a miniscule fraction of your income
Perhaps you now have some insight into the "everyday" of the majority of your hard working mignons!

You, Brett, are fortunate that you can make a decision to retire when you want, the majority of us - the front-liners of airline ops - don't have that luxury.
Perhaps some compassion, because of your newly discovered prolonged family separation, might temper your future decisions?

It's undoubtedly a "buzz" being the successful, high-flying public face of VB - the reality is, you are able to eject and still ensure your family's ongoing security, whereas the majority of your charges can NOT.

Eimar Moron.

[Eastwest Loco]

Poly's US airspace rights were recoked quite a few years ago due to compliance breaches caused by lack of a given level of navigational/safety equipment on their aeroplanes.

Maybe someone with a lot more technical knowledge than me can fill in the gaps.

I believe (possibly incorrectly) that they were only operating into HNL with the 762 at that stage.

Best regards

EWL

[Dehavillanddriver]

From memory, the ex Kuwaiti 762 didn't go to the US because it didn't have ETOPS or TCAS.

They went to LA and HNL with the Air Canada 762 and 763.

They still have rights to the US - they currently operate to HNL with the 737-800 as far as I am aware.

Regardless of the traffic rights issue, the purchase of Poly is a bazarre move, one which has not been communicated to the troops via any forum other than an ABC report.

As far as I can tell which ever company decided (ie atlantic/blue) to set up an Australian owned operation, they would only have to apply to the International Air Services Commission for the capacity to operate across the Pacific and they would get it, subject to the usual restrictions such as AOC's etc...

For a board so intent on making money Pacific Blue and Polynesian are two good ways of not making money

[Eastwest Loco]

Apologies DHD

yes they do op HNL ex APW - once a week and it is a 738.

Just checked Sabre.

Best

EWL

[tobzalp]

What aircraft will they use on the route? The 737? Or will they use a Euro based frame and VB the flight number with a nice codeshare/cheapie type deal?