Virgin to spawn new LCC??

[Yakka]

VIRGIN Blue could spawn an international carrier as well as a new low-cost airline in the next five years as the carrier expands its capacity.

Virgin Blue (vba.ASX:Quote,News) today announced a half year net profit of $124.3 million, an 81 per cent rise on the previous first half, predicting a full year result 60 per cent above the previous full year's net profit of $112 million.

As the profit was announced, the company pointed to ambitious expansion plans.

While its main airline would increasingly target the high yield customers dominated by Qantas, the company hoped to create an international carrier to fly the US route and maybe even a new low cost carrier.

Virgin Blue chief executive officer, Brett Godfrey, said the company was in negotiations with Boeing to acquire seven, long-haul 777-300ER aircraft at a cost of $US2.6 billion ($3.3 billion).

The talks were close to conclusion, Mr Godfrey said, and showed Virgin Blue was confident of regulatory approval to fly the US route.

Virgin Blue began considering the trans-Pacific route seriously, he said, when the Federal Government rejected Singapore Airlines' application to fly the route.

"The aviation review, which was quite a substantive review which was completed in February of last year, was (our) impetus," Mr Godfrey said.

"We said we weren't prepared to invest $2.5 billion of equipment and many millions of dollars in equity investment if we were going to be squashed in start up, so the Government had given us (an indication) and made it clear that Singapore would not be given access."

Mr Godfrey said it was too early to speculate about fares and destinations, but said the airline was open minded and wouldn't necessarily fly to Los Angeles.

He also confirmed that a new brand would need to be launched for this route and the new international carrier would operate independently of Virgin Blue.

On the domestic front, Mr Godfrey confirmed that Virgin Blue would continue courting the corporate market and seek a larger slice of Qantas's customers.

"We're now getting some momentum in moving into the domain of the legacy carrier yield," he said.

But the focus on budget travellers would not cease and the company was considering the launch of a new low cost carrier.

"Virgin Blue has moved off the market being a pure LCC (low cost carrier) and we think it's quite prudent now to consider whether or not Virgin Blue should even establish its own low cost brand, its own ultra-low cost LCC."

Mr Godfrey said the purchase of another six Brazilian Embraer aircraft to add to the 14 announced in November, could assist this strategy.

The aircraft had the capacity to service regional airports that had never been contested, as well as secondary metropolitan airports, such as Avalon near Melbourne.

Mr Godfrey stressed that the LCC proposal was purely conceptual at this stage.

The Virgin Blue CEO also sought to brush off the threat posed by Singapore based LCC, Tiger, which hopes to fly the Australian domestic market by the end of the year.

Mr Godfrey said Tiger's five planes were dwarfed by Virgin Blue's fleet of more than 50. He welcomed competition.

[Wingspar]

"Virgin Blue has moved off the market being a pure LCC (low cost carrier) and we think it's quite prudent now to consider whether or not Virgin Blue should even establish its own low cost brand, its own ultra-low cost LCC."


"I see you are no longer low cost so we'll start a low cost."

"So you are low cost, then we'll start an ultra low cost."

"OK, we will start an ultra, ultra low cost!"

When will it end? The funny thing is Virgin Blue becoming the premium brand! :confused:

[priapism]

The race to the bottom continues

[Wingspar]

If they moved off being a pure LCC and now finally making good money with an appropriate share price, doesn't that say something about where the money pit is?

So why chase the pure LCC product anyway?

Their current cost base and the impending EMB's will give them good response solutions or maybe it's a case of bravado. You know everyman and his dog starting an airline this month.

[QF MAINT OUTSOURCED]

finally an admission to a dulopoly and PRICE FIXING,what a rort

[Mr.Buzzy]

Pineapple anyone?

[OPT/MAX]

Pointy end first please

[No worries mate]

DJ will use the E-jets, especially the 190 with their 100+ seats to start their new LCC with lower wages and conditions. Over time they will send the B737-700s over to the new operations. They will offer a new EBA based around seating capacity, ie up to 140 seats and they will have the E190 and the 737-700’s operating the new LCC. The E-jets will operate the regional flights with the 737-700’s operating the between the major cities. The B737-800’s will be used on the golden triangle, plus flights to Perth. The new LCC will have a fleet of 30-50 aircraft, while what is left of the current Virgin Blue will have 15 -20 737-800’s.

[2p!ssed2drive]

Mr Buzzy... My word, you are getting slack on the -


"bzzzzbzbzzzzzzzzzzzzzzzzzzzzzzzz" ?

[Mr.Buzzy]

Yaaa it's an attitude thing.

bbbbzzzzz

[320subria]

Yes Virgin has definately been responsbile for eroding conditions of the industry in Oz, granted a business needs to make money to remain viable and conditions pre Virgin were probably not sustainable. Now the hint of a new low cost carrier, no wonder Mr Godfrey has been so passionately spreading the word of his uniquely termed 'new world carrier', so as to distinguish it so he can launch a truly 'low cost carrier'. Already Virgin has set the precedent in reducing cabin crew ratios', so of course Jetstar and Qantas will follow suit to remain competitive. The so called 'they can copy our business but not copy our culture' rhetoric virgin drums home in its training and induction programs will disappear quickly if it continues to pursue more from their staff for less rewards and conditions.

[Buster Hyman]

So I think that, in about 15 years from now, air travel will be free for the punters. This will be because the costs associated with flying will be subsidised by the employees paying for endorsements and the honour of working!

:mad:

[HotDog]

Where are all the soothsayers that predicted a six month lifespan for that pommy upstart, when they launched their seven daily flights between Sydney and Brisbane on August 3, 2000?:ok:

[Eastwest Loco]

Virgin Spawn - I think we have an innovative new name for the offshoot already.

I like it.

PLEASE tell me that conditions and remuneration are not going to be degraded again.

The industry is starting to make the Bodgie/Fat Man bastardisation of the industry look more and more like a fart in the bath.

I do not like the direction it is travelling as there are too many bean counters in direct control of spanners and spare parts and where they are located. We do not need a Pan American mindset. That will cause a great deal of paperwork in the worst possible way sooner rather than later.

Best all

EWL

[ShockWave]

Absolutely correct.

Where will it end? .......To make milk you need to be able to buy a farm, then plant grass, then pray that water falls from the sky so the grass can grow, then you need some cows and a dairy and a truck to take it all to the supermarket via the middle men who all get more from it than you. Then they will sell it for you by the litre at less than the cost of a litre of water.

We are still better off than the dairy farmers but that is how low it could go.

The question remains to be answered, why not just bottle the water that falls from the sky and forget about the cows?:ugh:

[VBA Engineer]

When are you guys going to realise...

We get paid what the market thinks we are worth, not what you think you are worth.......

Funny how today the guy fixing the plane takes home more money than the guy flying the plane.

The golden pineaple days are long gone.

[freddyKrueger]

We get paid what the market thinks we are worth, not what you think you are worth.......
That implies a "normal" market. The situation local with pilots is actually a monopsony (http://en.wikipedia.org/wiki/Monopsony) and it it regarded as a market failure, in the same way as a monopoly is. Engineers actually have far greater opportunities to ply their trade in other booming sectors of the economy(mining) than pilots.
That said, on a global scale, the pilot market is operating just fine. There are fantastic opportunities for those willing to be part of the global market. Even if local wges stagnate, the wage differential will begin to widen & the process of pilots leaving local operators will accelerate.

[cunninglinguist]

Where are all the soothsayers that predicted a six month lifespan for that pommy upstart, when they launched their seven daily flights between Sydney and Brisbane on August 3, 2000?

Yep, Branson and Godfrey are heroes, great blokes, geniuses, VBs expansion had nothing to do with AN going broke, and if AN were still here today VB would still have 50 odd a/c...................and the easter bunny will be here in a few weeks :ugh:

[Wingspar]

With all these new planes coming over the next few years i.e. VB, QF, JQ and Tiger.......where are all the pilots going to come from?

[Chris Higgins]

I've got a different opinion on this one. I think the existing Virgin Blue will go more high end to introduce a more seamless product from those European and new codeshare customers that don't promote no-frills. The existing Virgin Blue will end up looking more like Virgin Atlantic.
Once the partnership stuff is all taken care of, then they can go and chase Jetstar around again.

[HotDog]

cunninglinguist,
If my auntie had balls, she would be my uncle! Whatever your theory is of VB's success, the bottom line is that they are still here and prospering after almost seven years. Your emoticon is very appropriate, keep on banging!

[Toolman101]

PAF

'Whilst people are willing to work as an airline F/O for 70K, 50K, 30K etc they will go down. It's not the airlines fault'.

I think you have hit the nail on the head. Until you have people willing to believe they are worth more than the pittance that the companies want to pay ,you will always be on a downward pay spiral.

People always believe that once they get into a job, the management will do the right thing and T & C's will improve over time. Unfortunately thats not going to happen in todays industrial climate.:{

[Pete Conrad]

And really linguist....what have your mob done for the industry? Bettered it? Made morale in a once great job high? Kept those big nasty QF pilots honest?

Hot Dogs right..keep banging your head, you may reverse the effects of that labotomy you got in Pornstar groundschool.

[Sue Ridgepipe]

With all these new planes coming over the next few years i.e. VB, QF, JQ and Tiger.......where are all the pilots going to come from?

....and where are all the passengers going to come from?

[cunninglinguist]

Well though out and informative and mis-informed post as usual Conrad.
Was simply pointing out that the " legends " of aviation, Branson and Godfrey ( not excluding yourself of course :yuk: ), were kissed on the richard by a fairy, everybody except the abovementioned know there was'nt room for both AN and VB. It would be like saying, geez Hotdogs is a financial genius when all he did was win lotto.

My post had absolutely :mad: all to do with what VB have and have'nt done for the industry


Good point Sue, and where would they have come from had AN retained their pre '91 fleet and VB got 50 a/c.

[HotDog]

Spaceship 1 captured the $10mil prize for a privately developed vehicle to reach outer space. The craft was designed and built by Bert Rutan and private space flights are scheduled for 2008 at a price of $200,000. One of my personal lady friends from Hong Kong is in training right now to be one of the first commercial passengers on it.http://i106.photobucket.com/albums/m246/adamtakach/IMG_3887.jpg

[F/O Bloggs]

Hotdog,

Is Spaceship 1 another Virgin LCC?, I will fly their pseudo space ship 70 K a year. (not)

:ugh:

[HotDog]

It is in a way, it doesn't carry cabin crew although the USD 200,000 fare would suggest a very upperclass LCC.:)

[VR-HFX]

Hot Dog

On the basis of it being a one-way fare, it's a bargain.:}

Where do I sign my wife up?:E

[404 Titan]

VR-HFX

You crack me up. Very funny even though it’s not politically correct. Ah who cares, it made me laugh. We need more of it.:ok:

[wirgin blew]

Mr Godfrey stressed that the LCC proposal was purely conceptual at this stage. - AAP

:rolleyes:

[HotDog]

Dear HFX, why don't you just trade her in like I did with my old bird. Mind you, a space trip would have been cheaper in the long run.:}

[Pete Conrad]

Well we all know where Virgins LCC and Tiger will get their passengers from....J*!!!!!!........isn't that right linguist?...