Virgin Australia concerns

[vhtae]

As a Virgin Australia customer I'm concerned in what seems a lack in strategy. I have listed some notable ones of late.

- The announcement of cancelling PER-AUH

- Tigerair Bali flights fiasco

- Strange lounge arrangements for customers on International flights

- 737MAX deferment

I really like VA and really hope they weather 'whatever storm' they're in.

Cheers -TAE

[Falling Leaf]

Why not also mention:

- Getting rid of the popular Embraer even though some leases go to 2022

- Putting VA pax onto ancient F100's with no board connect or business class

- Making 'tactical cancellations' for a dozen flights a day due to lack of crew

- Failing to make money off the ATR, which has been a cash cow for every other airline

- Taking 6 years to introduce an EFB, and still stuff up the installation

- Have you staff on C scale conditions, but expect them to deliver gold plated customer service

And the list goes on....

[downdata]

Be glad you are not a VA shareholder...

[HeartyMeatballs]

Virgin Blue will soon be Virgin Who? They should have stuck with what they were good at and that was being a fairly solid if unremarkable LCC.

Look to the UK. easyJet didn't try and compete with BA by trying to become BA. They kept it simple and have grown profitably in a cut throat competitive environment. Now BA are trying to become EasyJet.

VA are trying to compete with QF by trying to become QF. It hasn't worked. They should go back to keeping it simple. There's nothing wrong with be a run of the mill LCC if it keeps you in profit and your shareholders happy.

[Deano969]

Solution

1 brand
3 classes

Roll Tiger into VA
737 / A320 fleet
8-12 business class seats up front

80-100 economy seats
32' pitch, meals, baggage, lounge, FFPs included

60-80 "BLUE" budget seats up back (Tiger pricing)
29"-30" pitch, buy meals, pay for excess baggage, no FFPs

1 management team
1 admin team
1 marketing team
etc

Fuller flights
Upgrade opportunities
Easier scheduling, particularly on thinner routes

Think of it NOT that VA flights would have discount seats and therefore less revenue

Think of it like
Adding premium economy seats into Tiger frames
From reports, Tiger is making a little bit of profit
Adding better revenue seats should turn small gains into big gains right ?

[aintsaying]

Deano969, I think that "little profit" TT makes will evaporate later this year when their maintenance costs go up.

[hoss]

Spot on Deano

[porch monkey]

Where were all you genii when the CEO's job was up for grabs? VA has $1.5 Billion in the bank. What could possibly go wrong?:rolleyes:

[Berealgetreal]

I think Brett Godfrey floated the idea of splitting economy (Lcc/normal economy) in either 07 or 08.

[Boe787]

Flew with SAS last year,inter europe, and they have exactly what Deano is saying!

They have Business class,the standard euro type, just 3 seats with middle one blocked off,but very good leg room, catering, lounge access etc,
Then they have Economy plus, more legroom than standard Y, meal service,ffp and free checked baggage, for anyone paying top tier economy fares or their gold frequent flyers.
Lounge access on economy plus, only for gold frequent flyers,

Then they have standard economy at the back, less legroom, pay for meal and checked baggage,but they did offer coffee tea or water for free!
They also had a cabin divider so they could reduce the number of Economy plus seats if required, which gave some economy passengers a bit more leg room.

The big advantage for SAS business travellers, by not splitting brands, is more frequency!
So on all the routes were Virgin and Tiger both fly at the moment, all those Tiger flights would be branded Virgin, capacity increase for Virgin brand at no cost!

[romeocharlie]

While I agree that someone needs to kick out the 'game changer' and the rest of the money wasting board, SAS is closer to Air NZ than VAH in many respects including fleet simplification and renewal, population serviced, lounge renewal and introduction, destinations, geographical location and sustainability programs (both part of Sustainable Aviation Fuel Users Group).

Scandinavian Airlines 2015, Annual Report with Sustainability Review November 2014 <http://www.sasgroup.net/en/wp-content/uploads/sites/2/2016/02/SAS-Annual-Report-2014-2015-B.pdf>

Back on topic, something has to be done soon. Unfortunately I am a shareholder and spend every day watching JB et al. wheel out every excuse under the sun why they aren't making money when everyone else is. :ugh::ugh::ugh::ugh::ugh::ugh:

[BPA]

I see the recent announcement regarding PER-AUH as a positive move. The demand for travellers using the airports in the sandpit as a connection to Europe is declining with most travellers still preferring the Asia stop over. Why start a service, loose money on it and then stop it, best to pull the pin before the start. EY already have a daily B787 PER -AUH service, which is sufficient for the current demand, without the need for VA's 3 days a week service.

VA will now have another airframe to continue A330 transcon services as well as sufficient number of A330's for it's planed expansion into Asia.

With regard to the 737MAX deferment, all airlines defer orders. Look at QF they deferred the B787 orders until this year and have just announced they are delaying the A320NEOs on order for Jetstar. From a passengers perspective there are no being cabin enhancements in both the MAX and the NEOs and from the a fuel saving costs the benefits of the new engines etc are next to nothing on the golden triangle routes. The fuel saving coots kick in on the longer sectors. So why pay a premium price (above the cost of the current aircraft) for the MAX and NEO for no immediate gain. Airlines such as Fiji Air who are also taking the MAX, will see immediate fuel saving gain as the majority of their flights are over 3 hours.

And for those who thing QF's B787 Perth to London direct flights will be a great experience for the passengers have a read of this.

https://blogs.crikey.com.au/planetalking/2017/02/25/qantas-787-premium-y-seats-anything-dreamy/

[romeocharlie]

Someone should mention to Ben Groundwater upon looking at the seatmap that those 3 toilets will service the 42 business class seats and the other 4 will service the plebs.

I agree it's a good decision to bin the PER-AUH route, but it shouldn't have existed/they shouldn't have sold seats to begin with. If the ex-CEO can't get fuel hedging right in this climate, they won't get fuel saving anyway.

Now I'm not saying I want the CEO's job, but I'm also not getting paid his or any board member's wage - these are people who SHOULD have known better, and are paid to.

[Mach2point7]

RC: according to this article, the premium economy pax share the J class lavs:

https://www.ausbt.com.au/first-photos-qantas-boeing-787-premium-economy-seats

I agree with your comments re the PER-AUH route. So perplexing to cancel it before it even commences; makes you wonder what they were thinking to offer it in the first place.

[romeocharlie]

According to that article, yes. According to every other aircraft Qantas currently operate, no.

When you look at the 747, the pax to toilet ratio is higher, and they seem to cope just fine. The only issue QF currently have is the 330's that have been converted from JQ that only have one lav in business at the front (Que the 20 odd people trying to change back from their PJ's at top of descent).

[Derfred]

Do business class passengers pee more often than economy class passengers? Maybe they do due to the quantity of alcohol consumed.

[Mach2point7]

Sorry RC, but which QF reconfigured A330s have a Premium Economy cabin ?

[romeocharlie]

Sorry Mach, I meant the 74's... Clearly not what I wrote. I'd be surprised if they do let them use it but stranger things have happened.

[Mach2point7]

No problem RC; we have all done it. But back to the topic of Virgin Australia, today's daily update from Airline Route indicates that Malindo Air intends to fly daily 737-800 services from BNE-DPS-KUL from the end of this month. It all sounds a bit preliminary, but may add pressure on VA's DPS operations after the TT shemozzle. I think that would also be the only direct service between BNE and Malaysia.

"Malindo Air in the GDS and the week of 26FEB17’s OAG Schedules Analyser update filed preliminary schedule for Brisbane, tentatively scheduled to commence on 31MAR17. The airline plans to operate Kuala Lumpur – Denpasar – Brisbane routing on daily basis, on board Boeing 737-800 aircraft.

OD157 KUL1805 – 2110DPS2200 – 0540+1BNE 738 D
OD158 BNE0715 – 1145DPS1245 – 1545KUL 738 D

Reservation is currently not available on its website. Service on Kuala Lumpur – Denpasar routing is also to see an increase from 2 to 4 daily, based on current listing, instead of from 2 to 3 daily."

[Octane]

I just don't get why Virgin fly SYD-DPS but not MEL-DPS. Surely the demand is there? Doesn't make sense...

[Snakecharma]

Octane, they used to, but transferred it to Tiger. And the rest, as they say, is history!

[The Bullwinkle]

Apparently they had to transfer it to Tiger in order to save the company! :ugh:

[Mach2point7]

They seem to have spat the dummy on all the three routes they transferred to Tiger i.e. MEL, PER and ADL. In addition to no MEL-DPS you now have other anomalies such as flying PHE-DPS but not PER-DPS, the latter having Indonesia AirAsia (3 per day), Jetstar (3 per day) and Garuda as well. The booking engine shows the cheapest option for PER-DPS as a 15 hour trip with connection in BNE !

[Octane]

I hear you guys, but why not bite the bullet and just resume the Melb-DPS service. Is it out of sheer bloody mindedness, refusal to admit they screwed up? I thought running an airline was all about bums on seats. My brother (Virgin then Tiger painted Virgin) reckons the flights from Melbourne were nearly always chockers! As a staff traveller, more often than not I couldn't get on (not Tiger, Virgin staff travel didn't apply) and had to travel with other carriers..
I still don't get it!

[Berealgetreal]

Confusing indeed as I'm pretty sure Air Asia pulled out of Melbourne. I could be wrong.

The big question in my mind is:

Virgin had the narrowbody DPS market to themselves for years so what planning was there to lock in those customers for the long term?

[porch monkey]

Lets see, a thread about VA, and someone mentions "planning" and "long term" in the same sentence. BWAHAHAHAHA:eek:

[TWOTBAGS]

You guys here are all talking about DPS and market presence etc etc It looks to me that you are glossing over the reality.
Its not the volume of the market its the yield, the market to DPS from all those ports you mention is real, but the price Joe Public is willing to pay is bottom dollar.
The vast majority of the tattooed, sunburnt unwashed simply don't care, they want to save as much on the flight to spend on Bintang.
They could not tell the difference between any of the carriers you mention, except the hostie was a good sort and it cost $10 for another bourbon on JQ.... but I bet you that they know exactly the cost of TT v JQ v GA v JT in exactly the same way as my kids know the local bus schedule by memory but cant remember to clean their rooms!

If you cant make a buck at it because the cost of business in this country is so high compared to the costs of business there, whether it's economies of scale, costs of financing, equipment and labour costs. It all cost more here than there...... why would you bother if there is not the point of difference that you can extract more from the punter...... aka YEILD.

:E

[The Bullwinkle]

The whole Tiger debacle came about because the head kicker that JB employed from the states thought it would be a perfect way to threaten existing VA pilots into taking reduced employment conditions or else all the flying would go to TT.
Now he's gone and the whole debacle is blowing up in the managements face.

[Berealgetreal]

Well I heard from a few sources that Tiger infact were making good money on it.

They were selling out the carts.
Cabin crew rarely got "sick" in DPS resulting in less empty ferries and cancelled flights.

The triangle is great but I think you need to be able to make money elsewhere within the business otherwise there isn't a long term.

Either way pulling out all together I think is both sad and concerning.

[goodonyamate]

Where have TT's slots into DPS gone?

[VHFRT]

Where have TT's slots into DPS gone?


Is DPS slot restricted? I guess it's basically the Heathrow of the east...

cost $10 for another bourbon on JQ

$10! No wonder they make money...

[Octane]

"Where have TT's slots into DPS gone?"

Nowhere, Virgin still own them..

Out of interest, the one and only time I flew Tiger the airfare was close to $1000 and the product was cr%p. At that price I guess they would've been making a bit of dough....

[coaldemon]

DPS is heavily slot controlled. I thought that TT only had Charter flights to DPS so Non Sked ones which are worthless.

[Roj approved]

i believe VA can't take over the MEL,ADL and PER to DPS because they don't have enough airframes available. they transferred the 737's to TT from the International 737 fleet, and they can't just use the domestic 737's.

it sounds very convoluted, but that seems to be the VA way at the moment

[Octane]

Get the paint stripper out and reclaim the Virgin 737's?!

Do Tiger actually have any 737 rated crew yet? Suppose they should, it's been long enough....

TWOTBAGS;

"but the price Joe Public is willing to pay is bottom dollar."

I hear you but over the years (I first went there in '86 and lived there part time for years until recently so know it pretty well..) the type of people frequenting Bali has altered. Sure, in the old days it was surfers, families on the cheap, drunks looking for sunshine and the cheapest beer in town and that was about it. Plenty of punters to run a Tiger LCC operation or two.

However in recent times there's been a surge of far more well heeled people who frequent Seminyak, Nusa Dua and Changgu etc (i.e. would never venture to Kuta, Legian, buy bintang T shirts or wander the streets drinking same), lease Villas or live there part time and are cashed up (and not afraid to spend it). They wouldn't take a Tiger flight to Bali in a pink fit :yuk:.
For them, the Virgin product was the preferred carrier I'm guessing. I used Virgin many times and they did it pretty bloody well. I would hazard a guess those people now choose to fly Garuda (surprisingly good and a full service airline) or perhaps Jetstar.
To wind up, my guess is there is plenty of demand to sustain a decent quality/ profitable service to Denpasar from Melbourne. i.e. like there was before the great Tiger experiment. But then I'm not Virgin Management so what the hell would I know?! :}

[Mach2point7]

Malindo Air confirms BNE-DPS-KUL flights:

https://www.ausbt.com.au/malindo-air-finally-confirms-brisbane-flights

[Octane]

I'm informed there is a serious manpower crisis within Virgin. However I'm sure there's still plenty of Bali qualified tech crew about because until very recently they were sitting idle waiting to re qualify for domestic duties..
Poor buggers must be missing the surf and cold Bintangs. Business in a couple of establishments I know in Nusa Dua would have nose dived :-(

[wheels_down]

Latest on the grapevine is the Airbus is now staying at Tiger.

The Tiger 737s are going back to Virgin. First one will be back at Virgin next week.

[Going Nowhere]

Yep, VOR went back to TSV to be repainted yesterday.

[framer]

Anyone likely to put their hand up and say " that was a poor decision I made there, I'll look into my DM process and do better in the future" ? Or is it all due to " challenging market conditions" ?

[Mach2point7]

Sounds like management by random number generator.

[Open Descent]

I'm not sure what you are all on about.

VA effectively pulling out of DPS is the best news I've heard for a while. We may well have had plenty of bums on seats, but the cost of having split the AOC and having one section of the workforce doing sweet FA whilst the other was getting flogged was never going to be a strategy for success.

Good riddance I say...

[Mach2point7]

Perhaps there is more news yet to come, but VA does not appear to me to be "effectively pulling out of DPS" when it is operating 20 flights per week (BNE, SYD and PHE), presumably without a split AOC and the problems associated with that.

[Open Descent]

when it is operating 20 flights per week (BNE, SYD and PHE), presumably without a split AOC and the problems associated with that

You are quite right in the services you mentioned, but it is still being flown by VAI pilots only.

Don't get me wrong, I enjoyed operating in and out of the place, but it doesn't change my opinion about ditching Bali altogether though. With the current AOC set up and associated inefficiencies from an already under resourced pilot group, and a myriad of other problems that still can't see us making a dollar out of full cabins, I'd be happy to see the end of it.

And most pilots that I know that want to keep operating there aren't doing it for the love of Bali, they just don't want to say goodbye to sub 40hr rosters and be re-introduced to 4 sector days and max hours...... and who could blame them??

[Falling Leaf]

Latest on the grapevine is the Airbus is now staying at Tiger.

The Tiger 737s are going back to Virgin. First one will be back at Virgin next week.

Yep, VOR went back to TSV to be repainted yesterday.

I heard a similar rumour. Management were asked this question explicitly at the last teleconference and stated that the re-fleet was going ahead, and that the Tiger 737 frames would go into short term storage for a few weeks prior to redeployment with TT....

So which is it? Is the rumour false or are VA management pathological liars?

[Going Nowhere]

Last time Tiger parked airframes, they parked them in ASP. Those were the Singapore registered ones mind you.

There's not much space in TSV to park frames other than inside the paintshop.

[porch monkey]

Falling Leaf, I'll have $10 on option 2.

[The Bullwinkle]

Falling Leaf, I'll have $10 on option 2.
I'll have $1000 on option 2.

[aintsaying]

So what is VA going to do when TT stops making a profit due to the increase in maintenance costs?
And I am not talking about airframe types, I'm talking about maintenance provider.........................

[wheels_down]

BAE getting the chop? John Holland 2.0?

[Open Descent]

Not jealous Basil and certainly not management, just concerned that the company is going to hell in a hand basket and the current DPS arrangement, in my opinion, is helping it along the way.

I had my stint at VAI when it originally was set up and came back about 6 months ago of my own volition.

Not sure why my remarks would have you accuse me of creating some sort of divide among the pilot group, the hours I spoke of were reflective of every roster example I have been shown by the crew involved.

Don't be so defensive, it was just an opinion...not an accusation.

[The Bullwinkle]

Not jealous Basil and certainly not management, just concerned that the company is going to hell in a hand basket and the current DPS arrangement, in my opinion, is helping it along the way.

I had my stint at VAI when it originally was set up and came back about 6 months ago of my own volition.

Not sure why my remarks would have you accuse me of creating some sort of divide among the pilot group, the hours I spoke of were reflective of every roster example I have been shown by the crew involved.

Don't be so defensive, it was just an opinion...not an accusation.
I was also confused by the jealousy remarks. Your post seemed fairly accurate from what I'm also hearing.

The Bali flights are doing very well, business class and economy are usually mostly full and tickets are not cheap. Have a look online at ticket prices and see for yourself.

This sounds more like "management" comments, polishing a turd so to speak!

[galdian]

IF true and the fleet swap is dead in the water - why??

A "good idea" doesn't turn to sh*t overnight, if it was a "good idea" all those months ago for the overall strength of the V group longterm it should STILL be a good idea.

Or was it just a dumb idea right from the start??

And responsibility?? Hands up....anyone?? Surely SOMEONE must be responsible??

OR maybe not!

[The Bullwinkle]

Or was it just a dumb idea right from the start??
You nailed it!

[Falling Leaf]

A "good idea" doesn't turn to sh*t overnight, if it was a "good idea" all those months ago for the overall strength of the V group longterm it should STILL be a good idea.

Tiger were given the responsibility to take Bali off VA and make it work. They couldn't do it with the A320. And I guess they wanted to avoid having a mixed fleet of 737 and A320, so a D was made to re-fleet.

Now that TT is not going to Bali, I guess the original driver for change has gone. The 320 is more then capable of the short haul international flying TT is eyeing to the East and North East of Australia.

Was it a **** idea? Probably. No-one could see how TT were going to do it cheaper, not many changes, and the costs of re-training flight crew & cabin crew, painting frames, ripping out seats etc must have been enormous. Plus the 'experts' saying a narrow body on this route would be competitive when everyone else is using a wide-body. The line to the rear toilets has I've heard extended back too business class on many occassions. Bali has been a noose around Virgins neck from day 1.

It did show one example where JB didn't sing from the Qantas playbook. Most group operators like to split between Boeing and Airbus to cover the risk of any airworthiness issues.

Congratulations maybe to TT flight operations, who are rumoured to instead of just taking all the VA CASA approved B737 manuals and doing a 'find' & 'replace', went and did a re-write of procedures on how to fly a Boeing like an Airbus. That stalling tactic may have just paid off.

[ihavelotsofquestions]

How will this affect (if at all) the guys and girls who are on the recent 18 month 737 contracts?

[galdian]

AFAIK no contract 737 Captains have been employed, happy to be corrected.

[International Trader]

Come on guys,

If I invested in Virgin at the bottom for 16c , at the current 19c, I would have made some 18 % on my money!
I didn't and unfortunately most paid $2 +.

You can't make a silk purse out of a sow's ear so, don't bother.

VB started as a low class / low cost operation and by a stroke of luck it gained a foothold. The instigators foresaw the future and pulled the cream out at the float . The airline has been left to try and find a means to survive ever since.
The initial ( strumpet and Mexican wave) idea worked but , it had a definite shelf life and every move since has been a half hearted effort to transform that worm into a butterfly.
Too many twists,turns,egos ,fleets and offshoots.
Most operators know that full service airlines make small percentage profits and rely on guaranteed income ( protectionism) to pay the bills. VB cannot achieve that.
VB's only chance was to stay small to fill the domestic gap from Jstar and QF.

[Derfred]

You have a pretty good point there IT.

Most airlines are not good long term investments, the only people who make money out of them are the speculators and the crooks. All other investment is strategic.

Branson set it up, and cashed out while it was still a novelty and walked away with a pocketbook of easy cash.

Astute shareholders would have bugged out when he did (and most probably did).

Hence why it is now mainly owned by other airlines who have a "strategic" investment rather than a profitable one.

Jetstar was initially created not to make a profit, but to screw Virgin. (Strategic).
Tiger came into Oz not to make money, but to screw Jetstar. (Strategic).
Virgin bought Tiger, because their move to full-service wasn't working, and they needed to screw Jetstar. (Strategic).
Virgin bought Skywest to screw Qantas, so Qantas bought Network to screw Virgin/Skywest. (Strategic).

The other major airlines only bought into Virgin to screw Qantas. (Strategic).

Is there a pattern forming? :)

[Derfred]

AFAIK no contract 737 Captains have been employed, happy to be corrected.

I did hear a rumour that some F/O's have been employed straight onto 737 type courses.... would they be contract or permanent? Doesn't sound likely.

[C441]

Most airlines are not good long term investments, the only people who make money out of them are the speculators and the crooks.

Or those that know that the share price has been artificially driven low with the intent of "cashing in" and the resources to make that happen……but that would never happen of course.:cool:

[galdian]

I believe the intent was that any contract F/O's employed - for either B737 or A320 - would not be permanent, all contract with no seniority dates applicable.

When the contracts were completed THEN the numbers would be crunched and offers might be made for permanent employment with seniority starting from the END of the contract.

At the same time they would still be recruiting "intake" F/O's as permanent during the rollover who would have a seniority number from the day they joined.

Regards contract Captains in the early days "expectation" was at the end of contract positions as F/O's would probably be expected and IF the stars lined up and there'd been a mass exodus of Captains AND there were no upgradable F/O's then MAYBE there'd be Captain slots to be filled.

Set your own odds of THAT all coming together! :}

Then the pilot deal was made with the V group.
And that, as they say, was that!:p

Once again only my understanding.
Cheers.

[International Trader]

Derfred,

A good comment.

[DutyofCare]

Derfred :ok: :ok: :ok: You are spot on there with your comments !

Derfred: can you pls tell us ( little simple people ) how much longer V management can continue not making a positive announcement for the sake of their employees / share price & future :{ :{ :{

[The Bullwinkle]

Derfred: can you pls tell us ( little simple people ) how much longer V management can continue not making a positive announcement for the sake of their employees / share price & future
They made an amazingly positive announcement today!
Double Chin told us that today was International Women's Day and thanks to Virgin throwing its weight behind White Ribbon Day, less male mysoginist pilots are going home and bashing their wives/girlfriends after dealing with the crap that goes on there every day.
And she should know about being international.
Apparently she's living in Paris and just phoning it in. Not bad for a $1,000,000 a year!
No wonder they're going broke!

[donderwolkje]

What a terrible waste of time all this PC is.
The country is going down the plug hole and we debate social BS like its going to make one poofteen of a difference to how we survive as a country.
We don't own anything thing of substance any more yet we debate narrow self important crap that does not give one important boost to the future of this beautiful country. Been there, done that, and we are heading to the also rans of the world.
Cheers

[Falling Leaf]

The silence from Virgin management was deafening last International Mens Day.

[Wombat]

The Bullwinkle.

Couldn't have said that better myself. Had a good laugh. Very typical of the PC crap shoved down our throats by VA.

Wombat

[Derfred]

Derfred: can you pls tell us ( little simple people ) how much longer V management can continue not making a positive announcement for the sake of their employees / share price & future

I hate to say it but the next positive announcement will probably be that a major shareholder has made another $300M capital injection to keep the Company afloat.

I sincerely hope the management (or a new management) can come up with something to get the airline back onto it's own two feet before it's too late. And I say that as a QF pilot.

[The Bullwinkle]

I sincerely hope the management (or a new management) can come up with something to get the airline back onto it's own two feet before it's too late.
They won't!

[Popgun]

I sincerely hope the management (or a new management) can come up with something to get the airline back onto it's own two feet before it's too late. And I say that as a QF pilot.

Agreed. It will be a disaster for everyone in the long term if we ended up with only 1 airline (group) in Australia.

PG

[Willie Nelson]

To add to what international trader stated:

https://www.virginaustralia.com/au/en/about-us/media/2008/VB_HOLDINGS_ASX_RELEASE/

I think the above announcement was when the rot set in. Aside of the current management concerns that some have, once the majority shareholder divested the comapany of cash reserves, essentially remortgaging the farm, before hitting the road, things were always going to be very difficult. The competition, for all its failings, has always managed its debt levels quite effectively.

The yields in this game are too low.

It is no reflection on the professionalism of those at the coalface that you got screwed by Toll some years ago. I hope it all comes back together somehow.

[The Bullwinkle]

I'm starting to think this is a standard QANTAS strategy.
Send Gary Toomey to Ansett, that gets rid of them.
Send Borghetti to Virgin. Looks like they're going the same way!

[t_cas]

A 45% reduction in debt and over half a billion squirreled into cash reserves, equaling approx 1.5 billion together, is a marked decrease in leverage. This was achieved on top of operating costs. Is this what is being commented on as bad or going backwards?

[virginexcess]

A 45% reduction in debt and over half a billion squirreled into cash reserves, equaling approx 1.5 billion together, is a marked decrease in leverage. This was achieved on top of operating costs. Is this what is being commented on as bad or going backwards?

Correct me if I'm wrong, but wasn't the debt paid down from proceeds received as a result of the capital injection from the chinese? If it had been paid from operating profit, then the underlying profit figure would have been much higher, to the tune of $500m. If I am correct on this Borghetti's claim is not one of having paid down debt, but one of being able to convince yet another shareholder to give him more capital to fritter away on his next fancily named project.

If the debt reduction was a product of JB's brilliant business strategy, then we should see another significant tranch of debt retired in the second half of the year. I bet we don't.

[t_cas]

Correct me if I'm wrong, but wasn't the debt paid down from proceeds received as a result of the capital injection from the chinese? If it had been paid from operating profit, then the underlying profit figure would have been much higher, to the tune of $500m. If I am correct on this Borghetti's claim is not one of having paid down debt, but one of being able to convince yet another shareholder to give him more capital to fritter away on his next fancily named project.

If the debt reduction was a product of JB's brilliant business strategy, then we should see another significant tranch of debt retired in the second half of the year. I bet we don't.

The capital injection you are referring occurred as new shares issued. This issue (and resultant dilution of existing shareholdings) was no where near the levels in the figures quoted. Of course there is creative accounting. A major rivalled displayed that on a grand scale over the years. To refer to JB as the reason.... who will really know. One thing is for sure, financial reporting has become a dark art and I am certain the leader has many minions crunching the numbers to fit.

My point all along is that inflammatory reference to Virgin failing does not help anyone. Facts are airlines are cash cows. The difficulty is in the efficient running of the operation as capital cost and compliance factors are massive and frankly restrict every airline in this country. There will always be personalities that will take advantage of this cashflow for there own advancement. Particularly in management roles when there is a revolving door.

[The Bullwinkle]

My point all along is that inflammatory reference to Virgin failing does not help anyone.
So speaking the truth is regarded as inflammatory, but polishing a turd is okay?
The truth is Borghetti might, and I'll emphasise "might", be a good salesman, but he has no idea how to run an airline.
People are now speaking out from sheer frustration in an effort to make others see the truth about Borghetti and to push for change, hopefully before it's too late, but alas, the board will continue to believe his spin right up to the point where Virgin closes its doors.
The writing is on the wall, it's just a matter of time.

[t_cas]

So speaking the truth is regarded as inflammatory, but polishing a turd is okay?
The truth is Borghetti might, and I'll emphasise "might", be a good salesman, but he has no idea how to run an airline.
People are now speaking out from sheer frustration in an effort to make others see the truth about Borghetti and to push for change, hopefully before it's too late, but alas, the board will continue to believe his spin right up to the point where Virgin closes its doors.
The writing is on the wall, it's just a matter of time.

I am not here to defend JB, I also believe he may not have the solution going forward. Airlines are a big machine. Providing many people with livelihoods. The airline (board) will work it out. Along the way there will be many changes. That is the business. If any poster here knows so much more. Apply for the job.

Frustration levels are high enough all over the shop. Not just VOZ. Negativity breeds the same.

[galdian]

Just wondreing/to clarify - have there been company notices in either tigerair or Virgin (one would hope both) to confirm the fleet swap is officially cancelled??

[BPA]

There has been no announcement re the fleet swap, as there is nothing to announce ie no changes from the plan to replace the TT A320's with B737s. There was a rush to get 3-4 B737s on the TT AOC for the DPS flying, but now that's not happening at least one of those 737's will return to VAA/VAI and will operate with no airline markings on it, as it will eventually go to TT.
VUD is still doing trying flights at TT.

[Open Descent]

I suspect t_cas is from the village and if he is he won't admit it. Pprune gets monitored and 'nice' posts are manufactured to protect the brand.

What absolute rubbish.

Yet again an alternate point of view potentially at odds with your own and the author is accused of being some form of management...

[The Bullwinkle]

Yet again an alternate point of view potentially at odds with your own and the author is accused of being some form of management...
I guess he only made that comment because you would never hear anything like that coming from any of the frontline staff, the actual workers! (Greasy pole climbers excluded)

[virginexcess]

The capital injection you are referring occurred as new shares issued.


That's my point exactly. He used that capital injection to pay down debt, but is claiming that the paying down of the debt has been a result of normal business. If he was able to pay down debt from normal cashflow then, in the absence of a serious downturn, it would stand to reason that he would be able to continue to pay down similar amounts of debt going forward without having to resort to more capital raising. I won't be holding my breath.

[t_cas]

That's my point exactly. He used that capital injection to pay down debt, but is claiming that the paying down of the debt has been a result of normal business. If he was able to pay down debt from normal cashflow then, in the absence of a serious downturn, it would stand to reason that he would be able to continue to pay down similar amounts of debt going forward without having to resort to more capital raising. I won't be holding my breath.

And how much do you think the share issue raised? And the capital injection amount was?

[t_cas]

I guess he only made that comment because you would never hear anything like that coming from any of the frontline staff, the actual workers! (Greasy pole climbers excluded)

Not only inflammatory, but personal.

Not an office dweller. I also try to be a realist.

[Berealgetreal]

I could be wrong but my understanding is that some if not all of the money that came from the shareholders (Etihad last minute) was used to get rid of the very high interest US debt. So there is still money "owed" (possibly the same amount) but less to external institutions. Anyway, as I said, pretty fair chance it's a great deal more complex than that.

I guess people don't understand and thus feel anxious with bills to pay.
Hoping for the best.

[AerialPerspective]

I'm starting to think this is a standard QANTAS strategy.
Send Gary Toomey to Ansett, that gets rid of them.
Send Borghetti to Virgin. Looks like they're going the same way!
I think that's a little grassy-knoll like conspiratorial if you're serious but if not, it is at least amusing that former QF executives who seem to be lauded for the very fact that leave QF are not hugely successful. Could it be rather that QF was right to let them go... with the big guy I'd say yes, he was Strong appointment and was more concerned with his company BMW, birds-it on his window and chewing gum on tiles in the domestic terminal than anything to do with the welfare of the company, like many of Strong's appointments - he was a crony. JB presumably survived the JS era because he was a yes man. None of these people impressed, which is why they were eventually found out for not being very good. The previous QF execs that were dispensed with by JS in many cases ended up being snapped up by other well regarded airlines. I don't think it's QF strategy, I just think it's Boards that don't know much... the company in question in this thread doesn't even supply it's frontline managers with information about how their budgets are tracking, period reports or similar, it all seems to be secret squirrel stuff so is it any wonder that the place doesn't make a profit. I'm told they also spend money on systems that don't get implemented and when they do fully implement a system, liker reservations or airport, it's usually the wrong system. The company seems to be a mess and have very few people who have a clue what they are doing. That's the problem and short of a revolution it would seem impossible to fix at this stage as long as the Village 'cone of silence' and 'bubble' continue to blur out reality.

[downdata]

Wherever they got the money, it's certainly not from their operations - oh look unlevered free cash flow had been negative for the last 5 financial years.

http://i.imgur.com/9x9unfG.png

in MM AUD

That's not the whole story. JB also managed to turn a c. $5.6 billion company to a $2 billion one in the span of 10 years! That's not accounting for inflation!

http://i.imgur.com/ZYLwds4.png

[Aussie Fo]

Whilst I have no experience in this what so ever, when did JB join virgin?

2007/8 somewhere and they were worth not much at the time

Every CEO is lumbered with previous CEO's past choices. Think 380/lack of 777. In virgins case EMB.

I agree he has not made many good decisions but he didn't turn a 5.6 B$ company into the one it is today.

AJ didn't turn QF around either. 400m$ is the fuel price,,250m$ is less interest on the massive right down.

You can float any figures to prove your point, every company does it all the time. Read through the figures and you'll realise airlines are a crap investment.

I just hope they last us all long enough for a good retirement

[The Bullwinkle]

Every CEO is lumbered with previous CEO's past choices. Think 380/lack of 777. In virgins case EMB.

I'll call bull**** on this one.
JB was the one who introduced A330's and it's been a total cluster f@&k since day one, and cost millions and millions of dollars.
He's also responsible for the lowest level of staff engagement in the history of the airline.
It was bad under Godfrey; he's taken it to a completely new low!

[wheels_down]

All white 737 parked up in Melbourne?

[Seriously]

VH-VOR which was one of the VAI tiger 737s been re-configured into virgin config to operate some virgin services before being sent back to tiger at a later date...:ugh:

[Ken Borough]

Is there any truth in the yarn that a number of people Qantas didn't want ("let go") are now doing JB's bidding at VA?

[Berealgetreal]

Early 2010 Aussie FO.

[Derfred]

Of course, Ken, but you knew that right? Fishing?

[The Bullwinkle]

For a million dollars a year, I guess they'll do whatever they're told!

[AerialPerspective]

I'll call bull**** on this one.
JB was the one who introduced A330's and it's been a total cluster f@&k since day one, and cost millions and millions of dollars.
He's also responsible for the lowest level of staff engagement in the history of the airline.
It was bad under Godfrey; he's taken it to a completely new low!
... on top of that what did he get... the oldest most dilapidated rubbish he could find from the desert (XFA, XFB) that were constantly plagued with reliability problems and eventually dispensed with... not good choices by any measure. Many other similar stupid moves as well, Sabre instead of Altea, no automated roster/day of operations software like the mob down the road... regardless of the situation a good CEO can turn things around... what he has 'achieved' is a unit cost that is now higher than QF's (and QF's has come down below VA's while VA's has climbed), EBAs that deliver no savings like, I am told, the Ground one. No, much of this is his own work. Contrast that with Eddington for example, came into Ansett, sold non-core assets and started to get rid of the duplication and turned it around in about 3 years and was on track to turn it into a really viable business until NZ stepped in - he did the same thing at BA and was a sound steward of CX for many years, respected in the industry. But you know, Rod doesn't go around blowing his own trumpet and contributing to FB memes with one-liners, he is just an intelligent, engaging and capable leader who knows how to treat people and motivate them - JB is not.

[Snakecharma]

Aussie FO, the decision to purchase the ejet was the right one at the time, and in my opinion, still is. Which by default makes the decision to remove them no so clever.

There is a definite place for a 100 seat jet in our market, QF cant get enough 717's and the crews and punters love the Embraer.

The investment has been made in getting engineering and crew up to speed on the airframe, the training facilities are all here and we are throwing it away.

We will now fly 176 seat jets with 76 punters on them on some routes, at a loss, to "rationalise" the fleet.

Yes there is a place for sensible fleet rationalisation, but I suspect this isn't it.

The ATR's were a huge mistake. I would think that keeping the ejet until the e2 came along, then pass the "classic" ejet to vara and replace the f100 would have been a smart move. Do all the training here, leverage off 10 years of operating the Embraer, happy crews who were flying it, happy punters, inflight wifi ife, etc etc etc. the 6 170's could and did do what the ATR's were leased for, and let's face it, give the travelling public the choice of a jet or turboprop, frequent flyer points aside, they would pick the jet nearly every time.

In the widebody world, both the 777 and the 330 are spectacular aeroplanes, but perhaps the better option was to and grab some of the whitetail "terrible teens" 787-8 which are (or were at the time) parked up at everett and use them with a common crew across the 777 group.

The terrible teens were heavy and didn't meet performance guarantees but were cheap and had the necessary capability to do transcontinental and Asia.

[Derfred]

Interesting points, Charma.

I have often wondered how the VA Embraer CASK's compared to the QLink Q400's. My assumption was that the Q400's were probably cheaper but VA had the advantage of the "Jet appeal". I've never paxed on an Embraer so I don't know how internal comfort actually compares.

As to how the Embraers compare to the B717 operation is another interesting one. Especially given that the B717 operation is fully outsourced (on a deal apparently "too good to refuse"). I have paxed quite often on the B717's and they are very appealing from a passenger point of view (quiet and spacious).

But costs aside, it is quite probable that the big advantage QF has in this regional market is simply the frequent flyer program (hence loyalty), which probably drives up yields for QF that VA can't compete with.

If true, VA may have been better off in the long run as a single type low-cast carrier, code-sharing with foreign airlines and Rex. Jetstar's bread and butter has relied almost entirely upon it's A320 fleet (I don't think JQ's experiments with other types such as A330/B787 and Dash-8's in NZ have made any money yet). I recall when JQ tried A330's trans-continental for a short period - didn't work for them.

[BPA]

Flypelican and Velocity have just signed a deal. This could perhaps lead to a closer relationship between VA and Flypelican and give VA access to other regional centres in NSW.

FlyPelican - Earn Points with Velocity (http://www.flypelican.com.au/flying-with-us/velocity.html)

[BPB737]

I would have thought the B737-600 been a better choice over the EMB ,remember the
Clowns bought the EMB 170 and EMB 190 ( Two different engine types) .
If the village idiots had stuck with B737 600/700/800/ ,one type, common crew (pilots and F/A'S, engineering and tech services training , aircraft spares , the list goes on.
Also another great decision from the ring master was to sell the engineering spares, engineering hanger in BNE along with the land option for further hanger expansion ( I guess Engineering is not a core Assett to Virgin ).
Does any one know what Virgin actually owns or is it all leased

[Aussie Fo]

Snakescharma

I'm not saying that all those decisions were not wrong. I totally agree, and in hindsight perhaps Qantas was right in passing on JB.

My only point was that when he took over, it wasn't valued at 5.8B$ as someone else suggested.

As a aside, the CEO puts the plans to the board and the board approves them. Clearly something hasn't gone right, and as much as JB should be held responsible, the board should share the blame for failing to hold him accountable and set quantifiable targets that ones performance can be measured against.

They have all failed the shareholders, and more importantly the staff

[Snakecharma]

BPB, yes they bought 170's and 190's but they got rid of the 170's and replaced them with the ATR's

They have different engines to the 190 as well, plus different everything else. At least with the 170 they had common crews with economy of scale across a bigger fleet, they had a sim and everything in place.

The 737-600 wasn't a successful aircraft, it is much too heavy and cost double what an Embraer cost. Same crews, so yes the same argument used in the para above could easily be applied to justify the 600, however on balance it didn't go that way - for a bunch of reasons.

Atlas, what makes you think the Embraer wouldn't work on resource type strips?

underslung engines yes are more susceptible to FOD but that comes down to a bunch of factors, including strip maintenance, and they have plenty of performance, but you are correct they need cash with none in sight.

Aussie FO, I am with you hoping they stick around long term.

[Mach2point7]

The thing I don't understand is that JB saw at close range all the mistakes that Ansett made with their Noah's Ark approach to fleet planning. Repeating the same mistakes only ten years later is perplexing. How on earth did his board let him do that ?

[Berealgetreal]

Should have just struck an agreement with Alliance instead of buying Skywest. I suspect the margins were too thin for an Ejet on mining runs. Sounds like the only reason VA is involved is oncarriage.

The 737-600 was a failure and it's not been replicated as a MAX.

The E2 was quoted as 25% more efficient so one would think if the Ejet was a compelling product both QF and VA would have turned up to the roadshows when Embraer visited last year. Neither did.

Lets face it, if it was making lots of money Virgin wouldn't have gotten rid of it in a pink fit.

The simpler the group fleet the better. On carriage? Get someone else to do it and let them wear the risk.

2010 fleet should have gone like this:
737-700/800/900
777

With orders for:
737-MAX7/8/9/200
787's

NEO 321 Looks impressive.

Ansett had a hotch potch ageing fleet. In the end if you can't afford the latest gear your days are numbered.

[goodonyamate]

Sounds like QF have picked up all of the Tiger slots. How many that is, im unsure.

[The Bullwinkle]

Sounds like QF have picked up all of the Tiger slots. How many that is, im unsure.
That must be part of the "Game Change" program!

[Fatguyinalittlecoat]

Slots for what/where?

[wheels_down]

DPS slots?

Last time I checked they were VAI's.

[puff]

In my opinion keeping the older 700s with the bigger engines was their biggest mistake, and no matter what way you play it, the EJet whilst nice to ride on has been a mistake. Yes there is a place for a 100 seater in Oz, but all the ones that work in OZ do so because they are old, cheap and depreciated. The E-Jet was brand new - thus expensive to either buy or lease, and doesn't burn a heap less fuel than the 737-700. The 700 also has the potential to carry 30 odd more pax, and you don't need a whole new set of crew to fly it, FAs, GSE as well as parts etc.

The whole Jet vs T/Prop discussion is a null point - ask your average friend without any aviation knowledge when they book on VA or QF website to say ROK if they know they had booked on an ATR/737 or Q400, no one would even know.

E-jet is also apparently experiencing increased PDAs, engine wear and engineering issues as they age. By all accounts American, Air Canada are dumping theirs, and JetBlue is also looking and removing them as well. Crew love it, pax love it, but the accountants (and engineers) hate the thing. Engineers say

Every
Mechanical
Breakdown
Requires
An
Electrical
Reset

Couple of old articles about the problems Jetblue have had with them.

JetBlue CEO Laments Embraer 190 Costs | Commercial Aviation content from Aviation Week (http://aviationweek.com/commercial-aviation/jetblue-ceo-laments-embraer-190-costs)

https://www.bloomberg.com/news/articles/2013-07-30/jetblues-aging-engines-become-a-big-cost-problem

[goodonyamate]

Yes the DPS slots.

Ah the game change program.....where vai outsources to tiger who outsource to qf who outsource to anyone and then all airline management in Australia get what they want...big bonuses and no Australian employees. That game change program? :{

[BNEA320]

No problem RC; we have all done it. But back to the topic of Virgin Australia, today's daily update from Airline Route indicates that Malindo Air intends to fly daily 737-800 services from BNE-DPS-KUL from the end of this month. It all sounds a bit preliminary, but may add pressure on VA's DPS operations after the TT shemozzle. I think that would also be the only direct service between BNE and Malaysia.

"Malindo Air in the GDS and the week of 26FEB17’s OAG Schedules Analyser update filed preliminary schedule for Brisbane, tentatively scheduled to commence on 31MAR17. The airline plans to operate Kuala Lumpur – Denpasar – Brisbane routing on daily basis, on board Boeing 737-800 aircraft.

OD157 KUL1805 – 2110DPS2200 – 0540+1BNE 738 D
OD158 BNE0715 – 1145DPS1245 – 1545KUL 738 D

Reservation is currently not available on its website. Service on Kuala Lumpur – Denpasar routing is also to see an increase from 2 to 4 daily, based on current listing, instead of from 2 to 3 daily." Malindo seemed to start BNE-DPS with little notice, so wonder how their current loads are going.


& just like many Chinese airlines do, seem prepared to undercut Virgin nonstop flights BNE-DPS + do they also offer more checked baggage ? Virgin yields will surely drop on this route, where they sometimes have more than 1 flight a day, or is this just in school holidays ?

[Turnleft080]

Wouldn't fly Malindo/Lion even if you payed me to.