idea out of left field-new domestic airline

[BNEA320]

was reading about Neeleman & his new Breeze airline in USA, which was going to use super cheap E195 jets from his Brazilian airline, as a start until his 60 x A220s arrived.

With Breeze start date now postponed, could Neeleman see one huge opportunity in Australia, if VA mark 2 doesn't get off the ground ?

He has the knowhow, he has the jets, he has the pilots/crew & other critical staff.

Are the Azul E195 jets similar to what VA used to fly around OZ ?

Or maybe he just picks up some very cheap B738s/A320s. Plenty of Australian crew available if no VA mark 2.

Everything Neeleman seems to touch in aviation, seems to turn to gold. 1stly Morris air bought out by Southwest, then he was involved somehow with start up of Westjet, then Jetblue, then Azul, then TAP Portugal.

[Capt Fathom]

Why don't you put this in one of your other threads?

[Double_Clutch]

On here we go again...... nice one BNEA320

[Keg]

Lol. Those thoughts you have in your head BNEA320, well not all of them need to be posted on PPRUNE.

[BNEA320]

Why don't you put this in one of your other threads?

Ok will do. Am starting quite a few threads this week. Nothing else to do. Have painted the house, decluttered. Cleaned out the home office. Got finances, what's left in order. Sold shares. Sold stuff I don't need. Got rid of one car. What else ?

[Global Aviator]

I actually don’t think it sounds overly left field.

Who was the bloke who started VB in the first place?

A brand that at one point was gold.

Neeleman clearly knows the game, has the contacts.

At this stage wouldn’t we want someone with a great industry knowledge to get up and going?

[wheels_down]

It would be Indigo starting ops here before anyone else.

Could be a new name, or bring in its Frontier or Spirit brand.

[neville_nobody]

A real hard-core low cost airline won't work here as there are no secondary airports. The airports in Australia will just eat your competitive edge and hand it to QF. Whoever the second player is in the future will have to be some sort of full service carrier with all the trimmings.

[DanV2]

was reading about Neeleman & his new Breeze airline in USA, which was going to use super cheap E195 jets from his Brazilian airline, as a start until his 60 x A220s arrived.

With Breeze start date now postponed, could Neeleman see one huge opportunity in Australia, if VA mark 2 doesn't get off the ground ?


He better get a move on considering it's been reported that Indigo Partners are mulling a move to apply for their own AOC, whether if it's with or without the VA purchase.

[thorn bird]

QUOTE:
"He has the knowhow, he has the jets, he has the pilots/crew & other critical staff.."

Knowhow? Could very well have, but in Australia's unique environment?

A toxic, inept regulator to navigate. Monopoly airports gouging anyone and everyone they come in contact with. Maintenance costs almost double that in the US environment, militant unions and disinterested government. Excise inflated fuel costs.

QUOTE:
"With Breeze start date now postponed, could Neeleman see one huge opportunity in Australia, if VA mark 2 doesn't get off the ground ?"

If he is as smart as you say he is, he's likely to consider Australia not worth touching with a forty foot barge pole.

[DanV2]

It would be Indigo starting ops here before anyone else.

Could be a new name, or bring in its Frontier or Spirit brand.

IIRC, Indigo owns Frontier and Volaris on the American continent, and part owns Wizz Air in Europe.

They have no involvement with Spirit Air.

[bazza stub]

He has the knowhow, he has the jets, he has the pilots/crew & other critical staff.

Where are these pilots etc coming from?

[BNEA320]

A real hard-core low cost airline won't work here as there are no secondary airports. The airports in Australia will just eat your competitive edge and hand it to QF. Whoever the second player is in the future will have to be some sort of full service carrier with all the trimmings.Who said low cost ? Breeze is apparently going to be 2 or 4 class depending on how you look at it.

Neeleman seems to love tech as long as it works properly & save airline money.

>>>>"Breeze business modelBreeze professes that it wants to offer a low cost product - but says it also plans to offer a first class product; so it will not be operating a true low cost carrier (LCC) model.

The proposals do include some LCC features (such as a point-to-point route network, extra fees for additional services, and (originally) a single class of aircraft), but it will not have a single class of cabin (those paying higher fares are promised a 2-2 seat configuration and more legroom) and indeed Breeze says it will charge for "what’s effectively four classes of service, starting with an ultra-low-fare product, from which you can buy your way up the ladder... ". Aircraft will not feature seatback in flight entertainment; instead entertainment will be streamed through the airline's app, which will also be used to purchase flights and upgrades.=10.8333px"
>>>>

Jetblue hardly low cost in traditional sense. TAP Portugal not low cost as we think of it.

He has plenty of experience in all areas.

So all he has to do, is have a decent frequency on the golden triangle (more than JQ, which will never ever have high frequency on the triangle) & be cheaper than QF. Many are looking at cheaper everything at present as recession bites. Not hard to be better than QF & if you've got a cost advantage, you can throw things around like all sorts of freebees. TAP is also a member of star alliance.

Nothing to say new airline couldn't have small lounges at BNE, SYD, MEL.

[Capn Bloggs]

Sold shares.
Right. I'm buyng then. :}

[drpixie]

Nothing left-field in that, a well worn path ... buy "cheap" aircraft, fly for a bit, and go broke ... it's a tradition in Australia.

Compass I
Compass II
Jetgo
Ozjet

... need I go on, I'm sure others can add to the list?

[BNEA320]

Nothing left-field in that, a well worn path ... buy "cheap" aircraft, fly for a bit, and go broke ... it's a tradition in Australia.

Compass I
Compass II
Jetgo
Ozjet

... need I go on, I'm sure others can add to the list?
yes but & it's a BIG but, anyone can get reasonably new A320s/B738s super cheap now, especially when VA structure still around.

VB leased 2 x AN B734 if I remember.

[Fliegenmong]

Surely can't come back as VA 2, that would entail $10m a year to the bearded one, ....would it not?

[rmm]

You were banging on about Alliance taking over everything the other day, how would they compete with this new mob?
Especially Alliance's new Tijuana / Bankstown route.

[MickG0105]

VB leased 2 x AN B734 if I remember.
No, Ansett didn't operate -400s. VB ended up with former AN B733 CZQ. Three others AN -300s, CZR, CZS and CZU, ended up being leased by QF.

[MickG0105]

Surely can't come back as VA 2, that would entail $10m a year to the bearded one, ....would it not?
The brand licencing fee (rumoured to have been closer to $15 million a year under the new and improved deal JB did) is going to be the least of your worries if you want come back as Virgin Mk Anything.

The issue that will be weighing much more heavily on any prospective buyers contemplating trying to soldier on under the Virgin banner is the value of the Travel Bank liability; all those punters out there holding on to travel credit vouchers for cancelled flights. That value hasn't been included in any of the public disclosures yet for the simple reason that it's a contingent liability. While the airline continues to be an airline there's the possibility that that liability can be discharged in the course of its normal business.

So, if you're contemplating buying the carcass and building your business out of the VA customer base then you are pretty well committed to having to honour the travel credits at face value or very bloody close to it. The value of the Travel Bank hasn't been disclosed yet but it is likely to be a very big number, perhaps $1 billion. The value of Unearned Revenue (cash held for flights yet to be flown) as at 31 December 2019 was $1.2 billion and Unearned Revenue is probably a very good surrogate for the Travel Bank.

Whatever the value is, probably 80 percent of that is going to be foregone revenue in your first year of operation. It will hit your bottom line such that year one will be a very significant loss, but more importantly it will hit cash flow. The business will have to be cashed up to the eyeballs to get through its first year. I would think that it will be pretty well diabolical for any buyer who is thinking of continuing to wave the Virgin banner in any shape or form.

[Fliegenmong]

Agree Mick.....100%, but also just saying the 'Virgin' smoke & Mirror trick has to go as well, all that travel bank liability has to be honoured for sure....(but how to fund that!?!?!)....but dropping the, now virtually Toxic 'Virgin' label needs be done also...it does at least save 10 - 15 mi9ll $ a year from someone who contributes nothing but cringeworthy PR stunts?

I'd do that sort of rubbish for 15 mill a year!..

[Momoe]

BNEA320, you're not Elon Musk are you?

[TT738]

Rex leasing 10 jets

[maggot]

BNEA320, you're not Elon Musk are you?

He's tt738 and Melbourneflyer

.....this week

[Section28- BE]

BNEA320, you're not Elon Musk are you?

Hmmmmmm-

So- with 'what' is described 'Above'......., 'ex' the Port-Side of 'Adventure', '****es' and 'Giggles'.............

'What'- Mr 'Momoe' said...............!!!!! +Some/and then some More......

Anyhoo- 'crack' it all open in 72hrs.............. and Rock-ON.......!!!!!

Rgds
S28

[BNEA320]

He's tt738 and Melbourneflyer

.....this week
no idea what you're on about

[galdian]

The brand licencing fee (rumoured to have been closer to $15 million a year under the new and improved deal JB did) is going to be the least of your worries if you want come back as Virgin Mk Anything.

The issue that will be weighing much more heavily on any prospective buyers contemplating trying to soldier on under the Virgin banner is the value of the Travel Bank liability; all those punters out there holding on to travel credit vouchers for cancelled flights. That value hasn't been included in any of the public disclosures yet for the simple reason that it's a contingent liability. While the airline continues to be an airline there's the possibility that that liability can be discharged in the course of its normal business.

So, if you're contemplating buying the carcass and building your business out of the VA customer base then you are pretty well committed to having to honour the travel credits at face value or very bloody close to it. The value of the Travel Bank hasn't been disclosed yet but it is likely to be a very big number, perhaps $1 billion. The value of Unearned Revenue (cash held for flights yet to be flown) as at 31 December 2019 was $1.2 billion and Unearned Revenue is probably a very good surrogate for the Travel Bank.

Whatever the value is, probably 80 percent of that is going to be foregone revenue in your first year of operation. It will hit your bottom line such that year one will be a very significant loss, but more importantly it will hit cash flow. The business will have to be cashed up to the eyeballs to get through its first year. I would think that it will be pretty well diabolical for any buyer who is thinking of continuing to wave the Virgin banner in any shape or form.

Very much enjoy Mick's contributions, wondering if an ex AN character with time on his hands to understand and analyse, not too many people attacking his salient points - bit of a first for Pprune.

Reckon you either ask "what happens after VA" or "what happens if VA2", thinking the first option looking more and more the reality of a sad JB legacy.

Cheers

[MickG0105]

Very much enjoy Mick's contributions, wondering if an ex AN character with time on his hands to understand and analyse, not too many people attacking his salient points - bit of a first for Pprune.

Reckon you either ask "what happens after VA" or "what happens if VA2", thinking the first option looking more and more the reality of a sad JB legacy.

Cheers
Very kind of you to say so. And yes, well spotted, an ex AN fellow who now has a bit of time to pick over annual reports, interim reports, ASX filings, etc

[Anti Skid On]

Back in the day on the main page (maybe 20 years ago??) there was a joker who was going to do low cost trans Atlantic using a fleet of L-1011's he had 'access' too. Why does this thread sound familiar?

[DanV2]

He's tt738 and Melbourneflyer

.....this week

I believe BNEA320/TT738 also goes by his two accounts of regular_flier and skier over at Executive Traveller (Australian Business Traveller) posting the same armchair ceo out of left field stuff over there.