View Full Version : Step 1; Virgin wants more

12th Dec 2002, 17:19
Fri "Sydney Morning Herald" 13/12/02

Step 1; Virgin wants more
By Brian Robins
December 13 2002

Blue out, red in ... activity at the former Ansett terminal yesterday.Photo: Nick Moir

Virgin Blue is closer to picking up Ansett's mantle as Australia's number two air carrier after moving into the former Ansett terminal at Sydney Airport yesterday.

The airline's red livery has finally replaced Ansett's blue at all of the main domestic airports, and the company is reviewing its international options, with New Zealand high on the list.

Virgin Blue yesterday held talks with airport officials about gaining access to more space in addition to its six dedicated gates and three shared ones. It said it may also need to talk to Qantas about using some of its gates at the terminal.

The discount carrier is to take delivery of four more planes in the first three months of 2003, three of which will service extra routes out of Sydney.

A spokesman for the airport said the airline had not made a formal approach for additional space, although next week it will be laying over aircraft near the old express terminal, which will allow easy access over the next week.

The discount carrier now has the business market firmly in its sights.

"We're now not just a budget airline," the head of Virgin Blue, Brett Godfrey, said of the broader market now targeted by his group.

He said the airline also hoped to introduce a frequent flyer program. Commanding as much as a third of the traffic on the main trunk routes such as Sydney-Melbourne and Sydney-Brisbane, and about 22-23 per cent of the total airline market, Virgin Blue is planning to roll-out new programs such as frequent flyer schemes, lounges and valet parking next year.

Mr Godfrey conceded Virgin Blue would be paying more to use the terminal.

But, he said, this should be more than offset by increased access to the corporate market, which it hopes will now follow.

The one threat on the horizon for Virgin Blue is the cost of additional security measures disclosed on Wednesday by the Federal Government, which will have to be passed on to the travelling public, Mr Godfrey said.

Privately, airline officials believe the extra security measures could cost as much as $300 million, far more than the $180 million forecast by the Government.

The $5 Ansett levy, for example, is only likely to raise a little over $100 million in a full year.

"If the Government is expecting the industry ... to foot the first $180 million over the first two years, you can rest assured we can't afford to do that," Mr Godfrey said.

"Unfortunately it's going to be the consumer that foots the bill."

Fri "Melbourne Age"

Virgin Blue gets down to business
December 13 2002
By Andrew Heasley

Discount airline Virgin Blue will challenge Qantas for the lucrative corporate market after moving into the former Ansett terminal in Sydney yesterday.

Chief executive Brett Godfrey said the airline was looking at a range of offerings, such as frequent-flyer points, valet parking and corporate lounges, to win business passengers.

Virgin said its foray was the last step in ensuring it could expand and take on Qantas' dominance across the country.

"We will be targeting a new market as of today," Mr Godfrey said, adding that some business-class flyers had shunned the airline because of conditions at its old terminal.

"There's no doubt some people have been discouraged because of some of the difficulties we've had," he said. "This (the new terminal) opens a new chapter for us."

The airline's commercial manager, David Huttner, said business travellers were an important sector. Currently business travellers represented between a third and half of the seven million passengers a year the airline carries and Virgin hoped to increase its share.

The move into the new terminal comes after the settlement of a long-running dispute with the Sydney Airport Corporation over a deal to gain access to Ansett's former facilities.

Virgin will have access to six priority boarding gates at the former Ansett terminal as well as other shared gates.

In Melbourne, Virgin Blue struck a deal with the Melbourne Airport Corporation on July 23 and moved from its makeshift terminal into the vacant Ansett terminal on August 26.

The business sector looks set to get special treatment from Virgin as it woos the corporate market. "Rest assured, it won't be a Golden Wing lounge," Mr Godfrey said. "It will be more like Virgin Atlantic's lounge. It will be a fun place to go."

Also, those who fly Virgin Blue regularly may be able to join a frequent-flyer scheme next year, Mr Godfrey said.

These ideas were being evaluated, he said.

Melbourne Airport Corporation spokesman Geoffrey Conaghan said the new terminal deal would enable more travellers and more services to be accommodated at the northern end of the Melbourne-Sydney link, the world's third busiest air route. Last financial year 5.4 million passengers flew on 35,632 flights between the two cities, with each flight being, on average, three-quarters full, according to government figures.

On Wednesday Melbourne Airport opened a 163-bay business car park next to the Virgin Blue terminal, mirroring the one at the Qantas terminal.

- with AAP

12th Dec 2002, 20:51
Yeah - a business lounge thats a fun place to go.
I can imagine the businessman in one corner trying to read or prepare for a meeting with a kids party going on at the opposite end with helium filled balloons,streamers and screaming kids!

Business people dont want fun, they want to get away from the general rabble and go somewhere where they can work,shower,use a computer/conference room etc, not to mention getting plastered in that process.

13th Dec 2002, 08:01

Commanding as much as a third of the traffic on the main trunk routes such as Sydney-Melbourne and Sydney-Brisbane, and about 22-23 per cent of the total airline market, Virgin Blue....

If that statistic is correct and Virgin Blue have significantly increased market share, this will place a hell of a lot of pressure on Qantas ability to service it's debts, as Qantas appears to have equipped for around 85% of the total market.

There's only so much water in the bucket.

It only took a drop of around 5% in market share to break Ansett..........

14th Dec 2002, 23:58
Yeah good one mate, Qantas is looking real shaky.

dirty deeds
15th Dec 2002, 02:08
As they say the bigger they are the harder thay fall.

Its about time that pilots started to learn some basic economic sence. Maybe Qantas should also include economics to a year twelve standard as a basic entry requirment.

All we have to look at is the history of aviation and realise that no airline is immune from the the possibility that it can and sometimes will collapse, ie: Pan Am, United ( bankrupsey protection ) US Air, Ansett etc etc.

Lets look at Qantas ( by the way read their financial results for the last financial year and you will see that international profits have fallen by 50%), thank god for the Ansett collapse.

Don't be fooled into a false of security, Geoff Dixson is worried and for good reason. He has asked for pay freezes and cost cutting measures for good reason, there is definately a storm comming, if Qantas merges with ANZ you can bet your bottom dollar the Virgin will float, Branson will take some money and run as the past has shown, and Corrigan will have his partnership with SQ. It all makes sence. Virgin will have the lounges, they will have the regional feed and a two class system on trunck routes, all the requirements of the Star Alliance are met. Yet dont forget the fact that operating costs at Virgin are much less than QF ie look at the pay scales for a Capt. at QF compare to a Capt. at VB, they only operate on type ( as per Easy Jet and Ryan Air etc, the true low buget Airlines has even scrached the surface in AUS ).

Old Geoff is scared, that why he has given QF's telecommunications contract to Optus, who owns Optus, Singtel, who own Singtel, the Singaporean Govt, who own SQ, the SQ government. He is doing his best to butter then up or even get them on side, because if they come to Aus and form and alliance or a third airline, you can bet your house that there will be rationalisation at QF. Open up your eyes people, no ones jobs are ever safe in this industry, it just depends where your sitting when the music stops.

By the way, I know for a fact that Geoff is worried about United Airlines operating under bankruptsy protection, for those who don't know how things work in the States, they can keep trading under different rules ( with dept protection ), therefore they can undercut on the Pacific routes to AUS, with a lower operating cost. That has come straight from Dixon's mouth.

15th Dec 2002, 06:13
Torres It only took a drop of around 5% in market share to break Ansett.......... So that's why Ansett went out of business ?


dirty deeds I'm sure Dixon is shaking in his boots (with over 80% of the domestic market) just thinking about all the nasty things Virgin Blue could do his Airline.

Get real you guys!

Speedbrake UP
16th Dec 2002, 22:07
Geoff Dixon is so worried about cutting costs, that he pays all executives there huge bonuses whilst shouting down the workers. Sounds like he is trembling.