Virgin cuts Canberra, lifts fuel surcharge...
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Virgin cuts Canberra, lifts fuel surcharge...
From the abc news website
Virgin lifts fuel charge, cuts route
"No-frills airline Virgin Blue will increase its fuel surcharge this week in response to continuing high oil prices.
From Thursday, Virgin's domestic surcharge will increase by $4 to $10, while the surcharge on international tickets will double to $20.
Rival airline Qantas announced an increase to its fuel surcharge late last week.
Virgin has also announced it will temporarily stop flying between Sydney and Canberra in early September because of insufficient bookings."
Virgin lifts fuel charge, cuts route
"No-frills airline Virgin Blue will increase its fuel surcharge this week in response to continuing high oil prices.
From Thursday, Virgin's domestic surcharge will increase by $4 to $10, while the surcharge on international tickets will double to $20.
Rival airline Qantas announced an increase to its fuel surcharge late last week.
Virgin has also announced it will temporarily stop flying between Sydney and Canberra in early September because of insufficient bookings."
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Temporarily!! I have rarely seen an airline return to a route after cancelling it. Interesting to see if the Qf groups' fares on this leg will change. Obviously the lack of business class to canberra eventually killed it for VB.
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Taken from AAP
August 23, 2004 - 1:24PM
While Virgin Blue will increase its fuel surcharge fee from August 26 because of continuing record high oil prices it reports its passenger numbers for July increased by 45.8 per cent over the previous year.
Traffic, as measured by Revenue Passenger Kilometres (RPKs) increased 52 per cent while capacity, as measured by Available Seat Kilometres (ASKs) increased 61.3 per cent over the same period.
Revenue load factor decreased by five points to 81.3 per cent, compared to the previous year.
Passenger numbers for the four months to July 2004 increased by 38.3 per cent over the same period last year, Virgin Blue said. RPKs for the four months rose 44.4 per cent while ASKs increased by 59.9 per cent.
Virgin Blue also said it would suspend its Sydney-Canberra service as of Saturday, September 4 redirecting capacity to Tasmania where the demand for its product and service has seen a notable increase.
It had noted stronger loads on its Melbourne-Canberra services that were now up to four daily return flights on peak days and the recently increased three daily Brisbane-Canberra return services.
August 23, 2004 - 1:24PM
While Virgin Blue will increase its fuel surcharge fee from August 26 because of continuing record high oil prices it reports its passenger numbers for July increased by 45.8 per cent over the previous year.
Traffic, as measured by Revenue Passenger Kilometres (RPKs) increased 52 per cent while capacity, as measured by Available Seat Kilometres (ASKs) increased 61.3 per cent over the same period.
Revenue load factor decreased by five points to 81.3 per cent, compared to the previous year.
Passenger numbers for the four months to July 2004 increased by 38.3 per cent over the same period last year, Virgin Blue said. RPKs for the four months rose 44.4 per cent while ASKs increased by 59.9 per cent.
Virgin Blue also said it would suspend its Sydney-Canberra service as of Saturday, September 4 redirecting capacity to Tasmania where the demand for its product and service has seen a notable increase.
It had noted stronger loads on its Melbourne-Canberra services that were now up to four daily return flights on peak days and the recently increased three daily Brisbane-Canberra return services.
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Thylacine;
Could this be a direct result of the Tasmanindians (supposed) dislike of their 'treatment' re jetstar? nothing speaks like results...
Virgin Blue also said it would suspend its Sydney-Canberra service as of Saturday, September 4 redirecting capacity to Tasmania where the demand for its product and service has seen a notable increase.
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SYD CBR flights
Sydney Canberra was never going to work for Virgin and its no point blaming the Government Departments.
The el cheapo market travelled by road in less than 3hours and the business market was not going to come on board to any great extent with only one flight a day.
Even a givaway $19 each way fare did not hit the mark.
end of story
The el cheapo market travelled by road in less than 3hours and the business market was not going to come on board to any great extent with only one flight a day.
Even a givaway $19 each way fare did not hit the mark.
end of story
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DJ dropping YSSY-YSCB is SENSIBLE.
YBBN-YSCB seems a POPULAR route though - I recently flew YBBN - YSCB and return for a vacation (a couple days research at the Australian War Memorial). BOTH sectors had a full aircraft, with nary a seat spare.
Let's face it - Canberra is a HOLE tourist wise. I would estimate that the traffic YSSY - YSCB would be predominately bussinessmen / government, and undoubtedly a vast number would prefer a business class seat. Whilst many businesses and government agencies are bcoming MUCH more economy oriented, I am positive QF is kicking DJ in the bums on seats for that sector.
YBBN-YSCB seems a POPULAR route though - I recently flew YBBN - YSCB and return for a vacation (a couple days research at the Australian War Memorial). BOTH sectors had a full aircraft, with nary a seat spare.
Let's face it - Canberra is a HOLE tourist wise. I would estimate that the traffic YSSY - YSCB would be predominately bussinessmen / government, and undoubtedly a vast number would prefer a business class seat. Whilst many businesses and government agencies are bcoming MUCH more economy oriented, I am positive QF is kicking DJ in the bums on seats for that sector.
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I suspected something was a bit amiss in the Virgin camp when QF made the announcement they were increasing the fuel surcharge. Everything was just WAY WAY WAY too quiet. Usually after QF announces something, Brett Godfrey has his mug on the tube announcing how Virgin will counteract this by "reducing fares by $6" or whatever it may be.
As for VB pulling out of CBR - well that route was never going to succeed to begin with, unless they offered a full service economy and business class. CBR customers are known for being the most demandin... err.. selective out of all ports.
Safe Flying
SG
As for VB pulling out of CBR - well that route was never going to succeed to begin with, unless they offered a full service economy and business class. CBR customers are known for being the most demandin... err.. selective out of all ports.
Safe Flying
SG
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REX considers pulling CBR-SYD
AAP
Virgin dumps Canberra service
Date: 24/08/04
Low-cost carrier Virgin Blue will axe its daily Canberra-Sydney service next week, and Regional Express is considering doing the same within weeks as a direct result of the failure of the Federal Government's "best fare of the day" policy.
The Federal Government set up the policy earlier this year as a means of providing the two privately owned commercial carriers with a larger share of Commonwealth Public Service air-travel business, estimated by Virgin Blue to be worth $300million a year.
However, the strategy has failed to generate any significant extra business for either airline, and Virgin Blue has lost patience and withdrawn its outward-bound morning service and inward-bound evening flight from September 4.
And Regional Express, which operates six weekday return flights to Sydney from Canberra, will wait on the results of independent research before making on decision on whether to cease the service, which has been described as "not financially viable".
Rex's chief executive officer, Geoff Breust, said the company should have enough information "to make a call on [whether or not to end the service] by mid- to late September".
Mr Breust said there was some dispute about the number of government travellers on the route, and the survey would "identify those [public-service travellers] once and for all".
Data supplied by the Department of Transport and Regional Services put the annual volume of airline travellers between Sydney and Canberra each year at almost 860,000.
Government departments have told Rex that 150,000 federal public servants a year use the route. But from its own data the airline believes the "pool" of PS travellers could be almost three times higher than the number quoted.
"The departments rely on information that is given to them by their travel managers, and the main travel manager is Qantas Business Travel," Mr Breust said.
Rex had lost "considerable money" on the Canberra-Sydney service "and we continue to make losses on it now".
"Our situation is that we would be well better off taking our aircraft somewhere else." He said that Rex had provided a maximum fare to all government departments and agencies. "That is a very competitive fare; it is actually a lower fare than our competitors on the route.
"We carried 60,000 passengers on the Sydney-Canberra route last year and that, in fact, is a very low load factor for us; only around 50 per cent.
Virgin Blue axed its Canberra-Sydney service after failing to attract any higher than a "low single digit" percentage of Federal Government travellers.
"While we have seen a small increase in our share of the Commonwealth Government market, it is the case that Qantas continues to have 95 per cent of that market, a most unhealthy situation and contrary to sound competition policy," Virgin Blue spokesman David Huttner said.
Mr Huttner hotly disputed the Department of Finance and Administration's claim on Monday that 14 per cent of federal public servants are using domestic airlines other than Qantas on the Sydney-Canberra route.
Copyright AAP 2004
=========================================
Virgin dumps Canberra service
Date: 24/08/04
Low-cost carrier Virgin Blue will axe its daily Canberra-Sydney service next week, and Regional Express is considering doing the same within weeks as a direct result of the failure of the Federal Government's "best fare of the day" policy.
The Federal Government set up the policy earlier this year as a means of providing the two privately owned commercial carriers with a larger share of Commonwealth Public Service air-travel business, estimated by Virgin Blue to be worth $300million a year.
However, the strategy has failed to generate any significant extra business for either airline, and Virgin Blue has lost patience and withdrawn its outward-bound morning service and inward-bound evening flight from September 4.
And Regional Express, which operates six weekday return flights to Sydney from Canberra, will wait on the results of independent research before making on decision on whether to cease the service, which has been described as "not financially viable".
Rex's chief executive officer, Geoff Breust, said the company should have enough information "to make a call on [whether or not to end the service] by mid- to late September".
Mr Breust said there was some dispute about the number of government travellers on the route, and the survey would "identify those [public-service travellers] once and for all".
Data supplied by the Department of Transport and Regional Services put the annual volume of airline travellers between Sydney and Canberra each year at almost 860,000.
Government departments have told Rex that 150,000 federal public servants a year use the route. But from its own data the airline believes the "pool" of PS travellers could be almost three times higher than the number quoted.
"The departments rely on information that is given to them by their travel managers, and the main travel manager is Qantas Business Travel," Mr Breust said.
Rex had lost "considerable money" on the Canberra-Sydney service "and we continue to make losses on it now".
"Our situation is that we would be well better off taking our aircraft somewhere else." He said that Rex had provided a maximum fare to all government departments and agencies. "That is a very competitive fare; it is actually a lower fare than our competitors on the route.
"We carried 60,000 passengers on the Sydney-Canberra route last year and that, in fact, is a very low load factor for us; only around 50 per cent.
Virgin Blue axed its Canberra-Sydney service after failing to attract any higher than a "low single digit" percentage of Federal Government travellers.
"While we have seen a small increase in our share of the Commonwealth Government market, it is the case that Qantas continues to have 95 per cent of that market, a most unhealthy situation and contrary to sound competition policy," Virgin Blue spokesman David Huttner said.
Mr Huttner hotly disputed the Department of Finance and Administration's claim on Monday that 14 per cent of federal public servants are using domestic airlines other than Qantas on the Sydney-Canberra route.
Copyright AAP 2004
=========================================
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Today's Canberra Times editorial hits the nail on the head:
"IT IS CERTAINLY not in the interests of the people of Canberra to have a single airline in a virtual monopoly of the most important air route to Sydney, but those who want to compete with it must rely on more than pressure on government to improve their competitive position. They must in fact compete - and not only on price, but on service, convenience, flexibility, and probably connections. Given the present Qantas stranglehold, effective since the demise of Ansett, and its particular capacity to satisfy many of those needs, competitors must probably, in fact, do more than match its service, whether to particular classes of passengers, such as public servants, or to the public at large.
Virgin Airlines has announced its intention of dropping out of the route. It blames government, or, more precisely, the apparent failure of public servants to follow government directives about seeking the best fare of the day. Another, Regional Express, says it is reviewing its service, which it has described as not being, at this stage, financially viable. Both are highly competitive with Qantas for fares, but say that they are getting only a tiny share of the bookings by bureaucrats and politicians. Public servants seem instead to overwhelmingly prefer Qantas. Virgin says it is getting only "a low single-digit" percentage of public-service business. The Department of Finance and Administration says that 14 per cent of public service travel is on airlines other than Qantas. Exact figures are in dispute, though an independent study under way may resolve the issue.
About 860,000 people fly between Canberra and Sydney each year. About 150,000 of these trips are made by public servants for their jobs. Their custom is very important, a fair share of it indeed being critical to any airline seeking to survive. That an overwhelming proportion of it goes to Qantas is not that surprising, certainly not depending upon any conspiracy theory such as the fact that a Qantas-associated company has successfully tendered the management of the Public Service's business. The fact is that whatever the Government directive, those who are arranging their travel will seek arrangements that they think will best meet their needs, and represent, overall, the best bargain for the Commonwealth's resources. A few dollars more or less on a straight air fare may mean little, in their judgment, compared with flight times that are convenient and an efficient use of resources, the total time involved in moving from office in Canberra to office in Sydney, or to make further connections, or, if need be, to change arrangements and have the flexibility of returning earlier or later.
For many public servants it is important to be able to leave Canberra early in the day and get the last flight back. Virgin seemed competitive with this; indeed had only a single flight out early in the morning and a late flight back. But some may well have thought that tying themselves to this schedule gave them little opportunity to get home earlier if circumstances permitted, or to rearrange travel if it was necessary. Indeed, they could argue that their employer would be losing money and efficiency for the sake of a few dollars if their complete travel arrangements were predicated only upon the cheapest fare for the air sector.
The problem that this presents, alas, is that it becomes very difficult for a substantial competitor to emerge unless they have massive resources, lots of capacity, and, probably, the time and the bank balances to be able to invest in building up a market. Moreover, the operation of a free market may well tend naturally toward monopoly - the prospect of which led for years to the old two-airline policies, with the limited effective competition which that offered. Since that policy collapsed, and since Ansett collapsed, there have been waves of fresh competitors in the market place, and, when they were there, heavy competition on fares and services. But there have not been so many survivors. And some, Virgin in particular, are not as pure as they claim, in the sense that they cherry-pick routes they expect will be highly profitable, but sometimes fall short on connections, or connection convenience. They have, of course, every right to demand a fair marketplace to sell their wares, if not always quite the right to insist that they are always selling the same products. It is difficult to see what further directives they can squeeze from politicians without some suggestion that they are being propped up.
Equally, however, Canberra citizens, including public servants travelling at public expense, can be reasonably sure that prices will rise unless Qantas has a substantial competitor. Fare competition does not occur from the kindness of Qantas' heart. The passenger volumes in and out of Canberra, and the relative certainties of types of business (and business-class) travel, are such that Canberra ought to be a profitable route for any investor willing to make a serious commitment to it. Virgin's single flight in, and single flight out a day hardly suggested such a commitment.
"IT IS CERTAINLY not in the interests of the people of Canberra to have a single airline in a virtual monopoly of the most important air route to Sydney, but those who want to compete with it must rely on more than pressure on government to improve their competitive position. They must in fact compete - and not only on price, but on service, convenience, flexibility, and probably connections. Given the present Qantas stranglehold, effective since the demise of Ansett, and its particular capacity to satisfy many of those needs, competitors must probably, in fact, do more than match its service, whether to particular classes of passengers, such as public servants, or to the public at large.
Virgin Airlines has announced its intention of dropping out of the route. It blames government, or, more precisely, the apparent failure of public servants to follow government directives about seeking the best fare of the day. Another, Regional Express, says it is reviewing its service, which it has described as not being, at this stage, financially viable. Both are highly competitive with Qantas for fares, but say that they are getting only a tiny share of the bookings by bureaucrats and politicians. Public servants seem instead to overwhelmingly prefer Qantas. Virgin says it is getting only "a low single-digit" percentage of public-service business. The Department of Finance and Administration says that 14 per cent of public service travel is on airlines other than Qantas. Exact figures are in dispute, though an independent study under way may resolve the issue.
About 860,000 people fly between Canberra and Sydney each year. About 150,000 of these trips are made by public servants for their jobs. Their custom is very important, a fair share of it indeed being critical to any airline seeking to survive. That an overwhelming proportion of it goes to Qantas is not that surprising, certainly not depending upon any conspiracy theory such as the fact that a Qantas-associated company has successfully tendered the management of the Public Service's business. The fact is that whatever the Government directive, those who are arranging their travel will seek arrangements that they think will best meet their needs, and represent, overall, the best bargain for the Commonwealth's resources. A few dollars more or less on a straight air fare may mean little, in their judgment, compared with flight times that are convenient and an efficient use of resources, the total time involved in moving from office in Canberra to office in Sydney, or to make further connections, or, if need be, to change arrangements and have the flexibility of returning earlier or later.
For many public servants it is important to be able to leave Canberra early in the day and get the last flight back. Virgin seemed competitive with this; indeed had only a single flight out early in the morning and a late flight back. But some may well have thought that tying themselves to this schedule gave them little opportunity to get home earlier if circumstances permitted, or to rearrange travel if it was necessary. Indeed, they could argue that their employer would be losing money and efficiency for the sake of a few dollars if their complete travel arrangements were predicated only upon the cheapest fare for the air sector.
The problem that this presents, alas, is that it becomes very difficult for a substantial competitor to emerge unless they have massive resources, lots of capacity, and, probably, the time and the bank balances to be able to invest in building up a market. Moreover, the operation of a free market may well tend naturally toward monopoly - the prospect of which led for years to the old two-airline policies, with the limited effective competition which that offered. Since that policy collapsed, and since Ansett collapsed, there have been waves of fresh competitors in the market place, and, when they were there, heavy competition on fares and services. But there have not been so many survivors. And some, Virgin in particular, are not as pure as they claim, in the sense that they cherry-pick routes they expect will be highly profitable, but sometimes fall short on connections, or connection convenience. They have, of course, every right to demand a fair marketplace to sell their wares, if not always quite the right to insist that they are always selling the same products. It is difficult to see what further directives they can squeeze from politicians without some suggestion that they are being propped up.
Equally, however, Canberra citizens, including public servants travelling at public expense, can be reasonably sure that prices will rise unless Qantas has a substantial competitor. Fare competition does not occur from the kindness of Qantas' heart. The passenger volumes in and out of Canberra, and the relative certainties of types of business (and business-class) travel, are such that Canberra ought to be a profitable route for any investor willing to make a serious commitment to it. Virgin's single flight in, and single flight out a day hardly suggested such a commitment.
