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Old 17th Jan 2005, 04:48   #1 (permalink)
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Virgin ‘Happy Hour’ Innovation – Fares from $1


7 Days a week ‘Happy Hour’ Innovation – Fares from $1*

In a global aviation first, Australia’s leading low fare airline Virgin Blue has announced it will introduce a brand new and ongoing sale called ‘Happy Hour’.

The concept will involve offering deeply discounted fares across various domestic routes for sale via the internet for one hour every day of the year on a permanent basis. For example, today’s fares between Melbourne and Adelaide will start from $1 (plus taxes, fees & surcharges of $30)* for one-way flights, for travel within 30 days of booking.

‘Happy Hour’ will be from 1-2pm (EDST) and will offer the best deals of the day via the Virgin Blue website www.virginblue.com.au. Different routes will be on sale each day.

Virgin Blue Chief Commercial Officer, Stefan Pichler, said, “This is a fantastic and very exciting initiative in that it has never been done before and represents a great opportunity for travellers to snap up a bargain any day of the year, not just at off peak times when it suits the airline. The ‘Happy Hour’ concept clearly reflects Virgin Blue’s determination to cement its position as Australia’s true low fare, high service leader.”

He continued, “When Virgin Blue launched four and a half years ago, people got excited about one-way fares under $100 and this innovation goes even further. Virgin Blue has been the market leader in terms of affordability and we are happy other carriers have come to realise the low cost model is the way of the future.”

The Virgin Blue website will go live with ‘Happy Hour’ today and will feature a countdown from 9am until the sale time at 1pm. Travellers eager to snag a deal can log on, browse through the various routes and travel dates and snap up the deals that take their fancy. Virgin Blue will put thousands of seats on sale each ‘Happy Hour’.

The key objective for the airline is to go beyond the ad-hoc sales it does on a regular basis and offer a permanent sale product which will offer bargain flights on routes that have a handful of spare seats that would otherwise fly empty.

Stefan Pichler continued, “It’s a win for everyone in that the consumers get bargain basement fares using spare seats on our aircraft. We will continue to innovate with our airline, our fares and our people and are confident that ‘Happy Hour’ will be a popular choice for people wanting to go on a spontaneous romantic weekend, a surprise trip to visit family interstate or to visit a business client in person.”

The ‘Happy Hour’ initiative is the latest innovation from Virgin Blue with Guests gearing up to take advantage this year of Live seatback TV, the newly launched BlueCheck (self check-in kiosks) and a number of other projects.

* Fares are strictly limited and only available on selected routes and flights for Internet bookings only. Bookings can be made between 1pm – 2pm (EDST) daily (or until sold out if earlier). A credit card surcharge of an additional $2 per person per one way flight is applicable. Taxes, fees and surcharges are correct as at 18 January, 2005 and are subject to change.


Last edited by Wirraway; 17th Jan 2005 at 06:15.
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Old 17th Jan 2005, 10:29   #2 (permalink)
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It is indeed a great marketing tool, with upsell their major hope if the ultra cheapies arent available. The problem is that when they threw the huge promo onto the website, I couldn,t find the agents login.

I had to finally found it lurking under site map and lost 10 minutes on hold - never answered while I ratted for it.

Obviously DJ don't want to lose another 5-8% to Agents on the ultra cheapies, not that it is worth our while unless charging $10 per passenger sector as a service fee, but I was trying to book short haul fares worth $700.00 for 2 passengers.

Marketing needs a good hard slap up the side of the head for that little gem.

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Old 17th Jan 2005, 15:55   #3 (permalink)
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Tues "Sydney Morning Herald"

Air fares go to ground in price war
By Alexandra Smith, Transport Reporter
January 18, 2005

Just when it seemed air fares were as low as they could go, Virgin Blue has sparked a new fare war, introducing $1 internet tickets - plus $30 taxes and surcharges - for flights between Melbourne and Adelaide.

Not to be beaten, its competitor Jetstar yesterday followed with $1 fares between the same two cities, but because Jetstar flies to Avalon rather than Melbourne Airport, the surcharges and airport taxes are just $23.

The two airlines, and Jetstar's parent, Qantas, have been battling it out for several weeks, each trying to beat the other by advertising very low fares - last week it was $9 - but not including the additional charges.

The war is likely to continue, with Virgin Blue promising that its daily sale, which it calls "happy hour" because the cheapest fares are only available between 1pm and 2pm, was here to stay.

Despite yesterday's low-key sale launch, kept quiet so Virgin Blue could handle the additional website traffic, more than 1000 $1 internet fares were sold, double what it expected.

A Virgin Blue spokeswoman, Amanda Bolger, said the changing daily destinations would not be advertised on the internet because the fares were designed to suit travellers who decided where to go based on price, not location.

"It's a bit like a treasure hunt. People browse through the fares online everyday," Ms Bolger said. "It's really for people who are looking for a romantic weekend away, and they may find somewhere like Adelaide and decide to go there."

But Ms Bolger said tickets would not be as low as $1 every day, and taxes and surcharges would vary depending on which airports the flights used. There is also a $2 per person each-way credit-card charge.

Ms Bolger said the happy-hour sale was a "global aviation first", designed to give travellers "a bargain any day of the year, not just at off-peak times when it suits the airline".

A Jetstar spokesman, Simon Westaway, conceded the airline followed suit because it was focused on remaining competitive, but warned it would not simply follow the lead of its rival.

As Jetstar and Virgin Blue went head-to-head in a fare battle, fierce criticism was directed at Qantas following comments by its chief executive, Geoff Dixon, that the airline could not afford to be all-Australian because its competitors were employing staff overseas to cut costs.

If international benchmarks were followed, more than 7000 jobs could be moved overseas, he said. Last night he confirmed the airline was considering moving thousands of jobs offshore.

"We have said for the past three years that we must source more people overseas and that our continued growth of jobs in Australia depended on that."

Mr Dixon said the airline was looking at a range of possibilities, including joint ventures, "which would, if they came to fruition, involve new jobs being created in both Australia and other countries". He said that regardless of any decision about overseas jobs, the airline had no plan for wholesale redundancies.

Commenting on Mr Dixon's earlier statement, the assistant national secretary of the Australian Services Union, Linda White, said they had created a sense of fear because the airline could potentially move a "limitless" number of jobs offshore.

Ms White said 10,500 Qantas staff received postal vote forms yesterday for the latest workplace agreement, but many would question whether to accept it.

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Old 17th Jan 2005, 23:02   #4 (permalink)
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Standby for more downward pressure on staff conditions and salaries to fund this latest "innovation" in ticket pricing.

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Old 18th Jan 2005, 00:01   #5 (permalink)
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INSANE !!!!!! is all I can say. How long do airlines think they will survive with madness as their logic. I truely fear for the thousands of jobs in all airlines when I read stuff like this. It can only sustain for so long as there is usually always one major loser. ............
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Old 18th Jan 2005, 00:14   #6 (permalink)
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Yeah well, Godfrey and co shot their mouth off about how they were going to do QF in.

As a wise man once said - in aviation I've learnt to be on the side of the 600lb Gorilla!!
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Old 18th Jan 2005, 00:34   #7 (permalink)
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I think you are missing the point a little Pete.............
I agree with sleuth, there is usually no winners with these sorts of fares and if you look overseas it is usually the BIG GORILLA's that end up falling. Usually cause they have to support a lot higher cost base during these madness periods.
Jetstar are matching it and who do you think may end up losing the most......May just be Q. When you look at a broader picture, all the bad publicity Q is getting (i.e the 7000 jobs thing), Jetstar (fully Q owned) matching these fares and at the same time underming Q's own market, I think the gorilla may hurt first down the line if its a long drawn out battle. Qantas are making big profits but remember there cost base relative to it's profit is also one of the largest of any airline in the world.
Add to that the imminent start of Virgin Pacific on Q's most profitable route SY-LA, (and we all must surely admit that will hurt their bottom line on this route), I think it may be a rocky road ahead. As Sleuth says there are usually no real winners here.
I also wish sanity would prevail and balanced fares returned for all our job security.
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Old 18th Jan 2005, 04:29   #8 (permalink)
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Fares are strictly limited and only available on selected routes and flights for Internet bookings only. Bookings can be made between 1pm – 2pm (EDST) daily (or until sold out if earlier).
Might be a bit like those stock-take sales the department stores used to have. Remember when only a lucky few made it in the doors and up the stairs fast enough to claim the handful of white goods that were at the rediculously low advertised prices?

I thought they brought in legislation to stop this kind of thing.
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Old 18th Jan 2005, 04:56   #9 (permalink)
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Interesting marketing ploy. A bit like the old standby. The yield managers will be able to have fun with this one for years. Since they are one way fares the out bound sector may seem cheap (plus all the sundries taxes, surcharges and levies), the return leg may not be so cheap. It would be interesting to monitor whether the return sectors suddenly increase doing the course of the one hour special!
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Old 18th Jan 2005, 05:17   #10 (permalink)
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My guess is that JetStar is VB's target.
They're a new start up, with high start up costs & plenty of teething problems, and according to CEO Dixon's latest decree each "section" of the QANTAS group is going to have to prove that they can stand alone and not rely on other parts of the (QF) group to support them.

With very little behind them, how long do you think J* can continue to operate on $1 tickets?
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Old 18th Jan 2005, 23:36   #11 (permalink)
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Kaptin M - the question you really need to ask is how long can VB afford to offer the same??

Judging by todays VB share price plummet of close to 17 % on opening, I believe that question has already been answered.
QF's share price slid by less than 1% at the same time.

Mum and Dad shareholders must be mighty pissed off at how their investment in VB has dwindled with harder times ahead (according to the VB media release).

Invest in an airline????.............yeah right !!

Macquarie Airports was a no brainer to me and has more than paid for my first class overseas holiday, Christmas and next years holiday also!

The only way I'd hold shares in any airline is if they were given to me.
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Old 18th Jan 2005, 23:53   #12 (permalink)
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QANTAS is copping a "Double Whammy" at the moment - Jet Star Asia, QANTAS' little venture in Singapore, isn't coming up to expectations, and is being undercut by SQ (poor old CEO Dicko "didn't expect the fares would be undercut" - he thought they'd just be matched!! ...how much confidence does THAT statement from GOD give QANTAS shareholders?! )
And now Jet Star (Australia) is is being undercut in Oz.
the question you really need to ask is how long can VB afford to offer the same??
The same question was floated when VB introduced their $99 airfares almost 5 years ago!!
They have indicated that it's a long term tactic, one undoubtedly brought about by excess capacity caused by Jet*.

IMO, Virgin Blue have done amazingly well from their inception through to now - I believe the people at the helm know precisely where they're going and how they're going to get there.
If I were a QANTAS shareholder, I think NOW would be the time to be getting out - just as British Airways did!!
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Old 19th Jan 2005, 00:06   #13 (permalink)
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Yes Kap M but at the same time the perception amongst those that control the share price is that VB isnt maybe such a hot bet.
There's perception and then there is reality.
The perception part is described above, but the reality is that VB is failing to live up to its own expectations and is been punished as a result.

Yes, they have done amazingly well especially since their main opposition folded and was handed to them on a platter!
How could you not massively benefit?

As I've said before anyone can ride the gravy train Kap M but when real competition is presented a real GM's true colours and abilities are displayed for one and all to see.

The fact is that they now have real competition in JetStar and its here to stay.
At the same time VB's performance (especially load factor) has waned significantly as a result and they admit that their profit forecasts are down significantly and not expected to improve for some time.

It's obvious that Godfrey isn't the wonderchild that Branson and the media make him out to be.

Kaptin M - the question you have to ask yourself is, "Would I be satisfied that a share I've purchased for $2.25 is now 25% down on its initial float price and has just taken a whopping 16-17% knock on the head (and in a record growth market I might add) with the 12 monthly profit figures looking shaky also?"

Scratching the surface I dont think they've done amazingly well at all, especially seeing that competition doesnt bode at all well with the incumbent management.

Last edited by TIMMEEEE; 19th Jan 2005 at 00:17.
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Old 19th Jan 2005, 00:08   #14 (permalink)
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Perhaps if you took off your 'rose coloured DJ glasses' & looked at the situation objectively Kaptin M, you might be able to see that it is in fact DJ who are caught in the pincers (a 'double whammy' perhps?)

They have JetStar bringing excess capapcity into the market at the budget end, and QF upgrading their Business class product at the top end of town. Virgin's response - only time will tell, but the market doesn't seem to have a lot of faith in them at the moment...

As for Godfrey et al knowing precisely where they're going - laughable! Perhpas rather than keeping it to themselves, they should tell the markets of their crystal clear goals & how they plan to get there - it might save them from having to make embarassing announcements like the one today & their profit downgrade of last year...
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Old 19th Jan 2005, 00:25   #15 (permalink)
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Purerisk.....appreciate what you are saying, but there is no point to be missed. DJ came out and threw the gauntlet down to QF and QF are simply responding.

The battle will be won by the one with the deepest pockets, that aint DJ, and granted, QF may be "dented" in all of this, they won't be the loser, and they won't suffer as so many of the likes of Kapt M dream about.

What Dicko has engineered with his offshoots, Jetconnect, Jetstar Aus and Asia is all part of the master plan to block at every level the likes of DJ. Who knows whats to come?
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Old 19th Jan 2005, 01:50   #16 (permalink)
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Pete!.......... once again (and Im not having a go at you) I think you may be missing again a bit of the lager picture.

It is very easy for all of us to put a slant or view things how we want. But in Qantas terms lets look at a few things. Jetstar asia has not opened at all to how dixon predicted or wants. Operating a new airline in asia in singapore on their terms is much different to Oz.
Jetstar here have more or less taken up routes on Q market and hence taken pretty much there traffic. Look at the figures and you will see last months traffic was still pretty much unchanged.

Its easy to say that Dixon is hedging his bets etc in different ways i.e Jetconnect, Jetstar, Jetstar asia etc etc. But all these are Q owned and there capital and bottom line is obviously Qantas'.

I have no doubt that all these seperate entities are a blocking move but I think also to lower the qantas mainline conditions,

As I also said add on the fact that Q's biggest profit maker routes are about to be opened up (the sy -La) and I think It may be a bit of a bumpy ride.
In terms of the biggest pockets, I think if you look at the size of Patricks pockets combined with bransons and you will see that it dwarfs that of Dixons and Co's. especially when you look at the Q cost compared to profit. As I said before Q operate on a much thinnner line than those of any other airline in the world. The profits are big but so is the cost. If its a long battle I think you may be surprised who falls (especially if the LA profits start sliding.) You may not agree and think Q are invinsible but that is what BA thought, United thought In terms of the LCC's. intereting times indeed ...............
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Old 19th Jan 2005, 05:48   #17 (permalink)
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purerisk....again, there is no point to be missed, your batting for the DJ camp, I'm in the QF camp, so I'm batting for them.

Think we should just agree to disagree. I will say one thing, Dixon is not hedging his bets with the likes of Jetconnect, Jetstar etc, it's all part of a long term plan to sure up QF's position in the region. It may hurt QF that some cannabalisation happens,(though I doubt it) but with the loads Pacific Blue are carrying at the moment, as an example, thats gotta hurt Virgin more!!

Market forces are always going to ensure QF's dominance in this region.

What gets up my nose is the bleating by Godfrey et all when things don't go Virgins way - well hello, without the assistance of Government handouts, Virgin is at last having to stand on their own two feet and they are finding it tough.

I do however concede that Emirates is a bigger threat than the Virgins of the world.

It's good to have rational debate on it though, and yes, we are in for interesting times I'm sure.
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Old 19th Jan 2005, 08:06   #18 (permalink)
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Well Pete, I'm not in either camp, but rather, an "outside spectator" watching bemusedly from the sidelines.
Please explain precisely what this statement of your's means, and how you justify it.
Market forces are always going to ensure QF's dominance in this region.
Or was it just a jingoistic, sounds good one-liner you thought you'd throw in?

QANTAS is battling more than just Virgin Blue (and vice versa), so when you say, " it's all part of a long term plan to sure [sic] up QF's position in the region", are you insinuating that Dixon is willing to sacrifice "Jetconnect, Jetstar etc" to protect the mother company?
I don't see how QF can be "shoring up their position" with those companies you mention - Jet* and Jet Connect - because those companies now fly routes that were once flown by mainline aircraft ie. they operate INSTEAD of QF (aircraft & crews), not in ADDITION to.

From the info I have, Pacific Blue's loads are quite good, with another 7 aircraft being added to their fleet later this year, I believe.

SQ seems to be giving QF more of a run for their money than Dicko counted on, both in Oz, with SQ's stated intention of flying to the USA from Australia, and also in Singapore.
But perhaps the BIGGEST threat to QANTAS is Dixon himself, with the internal staff unrest he is creating, and the backlash(es) and turmoil that will result.
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Old 19th Jan 2005, 09:26   #19 (permalink)

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Hey Pete

You are in the Q camp now? What does ya A320 in ya Flight Sim come with Jetstar Asia livery

Keep on dreaming donkey

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Old 19th Jan 2005, 09:39   #20 (permalink)
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Funny thing is Kaptain M..........I am not in either camp either, quite happily out of that fraternity and watching in as an investor in many pies, not just in the players mentioned here. I think this gives me a pretty good perspective actually as I still have access to much info. I dont really want to see any side go under, but watching the eccomonics of it all Q has a lot lot more to lose as they operate on a much much thinner line...........time will tell I guess.
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