Virgin Blue edging up-market
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Virgin Blue edging up-market
smh 11th May 2006
By Jamie Freed
VIRGIN Blue is working hard to attract more high-paying business and government travellers to combat the effects of a rapidly rising fuel bill.
Virgin Blue chief executive Brett Godfrey also admitted yesterday that the last year had proven "infuriating and frustrating" from an operational perspective - and not just because of the 35 per cent rise in fuel prices.
The airline was used as a pawn in the protracted takeover battle between Toll Holdings and Patrick Corp. Patrick is Virgin Blue's major shareholder, with a 65 per cent stake in the airline, but the holding, though promised to Sir Richard Branson, will probably be transferred to Toll.
Virgin Blue's first-half earnings fell 8.5 per cent to $68.2 million, placing the result slightly below analyst expectations of about $71 million.
But Mr Godfrey said that apart from the fuel prices, which are subject to market forces, the airline was doing a good job managing its costs.
"It's a pretty encouraging result, given the circumstances," he said. "Quite frankly, it was as good, if not slightly better, than our forecasts."
In the past half year the airline launched a heavily marketed frequent flyer program, Velocity, which cut about $7 million off the bottom line.
Velocity is part of Virgin Blue's strategy to transform itself into a "new world carrier" with a mix of the attributes of low-cost carriers like Jetstar and legacy carriers like Qantas.
Virgin Blue is hoping to attract more business traffic with new airport lounges to be relaunched at the end of this month and is soliciting more business from government departments.
"What we probably want to do is let slip some of the lower-yielding [leisure] traffic and pinch the higher-yielding traffic, and that will come," Mr Godfrey said.
Virgin Blue is also building a new reservation system which will improve its ability to code-share with other airlines and to book domestic journeys for incoming international passengers. It should be completed by the end of the year.
Virgin Blue revealed it was in discussions with two unspecified international airlines to help shift incoming international business from Qantas domestic flights to Virgin Blue.
Emirates Airlines has said it was interested in this so-called "interline" arrangement in the past; Singapore Airlines ranks as another likely partner.
Virgin Blue also continues to study the lucrative Sydney-Los Angeles route as an expansion possibility but Mr Godfrey said it was unlikely to launch trans-Pacific flights without a guarantee of daily access.
He said Virgin Blue's board of directors would make a decision about the route after a feasibility review was completed in September. The airline is still considering whether to have one or two seating classes and what type of aircraft to operate.
The airline did not declare an interim dividend yesterday. Although Virgin Blue declared a maiden dividend of 25c a share last year, it was widely viewed as a defensive move by Patrick against the Toll bid.
Mr Godfrey said the airline had the ability to declare more fully franked dividends in the future but "we can't keep going on 25c a share, I can tell you that, for too long".
Chief financial officer Keith Neate said Virgin Blue had lost $4 million of interest on its cash holdings in the past six months due to last year's $265 million dividend payout.
Virgin Blue shares closed 6c lower at $1.69 yesterday.
By Jamie Freed
VIRGIN Blue is working hard to attract more high-paying business and government travellers to combat the effects of a rapidly rising fuel bill.
Virgin Blue chief executive Brett Godfrey also admitted yesterday that the last year had proven "infuriating and frustrating" from an operational perspective - and not just because of the 35 per cent rise in fuel prices.
The airline was used as a pawn in the protracted takeover battle between Toll Holdings and Patrick Corp. Patrick is Virgin Blue's major shareholder, with a 65 per cent stake in the airline, but the holding, though promised to Sir Richard Branson, will probably be transferred to Toll.
Virgin Blue's first-half earnings fell 8.5 per cent to $68.2 million, placing the result slightly below analyst expectations of about $71 million.
But Mr Godfrey said that apart from the fuel prices, which are subject to market forces, the airline was doing a good job managing its costs.
"It's a pretty encouraging result, given the circumstances," he said. "Quite frankly, it was as good, if not slightly better, than our forecasts."
In the past half year the airline launched a heavily marketed frequent flyer program, Velocity, which cut about $7 million off the bottom line.
Velocity is part of Virgin Blue's strategy to transform itself into a "new world carrier" with a mix of the attributes of low-cost carriers like Jetstar and legacy carriers like Qantas.
Virgin Blue is hoping to attract more business traffic with new airport lounges to be relaunched at the end of this month and is soliciting more business from government departments.
"What we probably want to do is let slip some of the lower-yielding [leisure] traffic and pinch the higher-yielding traffic, and that will come," Mr Godfrey said.
Virgin Blue is also building a new reservation system which will improve its ability to code-share with other airlines and to book domestic journeys for incoming international passengers. It should be completed by the end of the year.
Virgin Blue revealed it was in discussions with two unspecified international airlines to help shift incoming international business from Qantas domestic flights to Virgin Blue.
Emirates Airlines has said it was interested in this so-called "interline" arrangement in the past; Singapore Airlines ranks as another likely partner.
Virgin Blue also continues to study the lucrative Sydney-Los Angeles route as an expansion possibility but Mr Godfrey said it was unlikely to launch trans-Pacific flights without a guarantee of daily access.
He said Virgin Blue's board of directors would make a decision about the route after a feasibility review was completed in September. The airline is still considering whether to have one or two seating classes and what type of aircraft to operate.
The airline did not declare an interim dividend yesterday. Although Virgin Blue declared a maiden dividend of 25c a share last year, it was widely viewed as a defensive move by Patrick against the Toll bid.
Mr Godfrey said the airline had the ability to declare more fully franked dividends in the future but "we can't keep going on 25c a share, I can tell you that, for too long".
Chief financial officer Keith Neate said Virgin Blue had lost $4 million of interest on its cash holdings in the past six months due to last year's $265 million dividend payout.
Virgin Blue shares closed 6c lower at $1.69 yesterday.
If there are any Virgin suits reading, here's my 2 cents worth.
Not 2 class seating ... one class, PREMIUM ECONOMY.
A lot of the great unwashed, like myself, don't want fancy china or swish wine or hot cloths ... standard airline grub is fine as long as I can stretch my legs out. Give us a decent seat pitch (at least 38") and we'll happily fly across the Pacific with you for around 3 grand.
No matter how safe, no matter how great the service, no matter how good the maintenance is ... I refuse to fly across the Pacific with QANTAS's 31" seat pitch. I'll go with an Asian carrier instead.
AirNZ has Premium Economy, but I have this thing about heading south to Auckland first, before heading north to LAX. It's just not right.
Not 2 class seating ... one class, PREMIUM ECONOMY.
A lot of the great unwashed, like myself, don't want fancy china or swish wine or hot cloths ... standard airline grub is fine as long as I can stretch my legs out. Give us a decent seat pitch (at least 38") and we'll happily fly across the Pacific with you for around 3 grand.
No matter how safe, no matter how great the service, no matter how good the maintenance is ... I refuse to fly across the Pacific with QANTAS's 31" seat pitch. I'll go with an Asian carrier instead.
AirNZ has Premium Economy, but I have this thing about heading south to Auckland first, before heading north to LAX. It's just not right.
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Originally Posted by peuce
I'll go with an Asian carrier instead.
AirNZ has Premium Economy, but I have this thing about heading south to Auckland first, before heading north to LAX. It's just not right.
AirNZ has Premium Economy, but I have this thing about heading south to Auckland first, before heading north to LAX. It's just not right.
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If Virgin Blue are serious about attracting a higher calibre of frequent flyer, they'll need to do some serious evaluation of their in-flight cabin crew antics.
Last Thursday I flew DJ829 ML to SY. At some point in the flight, the cabin crew gave their spiel over the PA about what to do on arrival in Sydney (connecting flights, car hire options, etc), although you'd never have guessed it from all the gibberish and uncontrolled laughter. One male and two female crew decided to use the opportunity to slag off at each other - albeit tongue in cheek. Nevertheless, calling each other names and expressing their apparent dislike for certain other crew members over the PA for all to hear, was totally unprofessional and embarrasing to listen to.
The following day I caught DJ842 SY back to ML. This time it was a Pacific Blue aircraft and crew operating a Virgin Blue service, and the conduct of the cabin crew was no better. An indigenous Kiwi male cabin attendant took the opportunity mid-flight to let everyone know that a certain passenger and his mates were on their way to Melbourne for a raunchy stag night and wedding event. Suffice to say that the PA bordered on the ridiculous 'bro.
I don't have anything against Virgin Blue, and have mostly had enjoyable and safe trips with them. I have a few mates who work as tech crew, and I hold them in high regard. However my most recent experience left quite a sour taste in my mouth, and the crew's conduct on both occasions was quite unacceptable for an operator with aspirations to attract serious business travellers.
Last Thursday I flew DJ829 ML to SY. At some point in the flight, the cabin crew gave their spiel over the PA about what to do on arrival in Sydney (connecting flights, car hire options, etc), although you'd never have guessed it from all the gibberish and uncontrolled laughter. One male and two female crew decided to use the opportunity to slag off at each other - albeit tongue in cheek. Nevertheless, calling each other names and expressing their apparent dislike for certain other crew members over the PA for all to hear, was totally unprofessional and embarrasing to listen to.
The following day I caught DJ842 SY back to ML. This time it was a Pacific Blue aircraft and crew operating a Virgin Blue service, and the conduct of the cabin crew was no better. An indigenous Kiwi male cabin attendant took the opportunity mid-flight to let everyone know that a certain passenger and his mates were on their way to Melbourne for a raunchy stag night and wedding event. Suffice to say that the PA bordered on the ridiculous 'bro.
I don't have anything against Virgin Blue, and have mostly had enjoyable and safe trips with them. I have a few mates who work as tech crew, and I hold them in high regard. However my most recent experience left quite a sour taste in my mouth, and the crew's conduct on both occasions was quite unacceptable for an operator with aspirations to attract serious business travellers.
"The following day I caught DJ842 SY back to ML. This time it was a Pacific Blue aircraft and crew operating a Virgin Blue service, and the conduct of the cabin crew was no better. An indigenous Kiwi male cabin attendant took the opportunity mid-flight to let everyone know that a certain passenger and his mates were on their way to Melbourne for a raunchy stag night and wedding event. Suffice to say that the PA bordered on the ridiculous 'bro."
Pacific Blue do not operate domestic services is Australia.
VB have a number of aircraft painted in PB colours but they are operated by VB crew
Pacific Blue do not operate domestic services is Australia.
VB have a number of aircraft painted in PB colours but they are operated by VB crew
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Thanks for correcting me on that point. Nevertheless, whether it was PB or VB cabin crew, it doesn't alter the fact that the behaviour was still very unprofessional. I wouldn't normally make a big deal about the level of service, and have always thought well of my previous Virgin Blue experiences. I was just gobsmacked that I pax'd on two consecutive flights where the antics of the cabin crew were borderline amateur on both occasions. Which brings me back to the orginal point of my post: While the average Joe probably doesn't give a toss about crew behaviour, serious business travellers expect a higher degree of professionalism - and things will need to change if the airline hopes to attract and maintain this type of business.
Has a lot to do with retaining the more "experienced" cabin crew. Alot of the senior crew have finally had enough of ill treatment, poor conditions and a piss poor EBA (own fault) and are finally leaving in droves. Dont blame them really.
Unfortunately that leaves the less "skilled" cabin crew which invariably show a complete lack of respect to fellow employees and lack professional judgement. It makes me cringe when I hear and see them "act" as you describe.
Cant see it changing either..................
Servo
Unfortunately that leaves the less "skilled" cabin crew which invariably show a complete lack of respect to fellow employees and lack professional judgement. It makes me cringe when I hear and see them "act" as you describe.
Cant see it changing either..................
Servo
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I heard from an DJ insider SYD Blue Room will be closed for a couple of weeks soon and will be re-decked out ... Playstations are being removed, more professional ambiance ... single entry price will rise significantly.
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Slim, you stated
"
If Mr Godfrey cant work that simple fact out then there is something very wrong!
Very true about professional travellers expecting a more professional attitude from cabin attendants rather than antics.
But then again wouldnt that contravene what Richard Branson calls "the Virgin Attitude and Experience" in making flying fun?
On the same hand if senior cabin attendants are leaving in droves it is still incumbent upon the company to set the standards and tone of in flight service.
Perhaps they can reach a happy medium between the two demands.
Why not put your observations in a letter to Godfrey? He can't change what he doesn't know about
If Mr Godfrey cant work that simple fact out then there is something very wrong!
Very true about professional travellers expecting a more professional attitude from cabin attendants rather than antics.
But then again wouldnt that contravene what Richard Branson calls "the Virgin Attitude and Experience" in making flying fun?
On the same hand if senior cabin attendants are leaving in droves it is still incumbent upon the company to set the standards and tone of in flight service.
Perhaps they can reach a happy medium between the two demands.
'qfcainer', you aren't gunna squeeze an extra inch outa me without a fight.
The QANTAS site doesn't give the seat pitch figures for Economy (I wonder why?)
However, "Seat Guru" does, and they have no reason to fib. You can check the link:
http://www.seatguru.com/airlines/Qan...ng_747-400.php
However, I'll stand (stretch) corrected if you can find 32" on the QANTAS site.
The QANTAS site doesn't give the seat pitch figures for Economy (I wonder why?)
However, "Seat Guru" does, and they have no reason to fib. You can check the link:
http://www.seatguru.com/airlines/Qan...ng_747-400.php
However, I'll stand (stretch) corrected if you can find 32" on the QANTAS site.
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Hey!...get with it guys!
Back in 64', when I joined this illustrious industry of ours, an ex Biggin Hill Spitfire pilot was my Captain on the DC3 when I started my line training with Ansett.
One of the first things he said to me was:
"Son, always remember, the Airline is not here to service the public, the public is here to service the Airline".
42 years later, how true still is that statement?
