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Virgin Blue To Operate Embraer's On Albury-Sydney Route.

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Virgin Blue To Operate Embraer's On Albury-Sydney Route.

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Old 31st Oct 2007, 02:21
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I am surprised that so many people think the Embraer won't be able to compete with Q 400, I just read an article in Australian Aviation stating Embraer have just sold its 300 th E jet in a 43 month period.

It has firm orders for another 700 odd and options for 750 as well, it has been sold to over 40 operators in all parts of the world.

Surely Qantas can't be the only airline out of these 40 other operators able to make correct aircraft selections.

Also I can't believe Virgin didn't do the cost analysis on the E-jet in comparison to the Q 400, if the Q 400 had such a cost advantage don't you think they to would have gone for that option.
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Old 31st Oct 2007, 02:44
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teggun I totally agree, however one would have thought at the time that AN and KD would have done the same with the CRJ too!

The Jets vs Prop thing for me doesn't add up in this day and age, if there are 2 airlines operating people do a search and book the cheapest, the travelling public in general wouldn't know the difference between a Q400 and a E-Jet, but if it's $20 cheaper(with free water at least) on QF on the Q400 i'm sure they will still have the numbers, and surely A-B same route the Q400 has to be cheaper to operate?

It will be very interesting I do agree, especially when we're talking QFlink vs DJ where rex will fall into the equation with Saabs?
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Old 31st Oct 2007, 04:49
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Puff, I think things are about to get a little tougher for REX.
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Old 31st Oct 2007, 04:55
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Never underestimate the power of Gossip in a Country Town.

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Old 31st Oct 2007, 05:50
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The Oracle

Teggun,

GD is on record over at QF stating that QF-Link can't compete with REX due to their (REX's) lower fixed and direct operating costs. Notwithstanding the REX crewing issues discussed in other forums, if both DJ and QF-Link decide to operate brand new $23-24Mill aeroplanes into ABX and have a price war in an attempt to buy the market, REX will be able to outlast them both on whatever below cost fares DJ and QF-Link use to cut each others throats.

If your do the research you will discover that REX is well into a fleet re-equipment project replacing older equipment with as new Saab 340B+WT's. These aeroplanes have new leather interiors, ANC (so the cabin noise and vibration levels are the same as a jet) and extended wing-tips for significantly improved hot and high performance. REX did a 'bulk buy' with Saab and have acquired these aircraft at very cheap rates. All this adds up to making for a very interesting contest with the passenger ultimately being the only winner!!
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Old 31st Oct 2007, 07:13
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I have found all the replies to my initial post very interesting and look forward to an official announcement from V Blue about the actual services
they intend offering,however whilst on the subject ,may I relate the
following experience.
Recently I had to see a client in Melbourne and booked at return flight with
Rex for the 10.20 am service at a very reasonable fare of $96.00,I was
surprised however on boarding to find that I was one of only 12 passengers on the flight,this was a Friday,mid morning flight,not peak hour I admit but it left me wondering how can Rex operate that service based on those passenger numbers and make a profit on that airfare?
What would be the total cost to run that flight based on those numbers,
any opinions ?
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Old 31st Oct 2007, 07:40
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NIGELINOZ,

Your example nicely describes the point I was making in my earlier post. With REX's cost base, particularly as they own outright many of their aircraft, they may have broken even on your sector to ML with only 12 of 33 or 34 seats occupied. In contrast, neither DJ with a new 78 seat EMB170 or QF-Link with a new 72 seat Q400 will cover the fuel bill for a SYD-ABX sector with only 12 passengers at $96.00 (including Govt. Taxes, etc). At the end of the battle, victory will go to the operator who bleeds the least amount of 'red' on their profit and loss statement. With RPT you publish your schedule and fare and then carry whoever turns up on the day. Did you fly back from ML with REX and if so, how many pasengers flew with you on the return flight?
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Old 31st Oct 2007, 08:04
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Oracle.Thank you so much for your input,your posts make very interesting
reading for someone like myself who,as only a student pilot ,has little knowledge of the economics of rpt routes.
To answer your question,I returned on the afternoon service out of Melbourne and I would estimate the aircraft was about three quarters full,
but being a Friday afternoon service I would have expected it to be even busier.If Rex can make a profit with these sorts of pax numbers why does it appear that they are having trouble retaining their pilots?Is it just poor
employment conditions?
Thanks again for your help.
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Old 31st Oct 2007, 08:48
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Ah Nigel dont ask that!

Victory will go to the company that can retain staff not train or hire - retain.
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Old 31st Oct 2007, 09:42
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if there are 2 airlines operating people do a search and book the cheapest, the travelling public in general wouldn't know the difference between a Q400 and a E-Jet,
Agreed the general public may not know the difference, but the business travellers certainly do and they are the ones who always make or break any regional service!
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Old 31st Oct 2007, 12:46
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Interesting comment Howard!
I don't know what regional markets you frequent, but in my observation most business travellers flying regional services are in small to medium business and very keen to save a dollar when they can and the bulk traffic (VFR) absolutely choose their carrier based on price and schedule.
I agree with your comment about the corporate 'high flyers' who may train their PA's to spot different aircraft types from the published schedule information and book their travel accordingly, but their numbers are definitely in the minority on most regional services.
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Old 1st Nov 2007, 02:39
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(Once) daily flights to Port Macquarie announced today.
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Old 1st Nov 2007, 04:46
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VIRGIN BLUE ANNOUNCES DAILY JET SERVICES TO PORT MACQUARIE AND FARES FROM $69*
FLYING START - FIRST NEW REGIONAL PORT TO GET E-JET FLIGHTS!


1 November 2007: Port Macquarie, Australia: Virgin Blue Airlines today announced it will launch flights to the New South Wales city of Port Macquarie from February next year^, following an extensive year long review of more than 21 airports around Australia.

The airline made the announcement and launched $69* launch fares between Port Macquarie and Sydney, during a flying visit to the city with the brand new EMBRAER E-170 jet aircraft that will be used on the new route.

Virgin Blue recently took delivery of the first of 20 of the Brazilian manufactured aircraft which will give the airline the opportunity to start flying to more regional Australia destinations, such as Port Macquarie.

The flight was greeted by Deputy Prime Minister and Minister for Transport & Regional Services and local MP Mark Vaile and Port Macquarie-Hastings Mayor, Councillor Rob Drew.

Mr Vaile congratulated Port Macquarie-Hastings Council and Virgin Blue Airlines on working together to establish a long term commitment to the region.

“As Virgin Blue enters the Port Macquarie market, air travellers will not only get a more competitive environment but further opportunities will undoubtedly come about as Council pursues the full upgrade of the airport,” Mr Vaile said.

“Virgin Blue is undertaking a significant expansion of its fleet. They recognise the benefits associated with growing regional routes like Port Macquarie and they have worked closely with council and the community in coming to a mutually beneficial outcome for its long term commitment to our region,” Mr Vaile added.

Virgin Blue Chief Executive Officer, Brett Godfrey, said, “We are excited to announce Port Macquarie as our first new destination to benefit from the introduction of the E-Jet to our fleet family. Our team has conducted extensive research and site visits to determine the most appropriate new destinations for our network and those ideally suited to these aircraft. Port Macquarie is a fantastic choice due to its airport terminal facilities, the need for competition, tourism growth opportunities and its supportive and enthusiastic council.”

Port Macquarie-Hastings Council has agreed to upgrade its runway to accommodate the E-Jet services in the long term as the aircraft are larger than the turbo prop aircraft currently servicing the city. Virgin Blue’s E-170 has 78 seats while the slightly larger E-190 has 104 seats.

Virgin Blue will launch flights between Sydney and Port Macquarie from 4 February 2008 with a direct daily service.

A special launch fare is now available of $69* one-way on the internet and is on sale until Friday 16 November for travel between 4 February to 15 March 2008 and 29 April to 26 June 2008. Everyday low fares will start from $109, up to 20% lower than the existing fares on offer in the market today.

Brett Godfrey continued, “This will be the first time that the people of Port Macquarie and surrounds will have a jet aircraft service. The E-Jet is an outstanding aircraft, very much like an executive jet, which offers travellers a quiet, comfortable ride, two abreast seating and a quick flying time between Port Macquarie and Sydney of just 40 minutes.”

He added, “We are looking forward to bringing some serious competition to the Greater Port Macquarie region and generating lower airfares and more tourism and business opportunities in the same way we have done with other regional centres such as Coffs Harbour.”

Virgin Blue will announce other new E-Jet destinations in coming weeks and months, with a number of centres under consideration for future Virgin Blue services. The remaining EMBRAER jets will be delivered to Virgin Blue over the next 18 months generating more opportunities for additional new ports.

The Virgin Blue team flew in to Port Macquarie especially to make the announcement and offer a “meet and greet” of the E-Jet to members of the Port Macquarie business and tourism communities. Team members dressed up as Robin Hood, Maid Marion and the Merry Men, highlighting the message that Virgin Blue will be coming to the region to steal from the rich (our fair share of passengers from the other airline) and give to the Port Macquarie community in the way of affordable fares and robust airline competition that it has been deprived of until now.

Brett Godfrey said, “We anticipate the competition will be inspired by our announcement of impending services to offer their own more reasonable fares and we applaud them for that in advance and look forward to keeping them honest when we begin our flights to Port Macquarie in February next year. The beauty of competition is that it’s a win-win for the community and for consumers and we can’t wait to add Port Macquarie to our expanding national route network.”

Virgin Blue has invested more than AUD $850-million in the fleet of new EMBRAER aircraft which will have dual benefits in terms of opening up new route opportunities, as well as providing flexibility and additional frequency on existing Virgin Blue routes. Virgin Blue is the only large commercial airline in the Australia to operate the E-Jets, which will take on a number of routes that are currently serviced only by turbo prop aircraft.

Connections will be available from Port Macquarie via Sydney to Adelaide, Brisbane, Melbourne and Canberra.

^ Subject to regulatory approval
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Old 1st Nov 2007, 07:13
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Oracle, most business travellers I have met are either government employees or work for large multi-nationals, on average I suspect this would cover around 50% of all midweek regional travellers! These people generally pay the fully flexible fare and more concerned with convenience and travelling at times which suit them, rather than cost, provided the schedule suits, they will fill those jets, business people love jets! End of story...
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Old 1st Nov 2007, 07:25
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“Virgin Blue is undertaking a significant expansion of its fleet. They recognise the benefits associated with growing regional routes like Port Macquarie and they have worked closely with council and the community in coming to a mutually beneficial outcome for its long term commitment to our region,” Mr Vaile added."

I don't think that QF-Link will have much to worry about with DJ only providing one service per day! The hidden costs of upgrading airport facilities and including the provision of full checked bag screening for jet operations will unfortunately be borne substantially by the good citizens of PMQ.

The sector length SY-PMQ is around 180NM and therefore far too short to afford any advantage to a Jet aircraft over QF-Link's DHC-8's. Conversely the Turboprop will operate this sector and any other sector out to 350NM far more cheaply than the Jet. At the end of the day the customer wants a consistently cheap fare and frequency as well as in-flight service, so this is going to be very interesting!!
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Old 1st Nov 2007, 07:35
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Howard,
I just saw your last post... and am delighted to see that you agree with most of what I have said. I am curious, however, are you in business, regional aviation, or some other line of endeavour either in or out of aviation? As for me, I am actively involved in the regional aviation business and have been for a very long time.... so let's agree to disagree and let market dynamics do their stuff!

Incidentally when the RJ 'craze' commenced in the early 1990's in the US, aeroplane salesman coined the nice little phrase of 'prop avoidance' to inculcate in the minds of regional aerplane purchasers that passengers preferred Jets.

In order to test this notion to see whether they needed to change to Jets, several large European regional airlines conducted exit surveys on their business customers, which was easy to do as nearly all regional activity in Europe is day return business flying. At the end of these surveys the Europeans concluded three things, ONE the business traveller demanded a quality product, consistent OTP and low prices, TWO the European business passengers didn't care whether the aircraft was a Jet or a Prop so long as the first set of criteria were satisifed and THREE Americans are very gullible people!!

Last edited by THE ORACLE; 1st Nov 2007 at 07:48.
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Old 1st Nov 2007, 07:59
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My most recent experience has been with regional airlines and while it was a reasonably small market that I worked in, I have not seen anything in other States to change my mind. I have spoken to a number of smaller companies in the search for that 'perfect' position and they all seem to rely on Government and/or major companies as the mainstay of their businesses, or to develop new routes!
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Old 1st Nov 2007, 11:37
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Having done the SYD-ABX flight a few times on the SAAB and Dash and recently flown on the VB E170 to CNS - there is only one winner. The E170 leaves the rest standing
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Old 2nd Nov 2007, 01:45
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HO HO HO – IT’S OFF TO ALBURY WE GO!
JINGLE JET! VIRGIN BLUE ANNOUNCES $69* FARES
2 November 2007: Albury, Australia: Virgin Blue Airlines today announced it will launch flights to the city of Albury^ after a 12 month evaluation process. The team made a flying visit to the city in the new E-Jet to make the announcement, dressed as Santa and his Elves bringing an early Christmas present of $69* launch fares and an executive style jet aircraft service to the people of the Albury-Wodonga region.
Virgin Blue’s validation team and commercial team members conducted numerous visits to Albury over recent months to ascertain the viability for Virgin Blue to begin services to the region. Albury was included on a short list of more than 20 regional airports around Australia under consideration following the delivery of the first of 20 new EMBRAER E-jet’s direct from Brazil.
The aircraft is slightly smaller than Virgin Blue’s existing 737 aircraft which means a plethora of new destination options, low fares, competition and affordability for more regional communities across the country, including Albury.
Virgin Blue Chief Executive, Brett Godfrey, said, “Albury was a clear front runner from the moment our team touched down there due to the enthusiastic response, its demographics and existing airport facilities. The EMBRAER E-Jet is ideally suited to markets of this size and we are very much looking forward to bringing Virgin Blue flights to the people of Albury for the first time.”
Virgin Blue worked in close consultation with the Council who were an enthusiastic campaigner and supporter for additional air services.
The airline will launch flights between Albury and Sydney from 5 February 2008, offering an immediate double daily service for the convenience of both Albury and Sydney Guests.
Brett Godfrey continued, “Our research has indicated that a jet aircraft service is highly desirable and top of the “wish list” for travellers so we have listened to these needs and will launch with not just one flight but two flights a day and we are hopeful of getting our fair share of support in return.”
To celebrate the announcement, Virgin Blue has launched a “Ho Ho Ho Jingle Jet” fare of $69* one way on the internet on sale now until 16 November 2007 for travel between 4 February 2008 to 15 March 2008 and 29 April to 26 June 2008.
The airline will initially launch with a Sydney-Albury service and will closely monitor demand for that route before evaluating other potential new routes in and out of Albury.
Brett Godfrey added, “The E-Jet will usher in a new era of air services for Albury, we are keen to banish the days where regional centres are only serviced by turbo prop aircraft and we are adamant that in centres like Albury, travellers are just as deserving of high quality, efficient and affordable flights as capital city commuters, whether they are travelling for business or pleasure.”
The flying time between Albury and Sydney will be approximately 40 minutes and Guests will have the option of either an aisle or window seat in the executive style 2x2 leather seating configuration.
Today’s announcement came hot on the heels of yesterday’s unveiling of Port Macquarie as a new E-Jet route also from February next year.
The E-Jet will also provide Virgin Blue with greater flexibility and the ability to increase frequencies on existing routes. Along with brand new destinations, it will also allow the airline to re-enter the high frequency Canberra-Sydney route from February 2008.
Virgin Blue will continue to evaluate other potential new ports for the EMBRAER to service with the 20 aircraft being delivered over the next 18 months.
Brett Godfrey finished, “This is the beginning of a new and exciting phase and Albury is the first of many new ports that will benefit from the increased competition as Virgin Blue continues to expand its route network.”
Virgin Blue will offer connections from Albury via Sydney to Adelaide, Brisbane, Canberra, Hobart, Melbourne and Perth.
^ Subject to regulatory approval
DJ's schedule will offer the following:-
SYD-ABX 0930 (1040) and 1530 (1640); ABX-SYD 1110 (1205) and 1710
(1805).
Let the Games begin!!
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Old 2nd Nov 2007, 02:06
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Thanks Oracle,Interesting,but as someone who regularly visits clients in
Tasmania why would I want to fly V Blue ABX-SYD-HBA?
I might as well continue doing what I do now.
Rex from ABX-MEL and DJ (V Blue) MEL-HBA..
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