VAustralia New Routes
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I doubt if there's enough cash anywhere in VB/PB/Poly to save VA.
There are only 2 things that would save this now; One is a massive economic turnaround, and that ain't goin to happen anytime soon. The second is a cash injection from outside the group. Don't know of anyone who would put money into this right now.
New routes to South Africa ???? Whatever they are smoking in bullsh!t castle has certainly affected their minds rather badly. The losses on the pacific should surely focus their attention on basic survival of the Australian Virgin group.
There are only 2 things that would save this now; One is a massive economic turnaround, and that ain't goin to happen anytime soon. The second is a cash injection from outside the group. Don't know of anyone who would put money into this right now.
New routes to South Africa ???? Whatever they are smoking in bullsh!t castle has certainly affected their minds rather badly. The losses on the pacific should surely focus their attention on basic survival of the Australian Virgin group.
Whispering "T" Jet
Don't know of anyone who would put money into this right now.
...............and you're right Zepp, it would be sad to see this exercise bring down the main group.
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Glass half full
Why all doom and gloom?
V Oz will have budgeted an initial loss.
Delta likewise, except we know they have a bigger (US Domestic) problem.
Historically, QF has confronted two US carriers on a number of occasions. The route goes into a loss for everyone, and one US carrier goes away.
This time we two Aussies against two Yanks. Betcha they indulge in some (legal) collusion.
The high seat factors (and profitability) in recent times also suggest that new entrants will grow the market.
Pity about the GFC
V Oz will have budgeted an initial loss.
Delta likewise, except we know they have a bigger (US Domestic) problem.
Historically, QF has confronted two US carriers on a number of occasions. The route goes into a loss for everyone, and one US carrier goes away.
This time we two Aussies against two Yanks. Betcha they indulge in some (legal) collusion.
The high seat factors (and profitability) in recent times also suggest that new entrants will grow the market.
Pity about the GFC
Christ Delta and United are that broke, yet bloodly Chapter 11 saves them, they rip off there creditors, get reborn and do it all again- sounds like some other people of late.
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Thats a big call, last time I made a comment like that, even though it was 100% FACT I got into trouble.................and a couple of months later I was proven right as evidenced by another thread here.
This is no doubt a totally different story, but a big call all the same.
Mods if need be delete this post and the one above!
This is no doubt a totally different story, but a big call all the same.
Mods if need be delete this post and the one above!
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MC
Yes - that's a huge call. I would have thought that until the VA operation exposes real cash flow issues (and it will), the domestic VB cash position as of now would still be one of financial solvency, in the order of several hundreds of millions of dollars.
I just can't believe that VB's passenger numbers, yield and cash flow at this point in time would cause fuel companies to act in the manner you describe.
Yes - that's a huge call. I would have thought that until the VA operation exposes real cash flow issues (and it will), the domestic VB cash position as of now would still be one of financial solvency, in the order of several hundreds of millions of dollars.
I just can't believe that VB's passenger numbers, yield and cash flow at this point in time would cause fuel companies to act in the manner you describe.
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Its too late to stop now. I think the ticket prices to LA haven't hit rock bottom just yet. You have seen a huge drop in Business class fares as airlines struggle to fill seats. Premium Economy is at least going to take some of those management types that have to cut costs. Also don't forget it appears that UA and VA are getting closer together. There is already an interline agreement between UA and VB so that is going to be a huge boost from that part of the US market.
VB has forced QF to reinvent itself as Jetstar to compete domestically. They will have to do the same to the USA or they will take another big hit at a time when they can't afford it.
I would imagine that VA has factored into its business model low yields to start with and I doubt that business model is for less than 12 months, more likely it would be 2-3 years.
Can the competition afford to lose pax in the current economic climate. VB has 30% of the domestic market. Can QF afford to share that loss with UA?
Also you usually buy new planes when times are good and that helps you pay for them. When times are bad you hold on. QF is currently doing the opposite, hence the equity raising and dramatic increase in debt.
Only time will tell who is right and who is wrong. I hope that things quickly return to normal because if either of the big two fail it will be a pretty big hit for the Aust economy.
VB has forced QF to reinvent itself as Jetstar to compete domestically. They will have to do the same to the USA or they will take another big hit at a time when they can't afford it.
I would imagine that VA has factored into its business model low yields to start with and I doubt that business model is for less than 12 months, more likely it would be 2-3 years.
Can the competition afford to lose pax in the current economic climate. VB has 30% of the domestic market. Can QF afford to share that loss with UA?
Also you usually buy new planes when times are good and that helps you pay for them. When times are bad you hold on. QF is currently doing the opposite, hence the equity raising and dramatic increase in debt.
Only time will tell who is right and who is wrong. I hope that things quickly return to normal because if either of the big two fail it will be a pretty big hit for the Aust economy.
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WB,
I think the problem is rather who is better protected from a capital (cash) perspective. Looking at the 2 major domestic operators (QF/JQ) and VB, any analysis would suggest VB is far more susceptible to the implications of this downturn and lack of credit. It has no big brother (that I know of), limited cash reserves (some of which is tied up in guarantee funding) and no real capacity to raise capital on the basis of its' balance sheet.
Additionally, internationally, it's flying into a depression forming American market, where travel on VA will be very low on anyone's list of things to do. Routes to South Africa is dreamland stuff.
Don't care how long into the future the VA modelling was originally done, you can bet it never factored the current world economic situation.
I have no idea whether MC's statement above regarding fuel credit for VB is true or not, but everyone needs to realise that creditors right now love cash and in a recession/depression, cash and gold are kings. If they see ANY issues with their debtors, credit terms are tightened and/or it's cash on delivery.
VB will be working overtime to make sure that fuel bills are priority paid. Without fuel, it's all over.
I think the problem is rather who is better protected from a capital (cash) perspective. Looking at the 2 major domestic operators (QF/JQ) and VB, any analysis would suggest VB is far more susceptible to the implications of this downturn and lack of credit. It has no big brother (that I know of), limited cash reserves (some of which is tied up in guarantee funding) and no real capacity to raise capital on the basis of its' balance sheet.
Additionally, internationally, it's flying into a depression forming American market, where travel on VA will be very low on anyone's list of things to do. Routes to South Africa is dreamland stuff.
Don't care how long into the future the VA modelling was originally done, you can bet it never factored the current world economic situation.
I have no idea whether MC's statement above regarding fuel credit for VB is true or not, but everyone needs to realise that creditors right now love cash and in a recession/depression, cash and gold are kings. If they see ANY issues with their debtors, credit terms are tightened and/or it's cash on delivery.
VB will be working overtime to make sure that fuel bills are priority paid. Without fuel, it's all over.
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Good luck to them and the crews flying them.
That 777-300ER is, liek every 777 ever built, an awesome machine, flawless to operate and costs probably 30% less per crossing than the museum flight 4 holers. Even against legacy US competitors using the 777 V-Australia will have a very decided cost advantage and then if their service is even 3/4 as good as Virgin Atlantic.....they should do very well. Every passenger paying full or premium economy will be thinking about it and right now there's few paying more than that.
Now if Qantas had 10 or so 777-300ERs and a handful of 200LRs in the stable to handle the Pacific....very different question altogether. But....that horse has bolted.
I reckon until Jetstar starts across the pond with the 787 there's a great window for V-Australia and as I said at the start...good luck to them.
That 777-300ER is, liek every 777 ever built, an awesome machine, flawless to operate and costs probably 30% less per crossing than the museum flight 4 holers. Even against legacy US competitors using the 777 V-Australia will have a very decided cost advantage and then if their service is even 3/4 as good as Virgin Atlantic.....they should do very well. Every passenger paying full or premium economy will be thinking about it and right now there's few paying more than that.
Now if Qantas had 10 or so 777-300ERs and a handful of 200LRs in the stable to handle the Pacific....very different question altogether. But....that horse has bolted.
I reckon until Jetstar starts across the pond with the 787 there's a great window for V-Australia and as I said at the start...good luck to them.
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Looking at Qantas loads over the next few months I would say there is a market for another Oz-South Africa carrier. Guests from the UK would have another opportunity to experience Virgin to Australia via Virgin Atlantic to JNB then through to PER/SYD on V Australia.
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As a price monitor for various websites, it is of great interest that QF has reduced it's fares from MEL-LAX on the nonstops, but only from 15 Sep 09. (which is when VA start Non-Stops MEL-LAX
)
PAX have been happy to pay the $2500-$3000 fares on this route, then it makes sense to stay with these fares to maximise revenue, people must love fares in that range.
Or have QF been ripping people off and not telling them.
Has to be one or the other
)PAX have been happy to pay the $2500-$3000 fares on this route, then it makes sense to stay with these fares to maximise revenue, people must love fares in that range.
Or have QF been ripping people off and not telling them.
Has to be one or the other
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Refering to my post #165 on this topic
Yeah right
You heard JNB-PER-SYD first here on PPrune
Either i'm a mind reader, or BG tells me what he's going to announce.
Perth is on the map for V Australia, Virgin Blue’s long-haul international division, which took delivery yesterday of its first aircraft — a 365-seat 777-300ER — to launch its service from Sydney to Los Angeles this month.
Speaking exclusively to The West Australian, Virgin Blue CEO Brett Godfrey said V Australia’s planned service from Sydney to Johannesburg later this year could operate through Perth, causing fares to tumble on the route to South Africa.
South African Airways has a monopoly on the route at present.
The launch of V Australia’s Australia-US route from February 27 has already caused a 30 per cent decline in fares, according to Virgin Group president Sir Richard Branson.
Mr Godfrey said V Australia would launch flights from Sydney to Los Angeles and then Brisbane to Los Angeles in April before turning its attention to Johannesburg.
“We are looking at operating through Perth from Sydney to Johannesburg to tap into the resource industry traffic,” Mr Godfrey said.
The airline’s advantage would be its ability to offer the most luxurious transcontinental service for Australian domestic passengers.
V Australia’s 777 is configured with 35 business-class beds, 40 premium economy-class seats and 288 economy-class seats.
Perth is also on the map for Virgin Atlantic, which has expressed a desire to operate non-stop services from London to Perth when it receives its ultra-long-range 270-seat Boeing 787-9 from 2014.
The flights through and to Perth by V Australia, Virgin Blue and Virgin Atlantic raise the possibility that Perth could become a major hub for the Virgin Group.
“We will be linking all our airlines and offering round-the-world fares,” Sir Richard said.
V Australia is now selling Perth travellers some of the lowest standard fares — $1800 return — ever to the US and has linked up with several US airlines for connections to a host of cities.
Sir Richard said he expected fares to remain at low levels “for most of the year”, with a number of promotions planned to stimulate travel in quieter times.
“Our entry (on the Pacific route) will spark a price war,” he said.
Speaking exclusively to The West Australian, Virgin Blue CEO Brett Godfrey said V Australia’s planned service from Sydney to Johannesburg later this year could operate through Perth, causing fares to tumble on the route to South Africa.
South African Airways has a monopoly on the route at present.
The launch of V Australia’s Australia-US route from February 27 has already caused a 30 per cent decline in fares, according to Virgin Group president Sir Richard Branson.
Mr Godfrey said V Australia would launch flights from Sydney to Los Angeles and then Brisbane to Los Angeles in April before turning its attention to Johannesburg.
“We are looking at operating through Perth from Sydney to Johannesburg to tap into the resource industry traffic,” Mr Godfrey said.
The airline’s advantage would be its ability to offer the most luxurious transcontinental service for Australian domestic passengers.
V Australia’s 777 is configured with 35 business-class beds, 40 premium economy-class seats and 288 economy-class seats.
Perth is also on the map for Virgin Atlantic, which has expressed a desire to operate non-stop services from London to Perth when it receives its ultra-long-range 270-seat Boeing 787-9 from 2014.
The flights through and to Perth by V Australia, Virgin Blue and Virgin Atlantic raise the possibility that Perth could become a major hub for the Virgin Group.
“We will be linking all our airlines and offering round-the-world fares,” Sir Richard said.
V Australia is now selling Perth travellers some of the lowest standard fares — $1800 return — ever to the US and has linked up with several US airlines for connections to a host of cities.
Sir Richard said he expected fares to remain at low levels “for most of the year”, with a number of promotions planned to stimulate travel in quieter times.
“Our entry (on the Pacific route) will spark a price war,” he said.
Speaking exclusively to The West Australian
You heard JNB-PER-SYD first here on PPrune
Either i'm a mind reader, or BG tells me what he's going to announce.
Last edited by 7378FE; 7th Feb 2009 at 01:31.