Virgin and Delta airlines plan joint venture
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Virgin and Delta airlines plan joint venture
from news.com.au
DELTA Air Lines and the Virgin Blue say they plan to form a joint venture that will expand both carriers reach between the US and Australia and the South Pacific.
The airlines said today that they would seek regulatory approval to form a joint venture, but would collaborate on codesharing, frequent flyer reciprocity and in other areas in the meantime.
"Together, Delta and the Virgin Blue Airlines Group will be a stronger and more effective competitor by offering consumers greater choice of destinations, frequencies and schedules, all on leading-edge aircraft for network and revenue management,'' Delta executive vice president Glen Hauenstein said.
"For Delta, this agreement is a significant milestone in the expansion of our global network in the Australia and South Pacific region.''
Delta began flying non-stop, daily services between Australia and the United States on Wednesday, July 1.
Chief executive officer of Virgin Blue, Brett Godfrey, said Virgin Blue and Delta made a "tremendously exciting fit''.
"Not only will we offer travellers many new benefits and possibilities, but also the alliance of two new entrant operators will ensure that vital competition is sustained on the trans-Pacific route.''
V Australia, a Virgin Blue Group airline, also operates a daily, non-stop Boeing 777 service between Los Angeles and Sydney, and services three times weekly between Los Angeles and Brisbane.
A new, three times weekly service between Los Angeles and Melbourne is planned for September, 2009.
Virgin Blue shares closed at 29 cents yesterday.
The airlines said today that they would seek regulatory approval to form a joint venture, but would collaborate on codesharing, frequent flyer reciprocity and in other areas in the meantime.
"Together, Delta and the Virgin Blue Airlines Group will be a stronger and more effective competitor by offering consumers greater choice of destinations, frequencies and schedules, all on leading-edge aircraft for network and revenue management,'' Delta executive vice president Glen Hauenstein said.
"For Delta, this agreement is a significant milestone in the expansion of our global network in the Australia and South Pacific region.''
Delta began flying non-stop, daily services between Australia and the United States on Wednesday, July 1.
Chief executive officer of Virgin Blue, Brett Godfrey, said Virgin Blue and Delta made a "tremendously exciting fit''.
"Not only will we offer travellers many new benefits and possibilities, but also the alliance of two new entrant operators will ensure that vital competition is sustained on the trans-Pacific route.''
V Australia, a Virgin Blue Group airline, also operates a daily, non-stop Boeing 777 service between Los Angeles and Sydney, and services three times weekly between Los Angeles and Brisbane.
A new, three times weekly service between Los Angeles and Melbourne is planned for September, 2009.
Virgin Blue shares closed at 29 cents yesterday.
Sprucegoose
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At $642 return (including taxes)
They will both go broke together...
They will both go broke together...
I think its great idea strength in numbers 
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.......for some one with a call sign of BUSTER HYMAN referring to a VIRGIN DELTA..........is just a tad too close to the BONE.
.......eat your heart out Bruno.
Double entendre is alive and well on pprune.
.......eat your heart out Bruno.
Double entendre is alive and well on pprune.
It is sad. Especially when fighting a war of attrition. It's certaimly not about profit at this stage.
The operator(s) with the deepest pockets will win. Or more correctly, may be in a position to pick up the pieces afterwards.
The operator(s) with the deepest pockets will win. Or more correctly, may be in a position to pick up the pieces afterwards.
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MARTIN COLLINS: John Durie | July 10, 2009
Article from: The Australian
Virgin finds ideal partner
VIRGIN will terminate its code-share agreement with United Airlines after signing a deal to create a trans-Pacific joint venture with Delta.
It will be a strategically brilliant deal if Brett Godfrey and his Delta comrade, Glen Hausenstein, can win antitrust approval.
The ACCC in Australia should not pose a problem, but the attitude of the new zealots within the US Justice Department is unknown.
The joint venture is basically a cross between a code-share agreement and full equity swap, which means the two airlines operate as one on the Pacific route without having to complete marriage vows.
Both sides reap benefits because Virgin can channel its domestic passengers on to either its own or Delta planes and offer them more choices once in the US.
The ACCC has knocked back code-sharing deals between Air New Zealand and Air Canada, and Qantas and Air New Zealand, but in both cases the end result would have been one dominant airline.
In this case, the end result is at least two stronger airlines and arguably more competition.
All that is needed now is someone who wants to buy a ticket and everyone will be happy.
The ACCC will certainly take a close look at the deal to ensure that it is not a ruse to free up capacity for other routes, for example, and to test what might happen to the services if the deal doesn't go ahead.
The joint venture announcement came after Delta announced its services to Australia.
Godfrey showed admirable foresight in lining up this deal after the wretched launch of his international aspirations.
Article from: The Australian
Virgin finds ideal partner
VIRGIN will terminate its code-share agreement with United Airlines after signing a deal to create a trans-Pacific joint venture with Delta.
It will be a strategically brilliant deal if Brett Godfrey and his Delta comrade, Glen Hausenstein, can win antitrust approval.
The ACCC in Australia should not pose a problem, but the attitude of the new zealots within the US Justice Department is unknown.
The joint venture is basically a cross between a code-share agreement and full equity swap, which means the two airlines operate as one on the Pacific route without having to complete marriage vows.
Both sides reap benefits because Virgin can channel its domestic passengers on to either its own or Delta planes and offer them more choices once in the US.
The ACCC has knocked back code-sharing deals between Air New Zealand and Air Canada, and Qantas and Air New Zealand, but in both cases the end result would have been one dominant airline.
In this case, the end result is at least two stronger airlines and arguably more competition.
All that is needed now is someone who wants to buy a ticket and everyone will be happy.
The ACCC will certainly take a close look at the deal to ensure that it is not a ruse to free up capacity for other routes, for example, and to test what might happen to the services if the deal doesn't go ahead.
The joint venture announcement came after Delta announced its services to Australia.
Godfrey showed admirable foresight in lining up this deal after the wretched launch of his international aspirations.
Sounds fairly positive fom the Australian. Untill...
"Godfrey showed admirable foresight in lining up this deal after the wretched launch of his international aspirations."
Wretched! Talk about mixed messages.
"Godfrey showed admirable foresight in lining up this deal after the wretched launch of his international aspirations."
Wretched! Talk about mixed messages.
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So the American Tax payer bails out an airline, a year or two down the track they 'expand' onto a route with atrocious yields, while bleeding money in an economic crisis.
Also, the Pacific may be "atrocious" now, but very recently it was a "cash cow" and it will be again.
Delta is simply trying to run UAL off the route and out of business.
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Although Steve Creedy's JV tag is a little too much journalese, the deal is good for the market provided V do not see it as a cute way of freeing up a few of their 777's to go elsewhere - the thing we must remember is that almost every international route now comes with a reciprocall bilateral obligation (or the connotation thereof).
Both Delta and V have Pacific access - even with diminished yeilds there are still Aussie crew flying - it's important to keep this notion and encourage both companies to look at the 'whole of network' integration rather than sector pax/psm. Simply we must avoid cannibalising the existing Pac route approvals otherwise, ultimately it will open the way for the likes of SIA which would cut Aussie jobs.
AT
Both Delta and V have Pacific access - even with diminished yeilds there are still Aussie crew flying - it's important to keep this notion and encourage both companies to look at the 'whole of network' integration rather than sector pax/psm. Simply we must avoid cannibalising the existing Pac route approvals otherwise, ultimately it will open the way for the likes of SIA which would cut Aussie jobs.
AT
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UAL Furlough,
Bankruptcy protection, by its very nature, is what I mean by the bail-out. You can't honestly tell me Delta would still be around if they didn't have this protection. As for the pacific being a 'cash cow', granted, but in an economic crisis, I thought consolidation would be priority.
Bankruptcy protection, by its very nature, is what I mean by the bail-out. You can't honestly tell me Delta would still be around if they didn't have this protection. As for the pacific being a 'cash cow', granted, but in an economic crisis, I thought consolidation would be priority.
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vb look like raising capital to bolster their cash backing.In a trading halt
Does anyone have Delta's latest reported profit/ loss?
Does anyone have Delta's latest reported profit/ loss?
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Virgin's joint venture deal with Delta has upset Tiger
Steve Creedy, Aviation writer | July 17, 2009
Article from: The Australian
THE proposed joint venture between Virgin Blue and Delta Air Lines hit its first hurdle this week with Tiger Airways vowing to lodge an objection to the deal with Australia's competition regulator.
Although the Singapore-based carrier does not compete across the Pacific, Tiger chief executive Tony Davis said the airline objected to the anti-competitive nature of the tie-up. A major shareholder in Tiger, Singapore Airlines, also has a long-standing interest in the Pacific route, although its enthusiasm has diminished since the number of competitors flying non-stop between Australia and the US mainland doubled.
Mr Davis said that Tiger was opposing the application because it believed airlines should be willing and able to compete on international routes without seeking to collude and forcing fares up.
He said Tiger believed this was how consumers received the best prices and product.
He also noted the timing of the deal as ironic given that Virgin Atlantic had been guilty of price-fixing with British Airways, and Qantas had pleaded guilty in Canada to being part of a freight cartel. "The other irony, of course, is that airlines like Tiger in Australia are prohibited from even trying to compete on these routes because of the restriction on us operating internationally at the moment," he said.
"So ... we think it's a bit rich that those who are given the ability to compete then run off to the competition authorities saying we can only do it if you let us collude with our competitor."
Virgin Blue's V Australia unit has been bleeding money on the US route and Virgin announced last week that it would seek anti-trust immunity to enter into a joint venture with Delta, which began daily services between Sydney and Los Angeles earlier this month.
Under the deal, the airlines would share reservations codes, pool revenue, collaborate on route and product planning, as well as use each other's planes to fly passengers on the most efficient and direct route.
Analysts have applauded the move, saying it would help stem
V Australia's losses and make it an increasingly viable competitor for high-yield corporate accounts.
They do not believe anti-trust immunity, which needs to be obtained in Australia and the US, will be a problem but estimates of how long it will take vary from six months to more than a year.
However, Tiger is unlikely to be the only airline to object to the proposal: United Airlines is also seen as a strong possibility, although it has yet to tip its hand, and Air New Zealand is likely to be another.
The joint venture comes as speculation ramped up this week that Virgin was seeking a cash injection.
The group did little to dampen that speculation when it requested a trading halt on Monday in response to media speculation it would this week announce a $400 million capital raising.
It subsequently released a carefully worded statement to the ASX refuting the details of the report in The Sydney Morning Herald, but stopped short of denying it was looking for cash.
Some analysts have also speculated that Virgin could seek a deal with Air New Zealand, but many industry observers disagree. The Australian understands there have been no talks between the two.
At least one analyst believes there is no immediate need for a capital raising. "While VBA would like a larger cash balance and we expect it to continue to burn cash over the next six months, we don't believe there is any need to raise new cash as VBA is releasing it through asset sales and the rate of cash burn is declining," Merrill Lynch's Kevin O'Connor said in a note.
Meanwhile, Tiger itself has also become the subject of speculation, with financial sources suggesting the airline is on the prowl for cash to build up its Australian operations.
Tiger is understood to be offering a significant equity in its Australian operations and is believed to have approached several companies in Australia and New Zealand.
There are also rumours that Singapore Airlines, which has been hard hit by the financial crisis, has become less enthusiastic about its investment in the airline.
Singapore's problems were underscored yesterday by June statistics, which showed passenger numbers down 19.2 per cent as passenger loads fell 3.5 percentage points to 75.7 per cent.
Steve Creedy, Aviation writer | July 17, 2009
Article from: The Australian
THE proposed joint venture between Virgin Blue and Delta Air Lines hit its first hurdle this week with Tiger Airways vowing to lodge an objection to the deal with Australia's competition regulator.
Although the Singapore-based carrier does not compete across the Pacific, Tiger chief executive Tony Davis said the airline objected to the anti-competitive nature of the tie-up. A major shareholder in Tiger, Singapore Airlines, also has a long-standing interest in the Pacific route, although its enthusiasm has diminished since the number of competitors flying non-stop between Australia and the US mainland doubled.
Mr Davis said that Tiger was opposing the application because it believed airlines should be willing and able to compete on international routes without seeking to collude and forcing fares up.
He said Tiger believed this was how consumers received the best prices and product.
He also noted the timing of the deal as ironic given that Virgin Atlantic had been guilty of price-fixing with British Airways, and Qantas had pleaded guilty in Canada to being part of a freight cartel. "The other irony, of course, is that airlines like Tiger in Australia are prohibited from even trying to compete on these routes because of the restriction on us operating internationally at the moment," he said.
"So ... we think it's a bit rich that those who are given the ability to compete then run off to the competition authorities saying we can only do it if you let us collude with our competitor."
Virgin Blue's V Australia unit has been bleeding money on the US route and Virgin announced last week that it would seek anti-trust immunity to enter into a joint venture with Delta, which began daily services between Sydney and Los Angeles earlier this month.
Under the deal, the airlines would share reservations codes, pool revenue, collaborate on route and product planning, as well as use each other's planes to fly passengers on the most efficient and direct route.
Analysts have applauded the move, saying it would help stem
V Australia's losses and make it an increasingly viable competitor for high-yield corporate accounts.
They do not believe anti-trust immunity, which needs to be obtained in Australia and the US, will be a problem but estimates of how long it will take vary from six months to more than a year.
However, Tiger is unlikely to be the only airline to object to the proposal: United Airlines is also seen as a strong possibility, although it has yet to tip its hand, and Air New Zealand is likely to be another.
The joint venture comes as speculation ramped up this week that Virgin was seeking a cash injection.
The group did little to dampen that speculation when it requested a trading halt on Monday in response to media speculation it would this week announce a $400 million capital raising.
It subsequently released a carefully worded statement to the ASX refuting the details of the report in The Sydney Morning Herald, but stopped short of denying it was looking for cash.
Some analysts have also speculated that Virgin could seek a deal with Air New Zealand, but many industry observers disagree. The Australian understands there have been no talks between the two.
At least one analyst believes there is no immediate need for a capital raising. "While VBA would like a larger cash balance and we expect it to continue to burn cash over the next six months, we don't believe there is any need to raise new cash as VBA is releasing it through asset sales and the rate of cash burn is declining," Merrill Lynch's Kevin O'Connor said in a note.
Meanwhile, Tiger itself has also become the subject of speculation, with financial sources suggesting the airline is on the prowl for cash to build up its Australian operations.
Tiger is understood to be offering a significant equity in its Australian operations and is believed to have approached several companies in Australia and New Zealand.
There are also rumours that Singapore Airlines, which has been hard hit by the financial crisis, has become less enthusiastic about its investment in the airline.
Singapore's problems were underscored yesterday by June statistics, which showed passenger numbers down 19.2 per cent as passenger loads fell 3.5 percentage points to 75.7 per cent.