next virgin blue ?
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any airline with lots of aircraft could do this. Makes perfect sense.
A full service carrier, but with lower costs than QF & VA.
All the airline would need to do, is partner with some existing small Australian or New Zealand carrier & upgrade the AOC to include B737's or A320's or both & then be patient. It could fly international to start with, to various Australian ports.
It could call it self Australian.
As QF retreats to golden triangle & "gives" routes to JQ, the new airline could pounce, before VA fills the void.
Not many business people want to fly JQ, unless QF messes with JQ business model & turns it into another VA, which could be the big plan all along.
A full service carrier, but with lower costs than QF & VA.
All the airline would need to do, is partner with some existing small Australian or New Zealand carrier & upgrade the AOC to include B737's or A320's or both & then be patient. It could fly international to start with, to various Australian ports.
It could call it self Australian.
As QF retreats to golden triangle & "gives" routes to JQ, the new airline could pounce, before VA fills the void.
Not many business people want to fly JQ, unless QF messes with JQ business model & turns it into another VA, which could be the big plan all along.
A new low cost entrant cannot happen here until we get airports. You have zero cost advantage in this country because of this. LCC's pay the same price for everything as everybody else. They start off with a low cost staff but this eventually disappears.
Just have a look at the regional airline model in the USA it has completely imploded. People don't fly for free forever and so once the wages start going up the whole model doesn't work. There could be a mass shut down of the regional airlines in the US very shortly.
You need to operate to smaller airports where it is cheaper and there is less congestion. This is exactly what Easyjet/Ryanair/Southwest do and they have low cost models and pay reasonable to unbelievable salaries in the case of Southwest.
Until we get secondary airports in Sydney/Melbourne/Brisbane/Perth the LCC model is a non starter, and in reality any other sort of model for that matter.
Interesting that the government funds the roads system in this country yet when it comes to aviation, it's all to hard. Kinda funny really that they will go and build thousands of kilometres of tar ripping up the country side no problem, but to build a 3000m runway and a few buildings is nigh impossible.
Bizarre thinking in so-called rich country really.
Just have a look at the regional airline model in the USA it has completely imploded. People don't fly for free forever and so once the wages start going up the whole model doesn't work. There could be a mass shut down of the regional airlines in the US very shortly.
You need to operate to smaller airports where it is cheaper and there is less congestion. This is exactly what Easyjet/Ryanair/Southwest do and they have low cost models and pay reasonable to unbelievable salaries in the case of Southwest.
Until we get secondary airports in Sydney/Melbourne/Brisbane/Perth the LCC model is a non starter, and in reality any other sort of model for that matter.
Interesting that the government funds the roads system in this country yet when it comes to aviation, it's all to hard. Kinda funny really that they will go and build thousands of kilometres of tar ripping up the country side no problem, but to build a 3000m runway and a few buildings is nigh impossible.
Bizarre thinking in so-called rich country really.
Last edited by neville_nobody; 3rd Mar 2014 at 01:15.
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what's the difference with AN demise (& Virgin growth) & QF shrinking fast.
AN happened overnight, QF taking a bit longer, that's all.
A lower cost full service airline can work here, as passengers leave QF for VA.
Not advocating another Tiger, just an airline, with significantly lower costs than QF.
AN happened overnight, QF taking a bit longer, that's all.
A lower cost full service airline can work here, as passengers leave QF for VA.
Not advocating another Tiger, just an airline, with significantly lower costs than QF.
I can't believe you people advocating that another "low cost" operator start up.
Where does the low cost come from?
No airline can change the laws of physics so fuel costs are similar regardless of who the operator is or whether they profess to be a low cost operator or not.
Leasing charges are dearer for new start operators because of the risk element
Air Nav changes are the same regardless of style of operation
So there are some of your big ticket costs.
So where does the lower costs come from? The staff!
Low cost operators operate on a low margin, high volume charging scheme in order to survive. This means they need to get bums on seats. Yield management is really basic, If the seats are empty then charge less, some cash is better than none.
The punters come to expect that it is reasonable to pay more for a half hour trip in a clapped out falcon taxi driven by a bloke making 10 bucks an hour than for the hour and a half flight in a $70 million dollar jet crewed and supported by multiple skilled people.
This drives the expectation of lower fares and feeds the cycle where no one can actually make a dollar out of aviation.
We are our own worst enemies..
Where does the low cost come from?
No airline can change the laws of physics so fuel costs are similar regardless of who the operator is or whether they profess to be a low cost operator or not.
Leasing charges are dearer for new start operators because of the risk element
Air Nav changes are the same regardless of style of operation
So there are some of your big ticket costs.
So where does the lower costs come from? The staff!
Low cost operators operate on a low margin, high volume charging scheme in order to survive. This means they need to get bums on seats. Yield management is really basic, If the seats are empty then charge less, some cash is better than none.
The punters come to expect that it is reasonable to pay more for a half hour trip in a clapped out falcon taxi driven by a bloke making 10 bucks an hour than for the hour and a half flight in a $70 million dollar jet crewed and supported by multiple skilled people.
This drives the expectation of lower fares and feeds the cycle where no one can actually make a dollar out of aviation.
We are our own worst enemies..
There is no way EK would buy QF in its present form. They may however acquire the Australian Airlines name from QF , take over the leases of the b737s and build an airline on their terms.
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Jack Ranga,
Suggest you look at some financing texts.
Capex is an Investing item which impacts Cash Flow, it does not hit the P&L.
In later years Depreciation from Capex, and say Maintenance Expenses will hit the P&L and in the case of Aircraft in 20 years or so they will be worth next to nothing and you have to spend Capex all over again.
So in summary Virgin's loss had nothing to do with Capex.
That said it did have positive Operating Cash Flow, though overall Cash Flow was negative thanks to Investments (ie Tiger and Virgin Regional)
Suggest you look at some financing texts.
Capex is an Investing item which impacts Cash Flow, it does not hit the P&L.
In later years Depreciation from Capex, and say Maintenance Expenses will hit the P&L and in the case of Aircraft in 20 years or so they will be worth next to nothing and you have to spend Capex all over again.
So in summary Virgin's loss had nothing to do with Capex.
That said it did have positive Operating Cash Flow, though overall Cash Flow was negative thanks to Investments (ie Tiger and Virgin Regional)
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Moa999, I'm not interested in looking at financial texts 
that's why I asked the question!
Let me phrase it better: The money virgin has spent on building new & renovating lounges. Outfitting their aircraft with business class & wifi, all of those capital improvements to the business. Did that have an impact on their profit? Or is the answer the same??
that's why I asked the question!Let me phrase it better: The money virgin has spent on building new & renovating lounges. Outfitting their aircraft with business class & wifi, all of those capital improvements to the business. Did that have an impact on their profit? Or is the answer the same??
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Never going to happen until we build more airports
Ground services? QF already outsourcing to lowest bidder
) is littered with people who thought they could start up an Australian airline, and more than a few would-be GHS magnates.
Interesting that the government funds the roads system in this country yet when it comes to aviation, it's all to hard. Kinda funny really that they will go and build thousands of kilometres of tar ripping up the country side no problem, but to build a 3000m runway and a few buildings is nigh impossible.
Anyway, if you want to start an airline go ahead; just expect a bit of sniggering and strictly cash terms from your service providers. Many people in aviation have now been bitten by enough start up carriers to be really, really dubious.
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Don't think a low cost was suggested, but lower cost, full service than QF & VA which wouldn't be hard with lower wages.
SYD has said recently plenty of capacity (as they push against another airport)
QF continues to shrink.
BNE has more capacity (they are trying to push anything under 50 seats out of BNE)
MEL ?
There's also another airport in Melbourne capable of taking passenger jets. MEB.
From memory VA started with only 2 x 733's & on one route BNE/SYD.
SYD has said recently plenty of capacity (as they push against another airport)
QF continues to shrink.
BNE has more capacity (they are trying to push anything under 50 seats out of BNE)
MEL ?
There's also another airport in Melbourne capable of taking passenger jets. MEB.
From memory VA started with only 2 x 733's & on one route BNE/SYD.
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best way to go
you don't set up a new airline from scratch you find an existing airline that's not making any money & take them over & upgrade their AOC to larger aircraft.
Rex is still making money, so why can't others.
Think outside the box.
The customer experience at big airports is getting worse & worse. MEB would work.
Less hassle & closer to Melbourne CBD.
Question is how to make it work at BNE & SYD. Use jet bases instead of the existing terminals, which have turned into a retail frenzy. (who wants to go shopping at an airport?)
When lived in LA, would only use bloody awful LAX as a last resort. Would fly out of Burbank whenever I could.
Yes LAX has more flights, but could often find one around time wanted to travel going where I wanted to go.
How many commercial jet sized airports in LA basin ?
LAX
Burbank
Ontario
Long Beach
John Wayne
San Diego
applying the "southwest effect" 2 hour rule.
you don't set up a new airline from scratch you find an existing airline that's not making any money & take them over & upgrade their AOC to larger aircraft.
Rex is still making money, so why can't others.
Think outside the box.
The customer experience at big airports is getting worse & worse. MEB would work.
Less hassle & closer to Melbourne CBD.
Question is how to make it work at BNE & SYD. Use jet bases instead of the existing terminals, which have turned into a retail frenzy. (who wants to go shopping at an airport?)
When lived in LA, would only use bloody awful LAX as a last resort. Would fly out of Burbank whenever I could.
Yes LAX has more flights, but could often find one around time wanted to travel going where I wanted to go.
How many commercial jet sized airports in LA basin ?
LAX
Burbank
Ontario
Long Beach
John Wayne
San Diego
applying the "southwest effect" 2 hour rule.
Last edited by XPT; 13th Mar 2014 at 00:57.
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Retail concessions seem to work, XPT. SAC gets about 55% of total revenue from ground side activities, the rest from aircraft handling charges. Westfield group played a huge role in the development and design of the terminal space at Sydney. Notice how you go from security/customs and straight into the 'mall'? Yes, people who are expert in consumer psychology designed the layout to extract the maximum $$$$s from the punters before they set foot on an aeroplane.
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Use jet bases instead of the existing terminals
You also have issues with transporting your passengers to and from the jetbase, as airport public transport and parking facilities are concentrated at the terminals. You can run a bus service, but that adds to the cost. You can have your own carpark but that's more land to rent and another thing to administer and staff. It might be possible, but IMO not at all cost effective.
How many commercial jet sized airports in LA basin ?
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XPT, you need to read some financial texts 
Also, where is the 'Burbank' or 'John Wayne' airports in NSW or VIC or QLD that these cash cow new airlines operate out of?
Also, where is the 'Burbank' or 'John Wayne' airports in NSW or VIC or QLD that these cash cow new airlines operate out of?
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YMEN could take a 737 or 320 could it? lol, it would need serious infrastructure upgrades & who would pay for that? Jetstar can't make AV work so there's something wrong with this so called low cost model? What would that be??