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idea out of left field-new domestic airline

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idea out of left field-new domestic airline

Old 10th May 2020, 02:30
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idea out of left field-new domestic airline

was reading about Neeleman & his new Breeze airline in USA, which was going to use super cheap E195 jets from his Brazilian airline, as a start until his 60 x A220s arrived.

With Breeze start date now postponed, could Neeleman see one huge opportunity in Australia, if VA mark 2 doesn't get off the ground ?

He has the knowhow, he has the jets, he has the pilots/crew & other critical staff.

Are the Azul E195 jets similar to what VA used to fly around OZ ?

Or maybe he just picks up some very cheap B738s/A320s. Plenty of Australian crew available if no VA mark 2.

Everything Neeleman seems to touch in aviation, seems to turn to gold. 1stly Morris air bought out by Southwest, then he was involved somehow with start up of Westjet, then Jetblue, then Azul, then TAP Portugal.

Last edited by BNEA320; 10th May 2020 at 03:11.
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Old 10th May 2020, 02:44
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Why don't you put this in one of your other threads?
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Old 10th May 2020, 02:49
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On here we go again...... nice one BNEA320
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Old 10th May 2020, 02:59
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Lol. Those thoughts you have in your head BNEA320, well not all of them need to be posted on PPRuNe.
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Old 10th May 2020, 03:13
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Originally Posted by Capt Fathom View Post
Why don't you put this in one of your other threads?
Ok will do. Am starting quite a few threads this week. Nothing else to do. Have painted the house, decluttered. Cleaned out the home office. Got finances, what's left in order. Sold shares. Sold stuff I don't need. Got rid of one car. What else ?
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Old 10th May 2020, 03:28
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I actually don’t think it sounds overly left field.

Who was the bloke who started VB in the first place?

A brand that at one point was gold.

Neeleman clearly knows the game, has the contacts.

At this stage wouldn’t we want someone with a great industry knowledge to get up and going?
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Old 10th May 2020, 03:40
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It would be Indigo starting ops here before anyone else.

Could be a new name, or bring in its Frontier or Spirit brand.
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Old 10th May 2020, 04:03
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A real hard-core low cost airline won't work here as there are no secondary airports. The airports in Australia will just eat your competitive edge and hand it to QF. Whoever the second player is in the future will have to be some sort of full service carrier with all the trimmings.
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Old 10th May 2020, 04:12
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Originally Posted by BNEA320/TT738 View Post
was reading about Neeleman & his new Breeze airline in USA, which was going to use super cheap E195 jets from his Brazilian airline, as a start until his 60 x A220s arrived.

With Breeze start date now postponed, could Neeleman see one huge opportunity in Australia, if VA mark 2 doesn't get off the ground ?
He better get a move on considering it's been reported that Indigo Partners are mulling a move to apply for their own AOC, whether if it's with or without the VA purchase.
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Old 10th May 2020, 04:15
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QUOTE:
"He has the knowhow, he has the jets, he has the pilots/crew & other critical staff.."

Knowhow? Could very well have, but in Australia's unique environment?

A toxic, inept regulator to navigate. Monopoly airports gouging anyone and everyone they come in contact with. Maintenance costs almost double that in the US environment, militant unions and disinterested government. Excise inflated fuel costs.

QUOTE:
"With Breeze start date now postponed, could Neeleman see one huge opportunity in Australia, if VA mark 2 doesn't get off the ground ?"

If he is as smart as you say he is, he's likely to consider Australia not worth touching with a forty foot barge pole.


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Old 10th May 2020, 04:19
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Originally Posted by wheels_down View Post
It would be Indigo starting ops here before anyone else.

Could be a new name, or bring in its Frontier or Spirit brand.
IIRC, Indigo owns Frontier and Volaris on the American continent, and part owns Wizz Air in Europe.

They have no involvement with Spirit Air.
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Old 10th May 2020, 04:26
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He has the knowhow, he has the jets, he has the pilots/crew & other critical staff.
Where are these pilots etc coming from?
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Old 10th May 2020, 06:17
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Originally Posted by neville_nobody View Post
A real hard-core low cost airline won't work here as there are no secondary airports. The airports in Australia will just eat your competitive edge and hand it to QF. Whoever the second player is in the future will have to be some sort of full service carrier with all the trimmings.
Who said low cost ? Breeze is apparently going to be 2 or 4 class depending on how you look at it.

Neeleman seems to love tech as long as it works properly & save airline money.

>>>>

"Breeze business model

Breeze professes that it wants to offer a low cost product - but says it also plans to offer a first class product; so it will not be operating a true low cost carrier (LCC) model.

The proposals do include some LCC features (such as a point-to-point route network, extra fees for additional services, and (originally) a single class of aircraft), but it will not have a single class of cabin (those paying higher fares are promised a 2-2 seat configuration and more legroom) and indeed Breeze says it will charge for "what’s effectively four classes of service, starting with an ultra-low-fare product, from which you can buy your way up the ladder... ". Aircraft will not feature seatback in flight entertainment; instead entertainment will be streamed through the airline's app, which will also be used to purchase flights and upgrades.=10.8333px"
>>>>

Jetblue hardly low cost in traditional sense. TAP Portugal not low cost as we think of it.

He has plenty of experience in all areas.

So all he has to do, is have a decent frequency on the golden triangle (more than JQ, which will never ever have high frequency on the triangle) & be cheaper than QF. Many are looking at cheaper everything at present as recession bites. Not hard to be better than QF & if you've got a cost advantage, you can throw things around like all sorts of freebees. TAP is also a member of star alliance.

Nothing to say new airline couldn't have small lounges at BNE, SYD, MEL.

Last edited by BNEA320; 10th May 2020 at 06:32.
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Old 10th May 2020, 06:31
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Originally Posted by 320
Sold shares.
Right. I'm buyng then.
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Old 10th May 2020, 07:16
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Nothing left-field in that, a well worn path ... buy "cheap" aircraft, fly for a bit, and go broke ... it's a tradition in Australia.
  • Compass I
  • Compass II
  • Jetgo
  • Ozjet
... need I go on, I'm sure others can add to the list?
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Old 10th May 2020, 07:27
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Originally Posted by drpixie View Post
Nothing left-field in that, a well worn path ... buy "cheap" aircraft, fly for a bit, and go broke ... it's a tradition in Australia.
  • Compass I
  • Compass II
  • Jetgo
  • Ozjet
... need I go on, I'm sure others can add to the list?
yes but & it's a BIG but, anyone can get reasonably new A320s/B738s super cheap now, especially when VA structure still around.

VB leased 2 x AN B734 if I remember.
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Old 10th May 2020, 07:40
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Surely can't come back as VA 2, that would entail $10m a year to the bearded one, ....would it not?
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Old 10th May 2020, 07:45
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You were banging on about Alliance taking over everything the other day, how would they compete with this new mob?
Especially Alliance's new Tijuana / Bankstown route.
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Old 10th May 2020, 08:16
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Originally Posted by BNEA320 View Post
VB leased 2 x AN B734 if I remember.
No, Ansett didn't operate -400s. VB ended up with former AN B733 CZQ. Three others AN -300s, CZR, CZS and CZU, ended up being leased by QF.

Last edited by MickG0105; 10th May 2020 at 10:30. Reason: Spelling
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Old 10th May 2020, 08:52
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Originally Posted by Fliegenmong View Post
Surely can't come back as VA 2, that would entail $10m a year to the bearded one, ....would it not?
The brand licencing fee (rumoured to have been closer to $15 million a year under the new and improved deal JB did) is going to be the least of your worries if you want come back as Virgin Mk Anything.

The issue that will be weighing much more heavily on any prospective buyers contemplating trying to soldier on under the Virgin banner is the value of the Travel Bank liability; all those punters out there holding on to travel credit vouchers for cancelled flights. That value hasn't been included in any of the public disclosures yet for the simple reason that it's a contingent liability. While the airline continues to be an airline there's the possibility that that liability can be discharged in the course of its normal business.

So, if you're contemplating buying the carcass and building your business out of the VA customer base then you are pretty well committed to having to honour the travel credits at face value or very bloody close to it. The value of the Travel Bank hasn't been disclosed yet but it is likely to be a very big number, perhaps $1 billion. The value of Unearned Revenue (cash held for flights yet to be flown) as at 31 December 2019 was $1.2 billion and Unearned Revenue is probably a very good surrogate for the Travel Bank.

Whatever the value is, probably 80 percent of that is going to be foregone revenue in your first year of operation. It will hit your bottom line such that year one will be a very significant loss, but more importantly it will hit cash flow. The business will have to be cashed up to the eyeballs to get through its first year. I would think that it will be pretty well diabolical for any buyer who is thinking of continuing to wave the Virgin banner in any shape or form.
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