Richard Branson Calls For New Airline Competition Laws.
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Richard Branson Calls For New Airline Competition Laws.
Branson calls for new airline competition laws*
The chairman of Virgin Blue, Richard Branson, has called for the
restructuring of the airline industry.
Mr Branson has accused the Federal Government of protecting Qantas.
Mr Branson has cited the collapse of Impulse and Compass Airlines as
evidence the Federal Government needs to change airline competition
laws.
He wants the introduction of regulations, such as those that exist in
America and Europe, to prevent anti-competitive behaviour particularly
from Qantas.
Mr Branson has accused the Federal Government of reluctance to encourage
discount operators.
"They shouldn't spend all their time worrying about protecting Qantas,"
he said.
The chairman of Virgin Blue, Richard Branson, has called for the
restructuring of the airline industry.
Mr Branson has accused the Federal Government of protecting Qantas.
Mr Branson has cited the collapse of Impulse and Compass Airlines as
evidence the Federal Government needs to change airline competition
laws.
He wants the introduction of regulations, such as those that exist in
America and Europe, to prevent anti-competitive behaviour particularly
from Qantas.
Mr Branson has accused the Federal Government of reluctance to encourage
discount operators.
"They shouldn't spend all their time worrying about protecting Qantas,"
he said.
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It doesn't matter if VB isn't aussie owned. They have given us unheard of fares and the other 2 deserve a bit of competition to add a bit more realism to their view of the airline industry.
Although thay still seem to have that ESP thing going on between them.
(The timing of toddler fares issue)
Although thay still seem to have that ESP thing going on between them.
(The timing of toddler fares issue)
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Let's hope Sir RB doesn't start the whinge campaign along side that moaning and bleating General Manager he has.
The VB GM gets on television and whinges incessantly and sounds like the nerd at school that got his lunch money stolen by the big bully-boys!
Mr Branson wants unfair trade practices removed?
Sir Dick - it's called competition and if you can't handle what QF throws at you then bad luck!
That's competition and Europe is no different!
On the flip side VB must be losing a minimum of $500,000 per week according to a few transport analysts with a combination of new routes and increased lease costs in the 737 NG's.
Dont get me wrong - I much prefer VB over Impulse any day of the week both in terms of professionalism and work practices - but I still reackon VB will come under the control of Ansett and be their low cost carrier much the same as Impulse has to Qantas.
This appears to be Singapore's plan - concentrate/expand the major domestic trunk routes of Ansett and expand them internationally as well and palm off the low yield routes (CG,HB,LT,MC,RK,MK,TL etc) to Virgin Blue.
The VB GM gets on television and whinges incessantly and sounds like the nerd at school that got his lunch money stolen by the big bully-boys!
Mr Branson wants unfair trade practices removed?
Sir Dick - it's called competition and if you can't handle what QF throws at you then bad luck!
That's competition and Europe is no different!
On the flip side VB must be losing a minimum of $500,000 per week according to a few transport analysts with a combination of new routes and increased lease costs in the 737 NG's.
Dont get me wrong - I much prefer VB over Impulse any day of the week both in terms of professionalism and work practices - but I still reackon VB will come under the control of Ansett and be their low cost carrier much the same as Impulse has to Qantas.
This appears to be Singapore's plan - concentrate/expand the major domestic trunk routes of Ansett and expand them internationally as well and palm off the low yield routes (CG,HB,LT,MC,RK,MK,TL etc) to Virgin Blue.
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EPIRB your ignorance is frightening.Yeah Richard Branson's a Pom but what about the 1000 employees of Virgin Blue.What about Ansett being owned by the Kiwis,what about Qantas having ties with BA,what about Vegemite being fully foeign owned,need I go on? You and the likes of Dambuster sound like a pair of parrots.These lines have been used so many times its getting very old. As for it being competition, why is it that fares only change when a new operator starts on a particular route? Most of us can see that the Duopoly arent concerned about the customers, they are only worried about there market share, hence dumping extra seats at discounted prices in an attempt to weed out the competition. You guys probably still fly Q or A thinking that they're great for reducing the fairs to help all of you out.
Why do we have to have the same boring "predictions" and comments,cant anyone think of more constructive arguements?
PLEASE
Why do we have to have the same boring "predictions" and comments,cant anyone think of more constructive arguements?
PLEASE
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eisle s my point is why should a foreign airline all of a sudden get a $2 million subsidy. Sure, Ansett is 100% foreign owned but Qantas is only 25% foreign owned. Both of these companies used to be Australian but neither were offered a subsidy even when they were 100% Australian. But really why should ANY airline be given a subsidy to compete against other airlines? If they want to compete, let them do it with their own money, not Australian taxpayers money.
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Epirb, Your lack of understanding of Internationalised business practice is frightening. Start up subsidies are common in all countries, even the very challenged economies give Tax Holidays or Statutory Charge concessions.
RB is right about the lax anti trust laws in Australia, in the U.S. had QF pulled some of the stunts it has in Australia the Directors would be eating state proviided food for a long while.
RB is right about the lax anti trust laws in Australia, in the U.S. had QF pulled some of the stunts it has in Australia the Directors would be eating state proviided food for a long while.
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But it is not only VB that have recieved this kind of subsidy.As someone pointed out,Impulse were compensated to operate to Tassie. Sure its NT govt's money,but the benefits in tourism will far exceed the $2 Mill outlayed to get them to operate into Darwin.It isnt just aviation where these kind of practices happen. 
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I laugh every time I read that we're loosing X amount of $'s per week because of the lease cost's of the new NG's. Just for your info, the NG's lease's are exactly the same in $ terms as the 6 Classics. Why else would a start-up introduce a new type into service within the first year of operation - because the deal was just too good to refuse. But what would I know ?
[ 04 September 2001: Message edited by: AlbertRoss ]
[ 04 September 2001: Message edited by: AlbertRoss ]
Subsidies to VB will have a detrimental effect on all the regional airlines as holiday makers are not going to pay the normal fare to holiday in Longreach when they can get a subsidised cheap fare to holiday in Darwin, ie the regional communities are going to lose tourism dollars to the Northern Territory.
Peter Beattie showed his naievity when he complained bitterly about the demise of Flight West airlines when in fact the tax payer funded subsidies that he gave VB had a significant effect on Flight West's yeild. The $33 fares charged by VB & Impulse meant that people could holiday interstate for less than they could intrastate.
Peter Beattie showed his naievity when he complained bitterly about the demise of Flight West airlines when in fact the tax payer funded subsidies that he gave VB had a significant effect on Flight West's yeild. The $33 fares charged by VB & Impulse meant that people could holiday interstate for less than they could intrastate.
Bottums Up
The NT Govt.'s subsidy is in the form of a guaranteed sale of 50 seats per BN-DN or DN-BN sector. Should the Gov't sell these to fare paying pax, the subsidy costs nothing.
The Gov'ts purpose for offering a subsidy is to encourage Virgin, and thus competition into the Territory, thus to offer a subsidy to QF or AN is a waste of time. They're already there and the govt's idea is not to subsidise pax travel per se, rather encourage competition and thus lower fares.
[ 04 September 2001: Message edited by: Capt Claret ]
The Gov'ts purpose for offering a subsidy is to encourage Virgin, and thus competition into the Territory, thus to offer a subsidy to QF or AN is a waste of time. They're already there and the govt's idea is not to subsidise pax travel per se, rather encourage competition and thus lower fares.
[ 04 September 2001: Message edited by: Capt Claret ]
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Branson Turns Down Ansett Offer for Virgin Blue
MELBOURNE, Sept 4 Asia Pulse - Virgin tycoon Richard Branson said that he rejected a multi-million dollar offer from Ansett Airlines for his Australian discount carrier Virgin Blue.
Sir Richard said he had rejected the offer by the Air New Zealand subsidiary following strong support from a number of key politicians and the travelling public.
"Australians have benefitted dramatically since Virgin Blue cut airfares in half over 12 months ago," he said.
"Although we could have walked away with a $A250 million ($US131.12 million) net profit on our investment, I felt it would be selling out both the Australian public and our staff."
Rather than sell the cut price carrier, Sir Richard said Virgin Blue would be investing "many millions" in expanding its fleet and establishing new routes.
He said that if Ansett believed that some regional routes in Australia were not viable, Virgin Blue would be happy to assist by offering seats on its own flights.
Sir Richard also said he had spoken at length today with Australian Competition and Consumer Commission head Allan Fels about Virgin Blue's complaints about Qantas' "predatory" practices.
He had also spoken to senior politicians from all major parties.
"I am confident that they appreciate the benefits of lower fares and more competition and will do something after the election to give the authorities more powers to act against the blatant anti-competitive behaviour that was used to drive out Compass, Impulse and hundreds of other small companies in other industries."
ASIA PULSE
MELBOURNE, Sept 4 Asia Pulse - Virgin tycoon Richard Branson said that he rejected a multi-million dollar offer from Ansett Airlines for his Australian discount carrier Virgin Blue.
Sir Richard said he had rejected the offer by the Air New Zealand subsidiary following strong support from a number of key politicians and the travelling public.
"Australians have benefitted dramatically since Virgin Blue cut airfares in half over 12 months ago," he said.
"Although we could have walked away with a $A250 million ($US131.12 million) net profit on our investment, I felt it would be selling out both the Australian public and our staff."
Rather than sell the cut price carrier, Sir Richard said Virgin Blue would be investing "many millions" in expanding its fleet and establishing new routes.
He said that if Ansett believed that some regional routes in Australia were not viable, Virgin Blue would be happy to assist by offering seats on its own flights.
Sir Richard also said he had spoken at length today with Australian Competition and Consumer Commission head Allan Fels about Virgin Blue's complaints about Qantas' "predatory" practices.
He had also spoken to senior politicians from all major parties.
"I am confident that they appreciate the benefits of lower fares and more competition and will do something after the election to give the authorities more powers to act against the blatant anti-competitive behaviour that was used to drive out Compass, Impulse and hundreds of other small companies in other industries."
ASIA PULSE
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Is this a wind up or what?
RB - "we could have walked away with $250m in our pocket but didnt".
This has got to be the biggest load of crap I've ever read!
How can an incumbent airline with little in the way of assets and all of their fixtures/terminal spaces with leased aircraft command that sought of dosh??
If it is true I've lost the respect of RB as a businessman!
This just goes to confirm that Sir Richard is not in control but the strings are being pulled from afar (probably in the vicinity of Singapore).
EISLE - I happen to agree with EPIRB and Dambuster - the GM of VB is a whingeing nuisance and they ought to present a buxom blonde in his place - at least she'd appear credible!
As for VB losing money the analysts from 2 separate organisations that specialise in aviation agreed.
New routes with ridiculous offers = losses.
No amount of creative accounting will help there.
RB - "we could have walked away with $250m in our pocket but didnt".
This has got to be the biggest load of crap I've ever read!
How can an incumbent airline with little in the way of assets and all of their fixtures/terminal spaces with leased aircraft command that sought of dosh??
If it is true I've lost the respect of RB as a businessman!
This just goes to confirm that Sir Richard is not in control but the strings are being pulled from afar (probably in the vicinity of Singapore).
EISLE - I happen to agree with EPIRB and Dambuster - the GM of VB is a whingeing nuisance and they ought to present a buxom blonde in his place - at least she'd appear credible!
As for VB losing money the analysts from 2 separate organisations that specialise in aviation agreed.
New routes with ridiculous offers = losses.
No amount of creative accounting will help there.
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Not happy with 250 Million huh.
Doesn't want to betray the ozzie public huh.
What absolute horse hockey.
Dick just wants the best price for VB and is willing to hurt AN just a bit more until the good doctor signs the check on behalf of NZ.
Notice how VB are about to service ports currently losing money in the AN network.
Doesn't want to betray the ozzie public huh.
What absolute horse hockey.
Dick just wants the best price for VB and is willing to hurt AN just a bit more until the good doctor signs the check on behalf of NZ.
Notice how VB are about to service ports currently losing money in the AN network.
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4th September - A Special Announcement From Virgin Blue
Richard Branson today rejected a $250 million offer for Virgin Blue by
Air New Zealand, following strong support from a number of key
politicians, the travelling public, and the entire Virgin Blue Staff.
In Melbourne today, he issued the following statement:
"Australians have benefited dramatically since Virgin Blue cut airfares
in half over 12 months ago. Four million more people flew this year than
last. People who literally couldn't afford to travel by air before are
now flying often. Although we could have walked away with a $250 million
net profit on our investment, I felt it would be selling out both the
Australian public and our delightful staff at Virgin Blue. Instead we
will invest many millions more in expanding our fleet and flying new
routes. If Ansett feels that some regional routes are not viable due to
their higher costs, we would be happy to assist by offering seats to
them on flights we would operate. This will make sure the regions don't
suffer. For many years the Virgin Group has had an excellent
relationship with both Ansett and Air New Zealand. Air New Zealand
assists us in heavy maintenance of Virgin Atlantic's 747's while Ansett
International and Virgin Atlantic jointly provide the highest quality
service on the Kangaroo route.
Because Virgin has the youngest fleet of planes in Australia, our costs
are a fraction of the competition. Fuel costs are lower while
maintenance and reliability are the best. This enables us to keep our
fares low."
Today I have also spoken at length with Professor Alan Fells of the ACCC
who confirmed to me that he considered issues relating to airline
competition to be one of his highest priorities and that he has the
resources and determination to pursue these matters aggressively. I
understand that he has a special team investigating our complaints
regarding Qantas's predatory practices. Additionally, over the last few
days I've talked to senior politicians of all major parties. I am
confident that they appreciate the benefits of lower fares and more
competition and will do something after the election to give the
authorities more powers to act against the blatant anti-competitive
behaviour that was used to drive out Compass, Impulse and hundreds of
other small companies in other industries.
Premier Peter Beattie has written letters today to both the Prime
Minister and the Leader of the Opposition urging them to take prompt
action on this matter. We've also had tremendous support from many
political leaders including Premier Bob Carr, Premier Bacon, Chief
Minister Clare Martin, and Senator Natasha Stott Despoja of the Democrats"
This week Virgin announced new routes to Launceston, Tasmania and Darwin.
Virgin Blue will carry over 4 million people over the next year and will
create another 1000 jobs in its own right. This figure does not include
the 1000's of more jobs that are being created by the boosts to tourism
and the savings on company bottom lines.
Virgin Blue operates the most modern, technologically advanced aircraft
in Australia today, with an average age of less than 5 years, compared
with Ansett's average fleet age of 11.7 years and Qantas with an average
fleet age of 10.8 (Salomon Smith Barney 2001 Fleet handbook)
Richard Branson today rejected a $250 million offer for Virgin Blue by
Air New Zealand, following strong support from a number of key
politicians, the travelling public, and the entire Virgin Blue Staff.
In Melbourne today, he issued the following statement:
"Australians have benefited dramatically since Virgin Blue cut airfares
in half over 12 months ago. Four million more people flew this year than
last. People who literally couldn't afford to travel by air before are
now flying often. Although we could have walked away with a $250 million
net profit on our investment, I felt it would be selling out both the
Australian public and our delightful staff at Virgin Blue. Instead we
will invest many millions more in expanding our fleet and flying new
routes. If Ansett feels that some regional routes are not viable due to
their higher costs, we would be happy to assist by offering seats to
them on flights we would operate. This will make sure the regions don't
suffer. For many years the Virgin Group has had an excellent
relationship with both Ansett and Air New Zealand. Air New Zealand
assists us in heavy maintenance of Virgin Atlantic's 747's while Ansett
International and Virgin Atlantic jointly provide the highest quality
service on the Kangaroo route.
Because Virgin has the youngest fleet of planes in Australia, our costs
are a fraction of the competition. Fuel costs are lower while
maintenance and reliability are the best. This enables us to keep our
fares low."
Today I have also spoken at length with Professor Alan Fells of the ACCC
who confirmed to me that he considered issues relating to airline
competition to be one of his highest priorities and that he has the
resources and determination to pursue these matters aggressively. I
understand that he has a special team investigating our complaints
regarding Qantas's predatory practices. Additionally, over the last few
days I've talked to senior politicians of all major parties. I am
confident that they appreciate the benefits of lower fares and more
competition and will do something after the election to give the
authorities more powers to act against the blatant anti-competitive
behaviour that was used to drive out Compass, Impulse and hundreds of
other small companies in other industries.
Premier Peter Beattie has written letters today to both the Prime
Minister and the Leader of the Opposition urging them to take prompt
action on this matter. We've also had tremendous support from many
political leaders including Premier Bob Carr, Premier Bacon, Chief
Minister Clare Martin, and Senator Natasha Stott Despoja of the Democrats"
This week Virgin announced new routes to Launceston, Tasmania and Darwin.
Virgin Blue will carry over 4 million people over the next year and will
create another 1000 jobs in its own right. This figure does not include
the 1000's of more jobs that are being created by the boosts to tourism
and the savings on company bottom lines.
Virgin Blue operates the most modern, technologically advanced aircraft
in Australia today, with an average age of less than 5 years, compared
with Ansett's average fleet age of 11.7 years and Qantas with an average
fleet age of 10.8 (Salomon Smith Barney 2001 Fleet handbook)
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You folks with the so called transport analyst contacts need to consider drinking in a different bar me thinks. Even if they are making educated guesses about the cash flows of VB I doubt they have a grasp of the cost structure of the airline. Those so called losses are very much probable with a cost structure similar to QF or AN. You can be assured VB's is far more efficient.
I am not in the least suprised that the company wasn't sold for $250 million either. RB and VB have only just begun and if there was an intent to sell any portion of the airline why would he do it now? It's going to be worth a whole lot more in twelve to twenty four months. RB would most likely not sell more than 49% of VB in any case unless it was a sinking ship which it ain't.
As for whether VB is owned by Aussies or otherwise who really cares? The point has been made that the company employs 1000 people that pay their taxes to the Australian government. No money going overseas at this point. It's Aussies that are are benefiting from VB's presence in the industry, approx. 4 million more people travelled by air last year than the year before. Many of them as a result of lower airfares brought on by VB and Impulse. I had a guy on board a few weeks ago who was most likely a retiree with time on his hands. My guess is that he was in his late sixties. He lives in Perth and had reason to travel to Brisbane but the only way he could afford to fly there was to drive to ADL and then take VB ADL-BNE-ADL and then drive back to Perth. He was happy to do this because as he told us he hadn't made the drive from Perth to Adelaide in many years and quite enjoyed the trip. He could not afford the airfare from Perth to Brisbane return with QF or AN. There are many people out there benefitting from VB's presence just as this gentleman has.
Those of you attempting to propagate gloom and doom about VB or any other competetive organisation in the airline industry need to take a deep breath and smell the roses. Competition is good for the consumer which is who ultimately keeps us airline folks employed. If its getting to hot in the kitchen for the likes of QF and AN then they will have to either get out, open the windows and let some cooler air in ( ie restructure their costs to remain/become competetive ) or get someone else to do kitchen patrol for them.
[ 04 September 2001: Message edited by: sprucegoose ]
I am not in the least suprised that the company wasn't sold for $250 million either. RB and VB have only just begun and if there was an intent to sell any portion of the airline why would he do it now? It's going to be worth a whole lot more in twelve to twenty four months. RB would most likely not sell more than 49% of VB in any case unless it was a sinking ship which it ain't.
As for whether VB is owned by Aussies or otherwise who really cares? The point has been made that the company employs 1000 people that pay their taxes to the Australian government. No money going overseas at this point. It's Aussies that are are benefiting from VB's presence in the industry, approx. 4 million more people travelled by air last year than the year before. Many of them as a result of lower airfares brought on by VB and Impulse. I had a guy on board a few weeks ago who was most likely a retiree with time on his hands. My guess is that he was in his late sixties. He lives in Perth and had reason to travel to Brisbane but the only way he could afford to fly there was to drive to ADL and then take VB ADL-BNE-ADL and then drive back to Perth. He was happy to do this because as he told us he hadn't made the drive from Perth to Adelaide in many years and quite enjoyed the trip. He could not afford the airfare from Perth to Brisbane return with QF or AN. There are many people out there benefitting from VB's presence just as this gentleman has.
Those of you attempting to propagate gloom and doom about VB or any other competetive organisation in the airline industry need to take a deep breath and smell the roses. Competition is good for the consumer which is who ultimately keeps us airline folks employed. If its getting to hot in the kitchen for the likes of QF and AN then they will have to either get out, open the windows and let some cooler air in ( ie restructure their costs to remain/become competetive ) or get someone else to do kitchen patrol for them.
[ 04 September 2001: Message edited by: sprucegoose ]
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It is sad that we feel the need to wish the worst on our fellow pilots.
Virgin appearing on the scene has not cost any AN or QF drivers their jobs - it didn't even cost any Impulse drivers their jobs!
It has given MANY people the opportunity to fly jets - people that otherwise would not have had that opportunity.
For people that bag Virgin because it is foreign owned - Ansett is 100% foreign owned, and QANTAS is approx 48% foreign owned - yes BA has 25%, but other non airline foreign investors make up the rest.
Why can't we drivers just be pleased that more of us have good jobs, and leave the mud slinging to the commercial and PR departments?
You'd think that every Virgin (or NJS - the previous target before Virgin appeared) pilot was personally trying to destroy your careers!!
As for the Airline analysts, these would be the same analysts that said Virgin wouldn't start, wouldn't last a year, etc etc etc...If I was listening to airline analysts, a $500 000 per week loss (dambusters numbers) would have to be better than a MILLION DOLLARS A DAY loss AN are supposedly making ( in excess of $300 annual loss - Ansett's preliminary numbers from the press)
At the end of the day NONE of us know what is really occuring.
We should be applauding the fact that Virgin appearing on the scene has stimulated the market such that ALL the players are carrying more bums on seats (admittedly at a lower yield) - more bums on seats eventually means more airframes to stick the bums into and more airframes means more crews - upgrades for F/O's, F/O positions for wannabees - in ALL the carriers....
Virgin appearing on the scene has not cost any AN or QF drivers their jobs - it didn't even cost any Impulse drivers their jobs!
It has given MANY people the opportunity to fly jets - people that otherwise would not have had that opportunity.
For people that bag Virgin because it is foreign owned - Ansett is 100% foreign owned, and QANTAS is approx 48% foreign owned - yes BA has 25%, but other non airline foreign investors make up the rest.
Why can't we drivers just be pleased that more of us have good jobs, and leave the mud slinging to the commercial and PR departments?
You'd think that every Virgin (or NJS - the previous target before Virgin appeared) pilot was personally trying to destroy your careers!!
As for the Airline analysts, these would be the same analysts that said Virgin wouldn't start, wouldn't last a year, etc etc etc...If I was listening to airline analysts, a $500 000 per week loss (dambusters numbers) would have to be better than a MILLION DOLLARS A DAY loss AN are supposedly making ( in excess of $300 annual loss - Ansett's preliminary numbers from the press)
At the end of the day NONE of us know what is really occuring.
We should be applauding the fact that Virgin appearing on the scene has stimulated the market such that ALL the players are carrying more bums on seats (admittedly at a lower yield) - more bums on seats eventually means more airframes to stick the bums into and more airframes means more crews - upgrades for F/O's, F/O positions for wannabees - in ALL the carriers....