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Topic: Virgin Blue Vows To Give Away Free Seats
Username: ANstar
Posted 2004-02-23 22:17:39 and read 3628 times.

http://theaustralian.news.com.au/common/story_page/0,5744,8770806%255E23349,00.html

Comments like 'we won't be beaten on price' and 'we will respond to Jetstars pricing within a minute or later' will only cause trouble IMHO

Topic: RE: Virgin Blue Vows To Give Away Free Seats
Username: TBCITDG
Posted 2004-02-24 01:10:48 and read 3561 times.

MMMM
Sounds like a desperate attempt to wooo headlines away from JetsStar. Wonder if they do really feel threatened??

Topic: RE: Virgin Blue Vows To Give Away Free Seats
Username: Russophile
Posted 2004-02-24 01:30:24 and read 3534 times.

I don't think it is so much DJ feeling threatened, but obviously letting QF know right now, that if need be they will practically give away seats, and will be prepared -- I see it more of a throwing down of the gauntlet by DJ than anything else.

However, I did think Godfrey saying that DJ would probably introduce lounges as a kneejerk reaction -- introduce lounges, then pax are going to want FFP, full service meals, etc, etc, etc and before you know it, your low-cost base is eroded, and you are just another QF.

Topic: RE: Virgin Blue Vows To Give Away Free Seats
Username: PER744
Posted 2004-02-24 04:29:02 and read 3485 times.

DJ already do have lounges at some airports. They're converted Ansett Golden Wing lounges I belive and known as 'The Blue Room'. I believe a membership is about half that of the Qantas Club, however I *think* they charge extra for food and drink, which wouldn't be popular amongst people used to Golden Wing or Qantas Club.

DJ will definitely have to cut prices to compete with JetStar, they are barely competing with Qantas. As an example, PER-SYD is $199 each way with DJ, and $206 each way with QF (under the standard specials for both airlines.)

That means for $412 instead of $398 (ie, $14 difference) you get frequent flyer points, a meal on each flight, a refreshment course on each flight, free non-alcoholic beverages on all flights, and free beer and wine on afternoon flights.

DJ may be good when it comes to their super special fares (of which the number of seats are normally very limited), but for the average lesiure traveller QF often works out to be around the same price, and a lot better value for money.

Topic: RE: Virgin Blue Vows To Give Away Free Seats
Username: Jsmith
Posted 2004-02-24 05:52:29 and read 3442 times.

PER744 - and why do you think QF often works out to be around the same price? You should be fortunate that fares from Perth to the rest of Australia are no longer the skyhigh prices they used to be PRE VIRGIN.

Do you think QF would offer $206 flights each way if Virgin was not around?

I think not.

Topic: RE: Virgin Blue Vows To Give Away Free Seats
Username: TBCITDG
Posted 2004-02-24 06:40:03 and read 3424 times.

Jsmith:
Of course not.
But isn't that just good business. I mean why would I reduce an air fare in my airline if I had no other competitors? It is logical (as bad as it may be to consumers).
At the end of the day, QF may have been forced to reduce its airfares throughout Australia.
I think that PER744 (and I don't mean to put words into his/her mouth) was trying to say is that DJ will really need to pick its game up if it still wants to be considered as a "low-cost" airline. On a lot of routes,QF have been able to match it head on, and with the introduction of Jetstar they will need to decrease prices even further.
As some people have said in these forums (don't take it out on me): DJ is low cost because you don't get anything on board . . . where as with QF you pay a few dollars more, yet get a bit more benefits.

Topic: RE: Virgin Blue Vows To Give Away Free Seats
Username: Gemuser
Posted 2004-02-24 09:50:21 and read 3384 times.

This is a very, very case by case thing. Sometimes DJ is much cheaper than QF and sometimes its the other way around.

Eg last Saturday my son had to fly BNE-SYD. Booking a week ahead cheapest available fares were DJ = $65, QF = $114, both inc taxes. Guess which one he took?

At othertimes its been the other way around. You CANNOT say DJ is cheaper than QF or vice versa. BTW the same is true of all LCC's world wide. Compare BA and FR on a specific route, over time.


Gemuser

Topic: RE: Virgin Blue Vows To Give Away Free Seats
Username: QantasA332
Posted 2004-02-24 09:56:51 and read 3374 times.

Sir Richard is at it again............. Insane

Cheers,
QantasA332

Topic: RE: Virgin Blue Vows To Give Away Free Seats
Username: Richardw
Posted 2004-02-24 14:21:30 and read 3307 times.

Where is Jetstar going to fly? Will they have seat allocation?

Topic: RE: Virgin Blue Vows To Give Away Free Seats
Username: Lufthansa
Posted 2004-02-24 14:52:10 and read 3284 times.

Okay guys, to suggest DJ is barely competing with qf is ludricous.
1 DJ drove fares to that level and thus drove competition

2 DJ are marking a margin on domestic flights of around 35% QF are on the otherhand around 17%. Do the math. under the current structure, if DJ reduce their prices and/or increased capacity to operate at a level around QFs current margin, then, QF assuming it matched fares, would not be profitable on those routes in question. Hence the introduction of jetstar.

Those little perks that QF give away arent the expensive bit. Although i think they could be more efficient with them. back to that in a minute. the point here is, its the higher density aircraft configuration, lower staffing levels and lower pay levels that makes the big difference. I was on a QFlink 717 flight between BNE and TSV monday, and, i must say, given that about half of the seats were sold around the $80 mark, that flight, which used to be a 733 or 734, was completely full, whereas the 737s used to run about half empty. The cost structure of those 717s would have allowed for the cheaper fare AND them to be available in a substantial volume and what do u know, it works.
Now back to the earlier point. That QF box contained just an apple and 2 buscuits. it was a very expensive way to package that. they should just do what jetblue or SAS does in a similar situation and hand it to u in a small paper bag. they could pass the savings on to customers in the form of more or better snacks.

Now what can jetstar do that QFlink cant? charge for those same goodies. and, then, DJ and jetstar can do a ryanair and give away a few otherwise empty seats and make 12 bucks on the sale of goodies inflight to those customers. remember thats 12 dollars profit from a seat that would have probably otherwise remained empty. can they do it? absolutely! PS, i really think those 717s are a great little shuttle jet. despite the lack of inflight entertainment, i think if u had complementry booze on them, and fitted the rear ventral stairs for faster deplaning, you have a damn good shuttle. PS - per 744, most ppl live on the east coast and dont get all that stuff u mentioned.

Topic: RE: Virgin Blue Vows To Give Away Free Seats
Username: PER744
Posted 2004-02-25 02:32:06 and read 3214 times.

Lufthansa - I realise that most people don't live on the West Coast, I was providing an example of the fact that DJ aren't necessarily offering value for money for a large amount of travellers. As you've pointed out, those aren't the expensive bits, but they are definitely noticeable.

At the moment we have an LCC competing with a full service carrier, for similar prices on many routes. Once DJ have another LCC to compete with then they'll notice a substantial drop in margins.

It follows the usual Branson trend of creating hype and selling up before the first major obstacle is encountered, a la Virgin Mobile (Australia)


TBCITDG: for the most part, very well said.

Topic: RE: Virgin Blue Vows To Give Away Free Seats
Username: Jsmith
Posted 2004-02-25 11:13:45 and read 3167 times.

TBCITDG: QF have been able to 'match' prices because they have large enough aircraft to capacity dump on routes that they compete with Virgin. It is textbook predatory pricing. The trick is trying to prove it.

Stick a 767-300 on a route that was previously flown by a 737-400, and of course you can sell a couple of seats at prices below DJ's but the remainder of the flight is comprised of full fare passengers or business passengers.

That way, the incumbent looks as though they are merely trying to legitimately compete with the new entrant, but their ultimate aim is to drive the new entrant out of the market altogether so they can return to a state of monopoly profit. Guess who loses out if this happens? The travelling public.

Thankfully Virgin's operations and cost structure allow it to offset capacity dumping that QF and other incumbents would engage in under the rubic of 'competitive behaviour'.

Competition is good, but it has to be fair.

Take one step back - If DJ weren't around, you wouldn't be getting any value for your flying dollar. People in this country have such short memories when it comes to how much it used to cost to fly anywhere in Australia.



Topic: RE: Virgin Blue Vows To Give Away Free Seats
Username: High_flyr69
Posted 2004-02-25 11:30:34 and read 3142 times.

JQ flying to Avalon on the trunk routes to me does not make any sense. For most people in the north/east the transport/cab ride to Avalon will cost more than the 69 Dollar fare to Sydney. i just think it was initiated as a pure slap in the face to Melbourne Airport managment due to their recent harassment at Qantas as a result of Qantas drawing seats out of Melbourne and into Sydney. But the logic is Avalons operating costs will inevitably be much much lower. Its a 2 side story of which i am yet to decide what to believe. Cant wait to get on a 717 and a 320 in JQ colours though.
cheers
high_flyr69


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