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The Virgin Group  
User currently offlineCoa747 From , joined Dec 1969, posts, RR:
Posted (8 years 11 months 1 week 5 days 10 hours ago) and read 2658 times:

I don’t think Virgin USA will ever get off the ground. Even if it does US regulators are going to keep an eye on Sir Richard. I don’t think the government is too keen on Virgin America after the whole Virgin Nigeria situation. The government knows the first thing Richard will try to do is closely align Virgin Atlantic with Virgin USA to get around the Bermuda II agreement and provide Virgin Atlantic a direct feed of US domestic traffic onto their north Atlantic route network specifically Heathrow. The fact that Virgin Nigeria is owned 49% by Virgin and Virgin Atlantic is leasing its own A340’s to Virgin Nigeria doesn’t smell right. Wonder what the lease rates were on those planes?

17 replies: All unread, jump to last
 
User currently offlineJorge1812 From Germany, joined Apr 2004, 3149 posts, RR: 8
Reply 1, posted (8 years 11 months 1 week 5 days 9 hours ago) and read 2622 times:

Quoting Coa747 (Thread starter):
after the whole Virgin Nigeria situation

What is with Virgin Nigeria? Something wrong? Problems?

Quoting Coa747 (Thread starter):
The fact that Virgin Nigeria is owned 49% by Virgin and Virgin Atlantic is leasing its own A340�s to Virgin Nigeria doesn�t smell right. Wonder what the lease rates were on those planes?

Other Airlines do this also.

Georg.


User currently offlineCoa747 From , joined Dec 1969, posts, RR:
Reply 2, posted (8 years 11 months 1 week 5 days 9 hours ago) and read 2594 times:

The problem becomes that you have a vertical integration of companies that can lead to unfair competition. Example the robber barons of the early 20th century like Vanderbilt, Rockefeller and Carnegie had vertically integrated companies. John D. Rockefeller’s standard oil is a good example of this. He controlled every aspect of oil production from the time it came out of the well to the time it was delivered to the consumer. He owned the oil fields, refineries, distributors and so could control the price of gas and decided what it should sell for. For this reason the US government outlawed this type of vertical corporate integration. This is the same practice that Richard Branson is employing all be it on a much smaller scale. Virgin Nigeria’s startup financing came from the Virgin Group, the fleet didn’t have to be purchased or leased from a company like ILFC. But instead were aquired through a lease arrangement with Virgin Atlantic also owned by the Virgin group. End result Virgin Nigeria secured cheap aircraft from a wholly owned subsidiary. Think about it no money really changed hands it just moved from one subsidiary to another. Virgin Nigeria can now funnel passengers into and out of Heathrow therefore providing an additional revenue stream for Virgin Atlantic through potential code sharing agreements. Virgin USA will serve much the same purpose. To provide a US domestic pipeline for Virgin Atlantic to feed traffic onto their north Atlantic operations and Heathrow through a code share arrangement which would bypass Bermuda II indirectly and hurt airlines like Northwest, Continental and US Airways who don’t have access to Heathrow.

User currently offlineCloudyapple From Hong Kong, joined Jul 2005, 2454 posts, RR: 9
Reply 3, posted (8 years 11 months 1 week 5 days 8 hours ago) and read 2571 times:

Did you know Virgin group only hold 25% of Virgin America while the rest is American owned? The US government can do nothing about it.

I do not believe there is a competition issue as most of the ailing majors operate large feeds to longhauls.

If vertical integration is an issue, GE should be broken up first.



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User currently offlineLeezyjet From United Kingdom, joined Oct 2001, 4042 posts, RR: 53
Reply 4, posted (8 years 11 months 1 week 5 days 8 hours ago) and read 2555 times:

Quoting Coa747 (Reply 2):
But instead were aquired through a lease arrangement with Virgin Atlantic also owned by the Virgin group

What about the 2x A320's that were leased from Balkan ?. That had nothing to do with Virgin Atlantic.

Basically it seems to me that you just don't want Virgin USA to start up at all because it will hurt the likes of DL/CO/NW and the rest. Well tough sh!t if it does, thats business.

Your beloved USofA is the home of greed and capitalism, but all too often (each week infact) when the Virgin USA thread comes up, all we here are a load of Yanks whining about how it's going to hurt them despite the fact that it will be bringing much needed jobs into a crippled industry and how they couldn't possibly have an airline run by anyone who isn't a US citizen. Get over it, and accept reality like in the rest of the world, many many businesses are now owned by foreign companies and the world just keeps ticking along just fine.

 Smile



"She Rolls, 45 knots, 90, 135, nose comes up to 20 degrees, she's airborne - She flies, Concorde Flies"
User currently offlineMarshalN From Hong Kong, joined Sep 2005, 1521 posts, RR: 0
Reply 5, posted (8 years 11 months 1 week 5 days 8 hours ago) and read 2527 times:

Quoting Leezyjet (Reply 4):
Your beloved USofA is the home of greed and capitalism, but all too often (each week infact) when the Virgin USA thread comes up, all we here are a load of Yanks whining about how it's going to hurt them despite the fact that it will be bringing much needed jobs into a crippled industry and how they couldn't possibly have an airline run by anyone who isn't a US citizen. Get over it, and accept reality like in the rest of the world, many many businesses are now owned by foreign companies and the world just keeps ticking along just fine.

That's a bit harsh  Smile

But I agree in principle -- there's nothing wrong with vertical integration in this case, regardless of what they're doing. Virgin is small fish in the airline world, really. Only BA and AA will have problems with regulators. Virgin? How many people can they be feeding compared to the giants like LH+UA, KLM+NW, etc.


User currently offlineAirways45 From United Kingdom, joined May 2000, 300 posts, RR: 0
Reply 6, posted (8 years 11 months 1 week 5 days 7 hours ago) and read 2506 times:

Virgin Nigeria is only 49% owned by Virgin Atlantic. 51% of the shares are owned by Nigerian institutional investors. When it was starting up it raised N3.57bn (US$26.9m) from Nigerian companies and Virgin contibuted N3.43bn.

So, to answer the first point, money did change hands and less than half came from Virgin.

Airways45


User currently offlineAirways45 From United Kingdom, joined May 2000, 300 posts, RR: 0
Reply 7, posted (8 years 11 months 1 week 5 days 7 hours ago) and read 2497 times:

Quoting Coa747 (Thread starter):
The government knows the first thing Richard will try to do is closely align Virgin Atlantic with Virgin USA to get around the Bermuda II agreement and provide Virgin Atlantic a direct feed of US domestic traffic onto their north Atlantic route network specifically Heathrow.

Isn't this what UAL and AA do every minute of the day? What's wrong with anyone else doing it?

Plus, isn't that what global alliances are for? AA and BA sharing, UAL and BMI working together?

Can't see the issue myself.

Airways45


User currently offlineCoa747 From , joined Dec 1969, posts, RR:
Reply 8, posted (8 years 11 months 1 week 5 days 7 hours ago) and read 2497 times:

Virgin USA isn't needed at all! There is too much capacity as it is. The US domestic market has too many players already, just ask Independence Air. The airlines are pricing themselves into bankruptcy. Airfares continue to fall despite record high fuel prices. Sir Richard is welcome to start up here in the US. I have no issue with that. But after watching Virgin Nigeria I have no doubt that he will in time try to link together Virgin USA with Virgin Atlantic and that is the problem I have. I believe that is the same concern that the US government has. I have been hearing rumors of Virgin USA for years and nothing has happened. There isn’t a viable market for them and any market they try to enter they will be confronted by Southwest, Frontier, jetBlue and all the majors. DFW has a lot of empty space wonder why there are no takers? Because American has crushed everyone at DFW including Delta like a bug the same will hold true at any other hub airport. All the prime secondary airports have been picked over there is no fertile ground for Virgin to go after. Good luck to Virgin USA they are going to need it.

You say that I am just another pissed of Yank then why hasn’t Virgin USA gotten off paper in the last three years because the US government doesn’t want any part of Virgin USA! It is a very political issue and won’t be resolved until some form of open skies agreement is passed between the US and UK. That is reality not opinion and Virgin Nigeria isn’t helping Virgin USA’s cause either.


User currently offlineAirways45 From United Kingdom, joined May 2000, 300 posts, RR: 0
Reply 9, posted (8 years 11 months 1 week 5 days 7 hours ago) and read 2480 times:

Ok, time to dispell a few myths I think...


1) Here's the best bit everyone, I'm guessing that Coa747 works for or likes Continental. Here's the root of this post. Continental wanted to fly to Lagos but abandoned the Newark - Lagos plan citing 'hurdles'. The insider view is that because the USA wouldn't recognise Virgin Nigeria, the Nigerian Govt blocked the Continental route authorization. So, COA are angry (and Coa747 is one of many trying to scupper Virgin America plans in retaliation).

2) Virgin Nigeria want's to fly to the USA, but the USA doesn't recognise Virgin Nigeria as the national airline of Nigeria even though the USA and Nigeria have open skies! Indeed, the USA position is against their own stated position of creating 'safe skies for Africa' which seeks the establishment of secure new African airlines. The only way this can be secured is by bringing in expertise from outside, UK, USA or wherever. Go figure...


3) Virgin USA has been delayed, not becaues of the US government inteference as is has been suggested, but rather because of financing problems. In addition, Branson has to give control of the Virgin brand to investors - he can only have 25%. Controlling stake of the Virgin America airline will only be given to people he can trust. It's taken him a while to find such people.

4) The airline requires $150m in funding and the Virgin Group claim they will announce shortly who their investors are.


5) Virgin America is planning on launching in 2006, though Branson has said he will be distressed if it doesn't happen by the end of 2006.

6) The airline is supposed to base itself at SFO. This is not served by a LCC - nearby Oakland has Southwest, but SFO is in need of increased services after a spell of trouble (weather doesn't help).

Airways45


User currently offlineCoa747 From , joined Dec 1969, posts, RR:
Reply 10, posted (8 years 11 months 1 week 5 days 6 hours ago) and read 2448 times:

I don't work for CO or any other airline. I'm not talking about CO's Lagos route. The oposition to Virgin Nigeria is not just as stated but there is a real feeling here that Virgin USA and Virgin Atlantic, Nigeria, or plug in whatever Virgin airline you want that they are just ways to grow the Virgin empire and feed Virgin Atlantic. That is not just my opinion. The feeling in Washington from people I have talked to is that they haven't and are going to continue to make life difficult for any Virgin incarnation here in the US because bottom line is Richard is British and the UK is still screwing us when it comes to Heathrow and they don't care if he only owned 1% he still isn't going to make any friends here with Virgin America. It is going to be ugly for Virgin America, AA, CO and friends will ensure that. San Francsico is perhaps the worst place to pick as a hub. High costs, constant delays due to weather and the runway alignment really hampers operations. That is why Southwest pulled out of SFO. Surely Mr Branson is smarter than that. Oh by the way SFO is one of United's hubs so good luck with that.

User currently offlineMariner From New Zealand, joined Nov 2001, 25248 posts, RR: 85
Reply 11, posted (8 years 11 months 1 week 5 days 5 hours ago) and read 2436 times:
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Quoting Coa747 (Reply 10):
The feeling in Washington from people I have talked to is that they haven't and are going to continue to make life difficult for any Virgin incarnation here in the US because bottom line is Richard is British and the UK is still screwing us when it comes to Heathrow and they don't care if he only owned 1% he still isn't going to make any friends here with Virgin America.

So, in review: if everything SRB does is legal under American law, he'll still be screwed up the butt without any lube just because he is British?

Gee, interesting concept.

cheers

mariner



aeternum nauta
User currently offlineNKMCO From United States of America, joined Oct 2005, 96 posts, RR: 0
Reply 12, posted (8 years 11 months 1 week 5 days 5 hours ago) and read 2457 times:

Quoting Coa747 (Reply 10):
...ways to grow the Virgin empire and feed Virgin Atlantic

...and what's so wrong with that? Creating airlines with Virgin brand to create a global Virgin network... sounds like good franchising to me. The bottom point is Branson will make money and pax will profit form it as well. Airline industry is cut throat and from consumer perspective there is no such thing as "we don't need another airline." The downside is that with more and more airlines and more and more pax flying the airline industry is getting closer to a "Greyhound" type of industry but that's how it works.

Quoting Coa747 (Reply 8):
The US domestic market has too many players already, just ask Independence Air

...taking Flyi for example is not really the best option - they just changed the name and kept all the costs.


User currently offlineAirways45 From United Kingdom, joined May 2000, 300 posts, RR: 0
Reply 13, posted (8 years 11 months 1 week 5 days 5 hours ago) and read 2404 times:

Quoting Coa747 (Reply 10):
bottom line is Richard is British and the UK is still screwing us when it comes to Heathrow

So, presumably you wouldn't mind if a German was behind a US start-up? The problem is that he is British.

And, if LHR was opened up, you would be all for a UK airline operating domestic flights in the US? Are you all for scrapping the 25% restriction then? I guess your Washington buddies that are making life difficult (in your words) for Virgin are ready to make it easier by allowing full US access.... Oh, I've just seen a pig fly across the window. It had 4 engines!!!

Airways45


User currently offlineA330 From Belgium, joined May 1999, 649 posts, RR: 7
Reply 14, posted (8 years 11 months 1 week 4 days 21 hours ago) and read 2337 times:

Coa747,

Whahahahahaha! You are such a comedian. Really mate, have you ever been outside the good old US of A? The Virgin group is nothing compared with the monopolistic cravings of the Coca Cola Company, which is... American!
Airways45 has hit the nail in his last post.

Virgin Nigeria is the first airline in West/Central Africa that is professional, safe and with the conviction and possibilities to become the best airline in Africa, and one of the worlds leading ICAO carriers.
They have just acquired 7 B737EFIS for their African Network, more A340's will join too.



Shiek!
User currently offlineDolphinflyer From United States of America, joined May 2005, 201 posts, RR: 1
Reply 15, posted (8 years 11 months 1 week 4 days 20 hours ago) and read 2298 times:

Quoting Coa747 (Reply 10):
The feeling in Washington from people I have talked to is that they haven't and are going to continue to make life difficult for any Virgin incarnation here in the US because bottom line is Richard is British and the UK is still screwing us when it comes to Heathrow and they don't care if he only owned 1% he still isn't going to make any friends here with Virgin America.

I for one, am someone who lives in Washington, DC and am supportive of Virgin America's efforts to get off the ground.

And as for the screwing at LHR, it's rather obvious that BA, VS, AA and UA are all interested in continuing to milk that lucrative, limited-entry market. Do you think that AA or UA are interested in seeing a DL, CO, NW, etc. plane at LHR? No way! It's not such a clear, black-and-white issue as you'd like to make it out to be.


User currently offlineAirchabum From United Kingdom, joined Oct 2001, 769 posts, RR: 10
Reply 16, posted (8 years 11 months 1 week 4 days 18 hours ago) and read 2290 times:

Dear Coa747

From memory, so aplogies if any are incorrect......
VS is 49% owned by Singapore Airlines.
Ryanair (the largest LCC based in the UK) is Irish.
easyJet (2nd largest LCC) was set up and owned initially by a Greek bloke.
BMI is (majority?) owned by Lufthansa/SAS.
Air UK has all but disappeared into KLM.
Britannia/Thomsonfly is owned by the German TUI Group.
Excel Airways is owned by Air Atlanta (Icelandic), and I'm sure there are more examples.
Also Harrods is owned by an Egyptian and Manchester United is owned by Yanks!

So please don't expect us Brits to feel sorry for you when you complain about a new airline because it isn't 100% American owned. Most Brits will buy/use products made by Coca-Cola, McDonalds, Kellogs, Heinz, Ford, GM, Colgate-Palmolive, etc, etc every day. It would appear that the free market is ok so long as no one wants to try it in your own back yard!

Also the situation with LHR is that it is FULL! Until they build any more runways (10 years at least...) the only way to get an arrival/departure slot is for someone else to give up theirs, which is why smaller airlines have been selling their slots for £millions and moving services to LGW/STN.

Cheers



Biggidy biggidy bong
User currently offlineCloudyapple From Hong Kong, joined Jul 2005, 2454 posts, RR: 9
Reply 17, posted (8 years 11 months 1 week 4 days 13 hours ago) and read 2156 times:

Quoting Airchabum (Reply 16):

That sums it up~ There are a lot of people with double standards.



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