TeamInTheSky From United States of America, joined Apr 2011, 515 posts, RR: 0 Posted (6 months 1 week 2 days 12 hours ago) and read 12028 times:
Hi All,
Sorry for another DL VS acquisition thread. Moderators please delete if necessary. However, it has long been speculated on here that it was highly unlikely that VS (like IT) would ever take the A380's they had on order. The passenger numbers were never there to support that capacity.
However, if the JV deal between DL and VS gets done and dusted, is it now more likely that VS might actually take those planes? Most of you are smarter than me when it comes to projecting or predicting capacity, but I could see if the JV starts going well and is able to generate more passengers (through new corporate or non-corporate deals) places like LAX could possibly take a VS A380 with enough domestic feed on the US and possibly UK side.
That would mean that DL would effectively be selling seats on two (AF and VS) A380s!
Thanks for your thoughts ahead of time.
Regards,
Team
Since 2010: DL, KL, AF, WX, IG, FR , FL, U2, AK, BA, OK, UX, VS
TeamInTheSky From United States of America, joined Apr 2011, 515 posts, RR: 0 Reply 3, posted (6 months 1 week 2 days 12 hours ago) and read 11912 times:
Quoting richardw (Reply 1):
DL won't acquire VS, it's only a 49% stake!
Okay, if you don't work in finance, I can understand how the lingo is confusing. But Delta did AQUIRE a 49% stake in VS. Thus an AQUISITION took place. The term AQUISITION does not necessary connote a majority stake was taken. It means ownership was taken.
Regards,
Team
Since 2010: DL, KL, AF, WX, IG, FR , FL, U2, AK, BA, OK, UX, VS
art From Lebanon, joined Feb 2005, 2979 posts, RR: 0 Reply 4, posted (6 months 1 week 2 days 12 hours ago) and read 11798 times:
Question: why would DL favour VS acquiring A380 more than the previous minority shareholder? SIA seems very happy with A380. They have a lot of operating data from which they would have a good idea of the economics TATL.
Deltal1011man From United States of America, joined Sep 2005, 8628 posts, RR: 8 Reply 5, posted (6 months 1 week 2 days 12 hours ago) and read 11797 times:
jfk777 From United States of America, joined Aug 2006, 7413 posts, RR: 7 Reply 9, posted (6 months 1 week 2 days 11 hours ago) and read 11695 times:
How does Delta buying 49% of Virgin do anything with Virgin's A380 order ? Those A380's will probably never be built. Virgin will likely take A350-1000 in their place.
slinky09 From United Kingdom, joined Jun 2009, 621 posts, RR: 0 Reply 11, posted (6 months 1 week 2 days 11 hours ago) and read 11578 times:
Quoting Deltal1011man (Reply 5): IMHO no. It doesn't change the key issue with Virgin(no shorthaul feed) and doesn't change this lovely economy.
VS launches short haul flying on March 31st initially to MAN, EDI and ABZ. Other routes may follow if VS opts to take the other remedy slots awarded to it.
Quoting avek00 (Reply 6):
If anything, it makes a VS acquisition of 777s more likely.
Erm nope IMO, wishful thinking.
Quoting jfk777 (Reply 9): How does Delta buying 49% of Virgin do anything with Virgin's A380 order ? Those A380's will probably never be built. Virgin will likely take A350-1000 in their place.
xjramper From United States of America, joined Dec 2003, 2352 posts, RR: 52 Reply 12, posted (6 months 1 week 2 days 10 hours ago) and read 11284 times:
Quoting richardw (Reply 7): Quoting TeamInTheSky (Reply 3):
It means ownership was taken.
Nope.
There has been no majority change in ownership of VS.
The only reason why there was no "majority change in ownership" is because international laws prohibit a foreign carrier from having a majority ownership. Also the reason why VS doesn't own VAustralia or VX, but you know for damn sure SRB has a voice in every single thing either carrier does.
Quoting TeamInTheSky (Reply 3): Okay, if you don't work in finance, I can understand how the lingo is confusing. But Delta did AQUIRE a 49% stake in VS. Thus an AQUISITION took place. The term AQUISITION does not necessary connote a majority stake was taken. It means ownership was taken.
Regards,
Team
Sorry. But while they acquired a 49% ownership of VS, DL did not complete an acquisition of VS. That would require a take over (whether friendly or hostile) of a majority, if not all, of the company and it's assets. DL has specifically stated that they will fly flights based on metal neutrality and this being solely a JV type deal. The brand of VS will not be going away any time soon as it's still in majority control of SRB.
vgnatl747 From United States of America, joined Apr 2001, 1492 posts, RR: 2 Reply 13, posted (6 months 1 week 2 days 10 hours ago) and read 11205 times:
Quoting xjramper (Reply 12): Sorry. But while they acquired a 49% ownership of VS, DL did not complete an acquisition of VS. That would require a take over (whether friendly or hostile) of a majority, if not all, of the company and it's assets.
I wish people would stop calling this a Merger or Acquisition. While they did technically acquire a piece of VS, the team "acquisition" is typically representative of a complete acquisition of the company, which isn't what happened here. DL has no more/less power than SQ had. They own a minority stake with three seats on the board (I believe SQ also had three seats). The only difference here is that I'd expect to see DL do more with their investment than SQ did. Hopefully we'll see better collaboration, and a more concerted effort to benefit both carriers. SQ was really just a silent investor and didn't do much to help/hurt VS.
I doubt DL's three seats would affect VS fleet planning that much. They may have access to better resources now, and be able to make better decisions (if DL is open with operating metrics), but I doubt DL has the power to sway VS away from or to a specific airframe.
TeamInTheSky From United States of America, joined Apr 2011, 515 posts, RR: 0 Reply 14, posted (6 months 1 week 2 days 8 hours ago) and read 10861 times:
Quoting xjramper (Reply 12): Sorry. But while they acquired a 49% ownership of VS, DL did not complete an acquisition of VS. That would require a take over (whether friendly or hostile) of a majority, if not all, of the company and it's assets. DL has specifically stated that they will fly flights based on metal neutrality and this being solely a JV type deal. The brand of VS will not be going away any time soon as it's still in majority control of SRB.
Quoting vgnatl747 (Reply 13): the team "acquisition" is typically representative of a complete acquisition of the company, which isn't what happened here. DL has no more/less power than SQ had. They own a minority stake with three seats on the board (I believe SQ also had three seats). The only difference here is that I'd expect to see DL do more with their investment than SQ did. Hopefully we'll see better collaboration, and a more concerted effort to benefit both carriers. SQ was really just a silent investor and didn't do much to help/hurt VS.
Another thread derailed by semantics. Do either of you suspect that VS will come to operate an A380? Or shall we continue to discuss if DL's 49% acquisiton of VS shares is misstated?
Regards,
Team
[Edited 2012-12-12 07:15:42]
[Edited 2012-12-12 07:16:14]
Since 2010: DL, KL, AF, WX, IG, FR , FL, U2, AK, BA, OK, UX, VS
EagleBoy From Niue, joined Dec 2009, 1634 posts, RR: 2 Reply 15, posted (6 months 1 week 2 days 6 hours ago) and read 10450 times:
Ok lets get way from the 'semantics'.
The question of whether or not VS will ever take delivery of their A380 order is based on the assumption that VS do not have the market numbers to reliably fill these aircraft profitably.
The VS fleet consists of 44 aircraft, of which 13 are B744. So the A380 is quite the jump in overall capacity. (6 plus 6 options)
The DL purchase of the SQ 49% shareholder gives them seats on the board and opens the way for a DL/VS joint venture across the Atlantic. So if this deal works out then yes we could see VS getting a greater share of the US/UK market. However the A380 order was placed before this deal, so the business case must have been in place for them to order the A380.
kanban From United States of America, joined Jan 2008, 2500 posts, RR: 21 Reply 16, posted (6 months 1 week 2 days 6 hours ago) and read 10311 times:
The order was placed when there was a sales rush similar to the 747 rush.. later some airlines realized they were over extended without a sufficient customer base.. in this case Branson's ego probably prompted the order.
As some else noted the A380's will fade to smaller models
Alsatian From France, joined May 2005, 229 posts, RR: 0 Reply 17, posted (6 months 1 week 2 days 5 hours ago) and read 10210 times:
IMHO the 4 powered A380 is perfect for airlines flying very long routes as SIN-LHR or SYD-LAX. According to their timetable these airlines send the doubledecker to other shorter routes to maximize the schedules. For Virgin + Delta operations from LHR the routes to JFK, ATL or even LAX don't seem long enough.
VS11 From United States of America, joined Jul 2001, 978 posts, RR: 0 Reply 20, posted (6 months 1 week 2 days 3 hours ago) and read 9774 times:
Quoting kanban (Reply 16): The order was placed when there was a sales rush similar to the 747 rush.. later some airlines realized they were over extended without a sufficient customer base.. in this case Branson's ego probably prompted the order.
Rather wrong - simply nobody at VS or elsewhere expected the world economy to plunge into this horrendous recession. That's all. No ego involved. Buying planes is a very long-term decision - unfortunately nobody has a crystal ball...
Revelation From United States of America, joined Feb 2005, 10572 posts, RR: 21 Reply 22, posted (6 months 1 week 2 days 3 hours ago) and read 9595 times:
Quoting PHX787 (Reply 18): Quoting avek00 (Reply 6):
If anything, it makes a VS acquisition of 777s more likely.
I'm not sure about the dissent on this argument but this is what I was thinking, especially since DL now has 3 seats on VS's board
Right, but not the one SRB sits in.
I think we need to consider some facts:
1) VS pilots are trained for Airbus aircraft
2) Airbus has a chunk of VS money as deposits for the A380s
which makes purchase of Airbus products far more likely than 777s.
People are over-emphasizing what role DL will play. They can't ever control VS, and they can sell off their shares just like SQ just did, so VS is not going to let DL ingest them. VS will remain a stand-alone entity.
Both sides hope the JV will pump money into both entities' hands, but that's about it.
If it does, I'm convinced we'll see VS buying new Airbus products, almost certainly A350s.
rwy04lga From United States of America, joined Jul 2005, 2258 posts, RR: 7 Reply 24, posted (6 months 1 week 2 days 3 hours ago) and read 9480 times:
Quoting xjramper (Reply 12): The brand of VS will not be going away any time soon as it's still in majority control of SRB.
Actually, it's the other way around...SRB is in majority control of VS.
The early bird gets the worm, BUT...the second mouse gets the cheese!
25 PSA727LAX: Certainly I can see VS buying A350s but not the 380. If anything they go with the 747-8's as a replacement of 744's & A346's still in the fleet. T
26 ScottB: It's very likely that VS has the right to ask Airbus to refund that money without penalty given the lengthy A380 delays. I'd also argue that no one a
27 xjramper: Au contraire, you have to know the definition of what actually happened in order of how to appropriately respond to the question at hand. If DL acqui
28 Revelation: Both Airbus and VS have been very coy about the exact status of that order, but the last official word I can find is that as of 2006 they were "delay
29 KaiTak747: I think the fact that DL has acquired 49% of VS is irrelevant to the A380 question. DL would like VS to be profitable, and twins are far less of a ris
30 SEA: Apart from the ones who are trained for the 744
31 VS11: Yes, I agree - opening up LHR did impact obviously the capacity question but in general my idea was that the A380 decision had been made long time ag
32 waly777: This may answer some of your questions "I know for sure it is a lot better return than buying an A380" is a quote from Richard Anderson. http://skift.
33 Revelation: Ok, should have said "many" or some such. Their wiki page has their fleet at 31 Airbus vs 13 744s, but I'm sure yourself or someone else will come al
34 delimit: And soon the 787s of course. I do have to wonder though, if VS is in the same position TG was; that they signed a contract that will not let them cha
35 ScottB: Airbus seems incredibly reluctant to ever cancel orders unless it's absolutely necessary to do so. They're still showing orders for 5 A350-800's and
36 Revelation: Which might imply that the VS A380 orders will sit on the books till the A380 program is terminated, which even in my pessimistic mind would not be f
37 Deltal1011man: I know this. 3 cities doesn't give them a real short haul network. Its a step, but its nearly impossible for VS to build a real network from LHR. agr
38 astuteman: I'm not convinced of that as in most cases it has been VS who have been delaying the delivery date. Just this summer VS said the order still stood. ?
39 aircanada014: Do you have the link to confirm delta acquired vs?
40 delimit: Jesus. It's obvious he's referring to Delta's acquisition of 49% of VS. The word acquisition does not mean they took control. All you people objectin
41 delta88: IMHO i dont think Virgin Atlantic would ever take delivery of any short haul airliners. With the Virgin Atlantic Group in Place, there is no need for
42 xjramper: Maybe I'm mis-reading this from the OP, but tell me how what I wrote is off topic. http://www.businessdictionary.com/definition/acquisition.html For
43 JamBrain: The facts on just one route ........that Delta bring 29 flights into EWR with huge quantity of corporates ........VS o/d demand currently requires a
44 delimit: An acquisition is a purchase. Saying Delta acquired 49% of VS is perfectly correct. Welcome to English. Words have multiple meanings.
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