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DL Acquisition Of VS Make VS A380 More Likely?  
User currently offlineTeamInTheSky From United States of America, joined Apr 2011, 531 posts, RR: 0
Posted (1 year 4 months 4 days 21 hours ago) and read 13689 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, VN, K6
44 replies: All unread, showing first 25:
 
User currently offlinerichardw From United Kingdom, joined May 2001, 3744 posts, RR: 0
Reply 1, posted (1 year 4 months 4 days 21 hours ago) and read 13673 times:

Quoting TeamInTheSky (Thread starter):
DL VS acquisition thread

DL won't acquire VS, it's only a 49% stake!


User currently offlinedelimit From United States of America, joined Jan 2009, 1486 posts, RR: 2
Reply 2, posted (1 year 4 months 4 days 21 hours ago) and read 13614 times:

Quoting richardw (Reply 1):
DL won't acquire VS, it's only a 49% stake!

DL has announced the acquisition of a 49% stake in VS. See how well that works?

I'd say it makes the purchase more likely, but I'm still not sure it will happen.


User currently offlineTeamInTheSky From United States of America, joined Apr 2011, 531 posts, RR: 0
Reply 3, posted (1 year 4 months 4 days 21 hours ago) and read 13573 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, VN, K6
User currently offlineart From United Kingdom, joined Feb 2005, 3341 posts, RR: 0
Reply 4, posted (1 year 4 months 4 days 20 hours ago) and read 13459 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.

User currently offlineDeltal1011man From United States of America, joined Sep 2005, 9071 posts, RR: 12
Reply 5, posted (1 year 4 months 4 days 20 hours ago) and read 13458 times:

Quoting TeamInTheSky (Thread starter):

IMHO no. It doesn't change the key issue with Virgin(no shorthaul feed) and doesn't change this lovely economy.



yep.
User currently offlineavek00 From United States of America, joined Oct 2004, 4281 posts, RR: 20
Reply 6, posted (1 year 4 months 4 days 20 hours ago) and read 13428 times:

If anything, it makes a VS acquisition of 777s more likely.


Live life to the fullest.
User currently offlinerichardw From United Kingdom, joined May 2001, 3744 posts, RR: 0
Reply 7, posted (1 year 4 months 4 days 20 hours ago) and read 13428 times:

Quoting TeamInTheSky (Reply 3):
It means ownership was taken.

Nope.

There has been no majority change in ownership of VS.


User currently offlineby738 From Tonga, joined Sep 2000, 2173 posts, RR: 1
Reply 8, posted (1 year 4 months 4 days 20 hours ago) and read 13369 times:

Quoting Deltal1011man (Reply 5):
It doesn't change the key issue with Virgin(no shorthaul feed)

Im sure I read of upcoming EI A320's ??  


User currently offlinejfk777 From United States of America, joined Aug 2006, 8089 posts, RR: 7
Reply 9, posted (1 year 4 months 4 days 20 hours ago) and read 13356 times:
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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.

User currently offlineanstar From United Kingdom, joined Nov 2003, 5080 posts, RR: 6
Reply 10, posted (1 year 4 months 4 days 20 hours ago) and read 13343 times:

I would say the 380 order will be converted to A350's to replace the 747 fleet.

So eventually they will have 350/787 only - with perhaps some 320's thrown in.= if the shorthaul stuff works.


User currently offlineslinky09 From United Kingdom, joined Jun 2009, 790 posts, RR: 0
Reply 11, posted (1 year 4 months 4 days 20 hours ago) and read 13239 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.

Absolutely.


User currently offlinexjramper From United States of America, joined Dec 2003, 2448 posts, RR: 51
Reply 12, posted (1 year 4 months 4 days 19 hours ago) and read 12945 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.



Look ma' no hands!
User currently offlinevgnatl747 From United States of America, joined Apr 2001, 1502 posts, RR: 2
Reply 13, posted (1 year 4 months 4 days 19 hours ago) and read 12866 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.



Work Hard. Fly Right. Continental Airlines
User currently offlineTeamInTheSky From United States of America, joined Apr 2011, 531 posts, RR: 0
Reply 14, posted (1 year 4 months 4 days 17 hours ago) and read 12522 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, VN, K6
User currently offlineEagleBoy From Niue, joined Dec 2009, 1742 posts, RR: 2
Reply 15, posted (1 year 4 months 4 days 15 hours ago) and read 12111 times:
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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.


User currently offlinekanban From United States of America, joined Jan 2008, 3208 posts, RR: 25
Reply 16, posted (1 year 4 months 4 days 14 hours ago) and read 11972 times:
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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


User currently onlineAlsatian From France, joined May 2005, 412 posts, RR: 0
Reply 17, posted (1 year 4 months 4 days 14 hours ago) and read 11871 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.


Ok I am French but I am not on strike
User currently offlinePHX787 From Japan, joined Mar 2012, 6940 posts, RR: 18
Reply 18, posted (1 year 4 months 4 days 13 hours ago) and read 11742 times:

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



One of the FB admins for PHX Spotters. "Zach the Expat!"
User currently offlinemcogator From United States of America, joined Jul 2007, 178 posts, RR: 0
Reply 19, posted (1 year 4 months 4 days 12 hours ago) and read 11540 times:

Quoting TeamInTheSky (Thread starter):
That would mean that DL would effectively be selling seats on two (AF and VS) A380s!

They already do. You forgot about KE.


User currently offlineVS11 From United States of America, joined Jul 2001, 1062 posts, RR: 0
Reply 20, posted (1 year 4 months 4 days 12 hours ago) and read 11435 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...


User currently offlineanstar From United Kingdom, joined Nov 2003, 5080 posts, RR: 6
Reply 21, posted (1 year 4 months 4 days 12 hours ago) and read 11343 times:

Quoting EagleBoy (Reply 15):

The VS fleet consists of 44 aircraft, of which 13 are B744. So the A380 is quite the jump in overall capacity.

Well VS 747's from LGW have 455 passengers... which is about the same as some A380 operators


User currently offlineRevelation From United States of America, joined Feb 2005, 11918 posts, RR: 25
Reply 22, posted (1 year 4 months 4 days 12 hours ago) and read 11256 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.



Inspiration, move me brightly!
User currently offlineanstar From United Kingdom, joined Nov 2003, 5080 posts, RR: 6
Reply 23, posted (1 year 4 months 4 days 11 hours ago) and read 11188 times:

Quoting Revelation (Reply 22):
1) VS pilots are trained for Airbus aircraft

They are also trained on the Boeing 747.... and in the near future the Boeing 787.....


User currently offlinerwy04lga From United States of America, joined Jul 2005, 3105 posts, RR: 8
Reply 24, posted (1 year 4 months 4 days 11 hours ago) and read 11141 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.



Just accept that some days, you're the pigeon, and other days the statue
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 Post contains images 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 Post contains links 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 Post contains images 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 Post contains links 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 Post contains images 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 Post contains images 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 Post contains links and images 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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