Virgin Atlantic COO Julie Southern has given the clearest indication yet that the two airlines could also become alliance partners. “I suspect in due course you may see us joining SkyTeam,” Southern said in an interview to the Financial Times.
http://atwonline.com/airline-finance...m-membership-after-delta-deal-0218
Rgds.
G.
Moderators: richierich, ua900, PanAm_DC10, hOMSaR
RE: VS Likely Joining SkyTeam
Is this really a surprise ? With Delta buying 49% this is just one more step in Virgin Integration into Delta's world.
RE: VS Likely Joining SkyTeam
No real surprises here..........if VS turned around and went with Star, then i would be staggered.....as would i suspect be DL.
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- Bongodog1964
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RE: VS Likely Joining SkyTeam
Reading the linked article,with references to "doing whats best for the business" and "keeping options open" it comes down to what I said on another thread, SRB controls 51% and VS will head in the direction he wants it to go in. All DL can do is strap themselves in and enjoy the ride !
RE: VS Likely Joining SkyTeam
Well yes obviously he controls majority stake. But SRB is not a stupid man. I think he realizes at this point that he needs DL as much as DL needs VS. With the powerhouse that BA/AA are in the London market, I believe he can't run this alone anymore. I think joining ST is the way to go.
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lightsaber
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RE: VS Likely Joining SkyTeam
I suspect DL had a few talks with the executives of VS, including SRB, before buying the stake.
VS will not survive on its own. The Virgin airlines are more than VS too.
With the AA/US merger, the time a "Virgin Alliance" would be enough has come and gone. With VS very unlikely to join OW, that really leaves Skyteam as *A is not a good fit (too diluted). I suspect SRB was pushing for Skyteam for a bit and the US/AA merger was the last straw.
Lightsaber
| Quoting toobz (Reply 4): Well yes obviously he controls majority stake. But SRB is not a stupid man. I think he realizes at this point that he needs DL as much as DL needs VS. |
VS will not survive on its own. The Virgin airlines are more than VS too.
With the AA/US merger, the time a "Virgin Alliance" would be enough has come and gone. With VS very unlikely to join OW, that really leaves Skyteam as *A is not a good fit (too diluted). I suspect SRB was pushing for Skyteam for a bit and the US/AA merger was the last straw.
Lightsaber
RE: VS Likely Joining SkyTeam
| Quoting Bongodog1964 (Reply 3): All DL can do is strap themselves in and enjoy the ride ! |
Don't think so. That "ride" is more and more thought out of for Virgin, as opposed to by Virgin...
RE: VS Likely Joining SkyTeam
What a joke... of course they will be joining SkyTeam.
Seeing that being a stand alone airline has not yielded the desired results, and with DL controlling 49% of Virgin Atlantic, as well as being the singing voice @ ST... This is a marriage of convenience.
And for its own sake, I hope that Virgin America can join ST as well. Being a San Franciscan, we love our hometown airline, but without some form of Delta intervention I am not sure how much longer can Virgin America keep plugging along. It has been hemorrhaging cash since day one and continues to pick the low hanging fruit - without a clear strategy other than an awesome customer experience. Clearly the latter has not been enough - after a few years since launch, its market share @ SFO is stagnant at 9% while the United juggernaut controls 5 times that figure - 46% to be precise - FY 2012 figures, source San Francisco International Airport.
| Quote: In an official statement, Virgin said: “Joining SkyTeam is not a condition of the joint venture with Delta, although Virgin Atlantic is evaluating its options in this regard. The airline has always kept alliance membership under review but has been clear that it needs to be in the best interests of the business.” |
Seeing that being a stand alone airline has not yielded the desired results, and with DL controlling 49% of Virgin Atlantic, as well as being the singing voice @ ST... This is a marriage of convenience.
And for its own sake, I hope that Virgin America can join ST as well. Being a San Franciscan, we love our hometown airline, but without some form of Delta intervention I am not sure how much longer can Virgin America keep plugging along. It has been hemorrhaging cash since day one and continues to pick the low hanging fruit - without a clear strategy other than an awesome customer experience. Clearly the latter has not been enough - after a few years since launch, its market share @ SFO is stagnant at 9% while the United juggernaut controls 5 times that figure - 46% to be precise - FY 2012 figures, source San Francisco International Airport.
RE: VS Likely Joining SkyTeam
Would the other Virgin brand airlines ... esp. Virgin America ... follow suit?
If yes, that could a lot of interesting code-share options, especially in SEA with AS on the ground.
If yes, that could a lot of interesting code-share options, especially in SEA with AS on the ground.
RE: VS Likely Joining SkyTeam
Doesn't V Australia have links with Etihad who in turn seem to be cosying up with AF/KL, so another possible little link between the Virgin brand and Skyteam.
RE: VS Likely Joining SkyTeam
WelI, what a surprise 
Although, I truly don't know what the alliance is to gain from this. This is to more or less help Virgin gain some connecting pax in other Skyteam hubs. That's about it I'm afraid. Virgin is really just to small to make a significant impact to the alliance (someone quoted 3% of LHR slots). People will still be routed via CDG for connections for example, and their LGW and MAN ops won't even see almost traciable differences in people's flying patterns (given DL/AF/KL? does not fly to LGW)
Do tell me if I'm missing anything.
Although, I truly don't know what the alliance is to gain from this. This is to more or less help Virgin gain some connecting pax in other Skyteam hubs. That's about it I'm afraid. Virgin is really just to small to make a significant impact to the alliance (someone quoted 3% of LHR slots). People will still be routed via CDG for connections for example, and their LGW and MAN ops won't even see almost traciable differences in people's flying patterns (given DL/AF/KL? does not fly to LGW)
Do tell me if I'm missing anything.
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- RyanairGuru
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RE: VS Likely Joining SkyTeam
| Quoting mayor (Reply 11): Am I wrong or doesn't Virgin Australia have a JV with DL, already? |
Yes they do. VA have 4 JVs: DL (SkyT), NZ (Star), SQ (Star), EY (unaligned)
Realistically, I think that VA are more interested in being the "AS of the South" than tying themselves down with anyone in particular.
That said, Star would make more sense than Sky, as UA could relatively easily replace DL in the VA network, while NZ and SQ would be harder to replace in SkyT.
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- Bongodog1964
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- BestWestern
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RE: VS Likely Joining SkyTeam
| Quoting BA0197 (Reply 12): Although, I truly don't know what the alliance is to gain from this. This is to more or less help Virgin gain some connecting pax in other Skyteam hubs. That's about it I'm afraid. Virgin is really just to small to make a significant impact to the alliance (someone quoted 3% of LHR slots). People will still be routed via CDG for connections for example, and their LGW and MAN ops won't even see almost traciable differences in people's flying patterns (given DL/AF/KL? does not fly to LGW) |
BA0197 - you forgot the other end of these routes. VS is strong in London, but probably lacks traffic and yield on the other end of the route system - if DL feeds MCO or MIA for example with twenty five pax a day - that incremental revenue is significant. This will help VS in Asia for example - where Skyteam is strengthening.
DL can also feed the US network of VS in a meaningful way.
It makes Skyteam the second alliance in London
It establishes a presence on the London to Asia route map
RE: VS Likely Joining SkyTeam
| Quoting BA0197 (Reply 12): WelI, what a surprise Although, I truly don't know what the alliance is to gain from this. This is to more or less help Virgin gain some connecting pax in other Skyteam hubs. That's about it I'm afraid. Virgin is really just to small to make a significant impact to the alliance (someone quoted 3% of LHR slots). People will still be routed via CDG for connections for example, and their LGW and MAN ops won't even see almost traciable differences in people's flying patterns (given DL/AF/KL? does not fly to LGW) Do tell me if I'm missing anything. |
I don't think you're missing anything at all. All this really does is give Delta passengers more options to get to London, and possibly allow London-based passengers more connecting options within the US to smaller cities. Really no benefit for the alliance as all of the available connections are already possible via AMS, CDG, JFK, ATL, MXP, etc.
I think VS would have made more sense for Star, simply given the fact that Star has so many more European partners that serve LHR. Since VS doesn't have any shorthaul ops, the flights to FRA/MUC/HAM/OSL/CPH/ARN/ZRH/VIE/LIS/WAW/IST/ZAG/ATH/TXL/DUS, etc. on Star carriers could almost serve as a defacto shorthaul hub. Only a few key holes are missing there - primarily AMS, MAD, BRU, CDG, and BCN.
SkyTeam really only offers connections to CDG/AMS/FCO/LIN/SVO.
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- deltal1011man
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RE: VS Likely Joining SkyTeam
| Quoting Bongodog1964 (Reply 3): All DL can do is strap themselves in and enjoy the ride ! |
It so funny how some of yall think that they are acting like kids. This is a company, they talk about things and want to do whats best for the investors. SRB doesn't just wake up and do things.
| Quoting ual777uk (Reply 2): as would i suspect be DL. |
nope. If Star was even possible then SQ would still own 49%. Its pretty amazing, Delta got its deal put int place, in writing, before they bought 49%. Amazingly, SRB didn't wake up yesterday and go "eh well I guess I'll join SkyTeam"
| Quoting mayor (Reply 11): Am I wrong or doesn't Virgin Australia have a JV with DL, already? |
Yes.
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- nickofatlanta
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RE: VS Likely Joining SkyTeam
| Quoting RyanairGuru (Reply 13): |
I don't believe The EY and SQ relationships are JVs.
RE: VS Likely Joining SkyTeam
| Quoting BestWestern (Reply 15): if DL feeds MCO or MIA for example with twenty five pax a day - that incremental revenue is significant. DL can also feed the US network of VS in a meaningful way. |
But this all happens already with interlining agreements ... a few years ago, I flew VS LHR-JFK, DL JFK-MCO on a VS ticket. Very recently I flew VS LHR-JFK, AA JFK-BOS on a VS ticket (despite the AA-BA JV etc., and worth noting that this was substantially cheaper than any BA/AA option) and I wasn't the only person at LHR checking in for a VS-AA connection in JFK.
I know that the perception here on a.net is that being a member of an alliance generates more connecting traffic, but does it REALLY generate that much more traffic than existing interline agreements?
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- Bongodog1964
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RE: VS Likely Joining SkyTeam
| Quoting Deltal1011man (Reply 17): Quoting Bongodog1964 (Reply 3): All DL can do is strap themselves in and enjoy the ride ! It so funny how some of yall think that they are acting like kids. This is a company, they talk about things and want to do whats best for the investors. SRB doesn't just wake up and do things. |
Ever had any involvement with business tycoons such as SRB ?
I once had the misfortune, their involvement in the most trivial matters can at times seem bewhildering, meanwhile vital matters can drift for months as they are presently engrossed in other parts of their empire.
Virgin doesn't have any outside investors, SRB and Virgin are one and the same. No chance of decisons being voted down by shareholders, no embarassing questions at the company AGM, no Warren Buffets pulling strings. Its SRB's to do what he wants with
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- deltal1011man
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RE: VS Likely Joining SkyTeam
| Quoting Bongodog1964 (Reply 20): Virgin doesn't have any outside investors, SRB and Virgin are one and the same. No chance of decisons being voted down by shareholders, no embarassing questions at the company AGM, no Warren Buffets pulling strings. Its SRB's to do what he wants with |
To a point. What happens if Delta dumps its investment?
and Im not saying SRB doesn't have control, I'm saying he isn't a child. He wants to make money and he is going to do what he has to do to make money. Delta wants him to make money. They are going to do what they have to do to get VS making money. Its a business, not playing house in the back yard.
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- Bongodog1964
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RE: VS Likely Joining SkyTeam
| Quoting Deltal1011man (Reply 21): To a point. What happens if Delta dumps its investment? and Im not saying SRB doesn't have control, I'm saying he isn't a child. He wants to make money and he is going to do what he has to do to make money. Delta wants him to make money. They are going to do what they have to do to get VS making money. Its a business, not playing house in the back yard. |
I'm sure SQ thought this way 10 years ago, then what happened ?
With the money SRB made last week from selling his stake in Virgin Media, he could probably send them a cheque today. He's in all probability reached the stage where money isn't the only consideration any more, so rich that he can do whatever he wants within reason.
RE: VS Likely Joining SkyTeam
[/quote]
SQ basically lost interest the moment they bought their 49% stake. The market has also changed alot in those years.
DL is going to be a far more active shareholder than SQ ever was - the JV is proof of that from the get go.
| Quoting Bongodog1964 (Reply 22): I'm sure SQ thought this way 10 years ago, then what happened ? |
SQ basically lost interest the moment they bought their 49% stake. The market has also changed alot in those years.
DL is going to be a far more active shareholder than SQ ever was - the JV is proof of that from the get go.
RE: VS Likely Joining SkyTeam
Bongo...the world and aviation industry is a lot more different than it was 10yrs ago, i.e. Joint ventures with BA/AA. Add to that, that SQ doesn't cooperate much with anyone. They are very much a go alone airline. DL is not. That's why this is so different. As you can see..VS is talking about joining an alliance. Very different situation at hand here.
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- BestWestern
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RE: VS Likely Joining SkyTeam
| Quoting GCT64 (Reply 19): I know that the perception here on a.net is that being a member of an alliance generates more connecting traffic, but does it REALLY generate that much more traffic than existing interline agreements? |
Yes it does. Look at the DL - KL feed in AMS and the DL - AF feed in CDG.
It also generates a higher quality, rather than lowest cost feed due to the FFP benefits that accrue from alliance membership, among other benefits.
RE: VS Likely Joining SkyTeam
| Quoting Bongodog1964 (Reply 22): With the money SRB made last week from selling his stake in Virgin Media, he could probably send them a cheque today. He's in all probability reached the stage where money isn't the only consideration any more, so rich that he can do whatever he wants within reason. |
I agree with the way you're thinking. An eccentric entrepreneur like SRB has his own agenda from time to time.
RE: VS Likely Joining SkyTeam
| Quoting Deltal1011man (Reply 21): Im not saying SRB doesn't have control, I'm saying he isn't a child. He wants to make money and he is going to do what he has to do to make money. Delta wants him to make money. They are going to do what they have to do to get VS making money. Its a business, not playing house in the back yard. |
People on this forum seem to think that DL is buying the SQ stake without Branson being on board. Firstly, it is likely that he had preemptive rights in case of a sale by SQ, and that the sale had to be approved by Branson first. Therefore, he clearly was involved in the transaction. Second, in addition to the purchase agreement that has already been signed, it is more than likely that at the closing of the transaction (i.e., once all regulatory approvals have been obtained), many more agreements will be signed, such as a shareholders agreement providing for certain supermajority rights for DL's protection, the agreements pertaining to the joint business operation in the U.S.-U.K. market, and some other commitments regarding SkyTeam, etc.
RE: VS Likely Joining SkyTeam
I don't think DL is looking for connections (they have those at AMS & CDG). With VS, they are looking for more access to the "single most important business travel airport in the world" (according to an article on Yahoo).
http://seekingalpha.com/article/1208...tives-are-undervalued?source=yahoo
For DL, it's all about corporate contracts. My friend is in sales and DL has been very happy with the increase in contracts in NYC since the buildup, but they know they need to offer more at LHR and LAX. That's going to be the focus for the next few years (DL has made no secret about that). Even with VS, Skyteam is still smaller at LHR than Star and OneWorld, but this agreement closes the gap somewhat.
http://seekingalpha.com/article/1208...tives-are-undervalued?source=yahoo
For DL, it's all about corporate contracts. My friend is in sales and DL has been very happy with the increase in contracts in NYC since the buildup, but they know they need to offer more at LHR and LAX. That's going to be the focus for the next few years (DL has made no secret about that). Even with VS, Skyteam is still smaller at LHR than Star and OneWorld, but this agreement closes the gap somewhat.
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- tullamarine
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RE: VS Likely Joining SkyTeam
| Quoting RyanairGuru (Reply 13): That said, Star would make more sense than Sky, as UA could relatively easily replace DL in the VA network, while NZ and SQ would be harder to replace in SkyT. |
DL is weaker than SQ, NZ and EY at VA because the latter three are all significant shareholders in the company. DL holds no equity in VA.
RE: VS Likely Joining SkyTeam
| Quoting tullamarine (Reply 29): DL is weaker than SQ, NZ and EY at VA because the latter three are all significant shareholders in the company. DL holds no equity in VA. |
I don't think that matters nowadays. There are many airlines in one alliance who are forging partnerships with airlines of other alliances or who are not affiliated with any alliance. I think VA is a smart company in that they go after what works for them regardless of which alliance the other airline is in. I think VA could remain without an alliance and thrive on just partnerships, similar to what JetBlue and AS do.
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