C010T3
Topic Author
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Best Hub For The New Varig

Sun Jul 30, 2006 2:11 am

The few routes that Varig is going to operate in the next weeks are flown out of GRU with the sole exception of GIG-EZE. That is a very strange development in Varig's strategy, given the fact that GIG is the airport in which Varig has the best structure: best lounge, most comfortable terminal, maintenance and so on, not to mention the headquarters near SDU. It is also necessary to emphasize that Varig lived its Golden Age using GIG as a hub and its crisis started by the time GRU's operation overcame GIG. Wouldn't it be more prudent to ditch GRU now, since the big competition there will definitely be an obstacle now that the company is considered unreliable by most passengers?
 
PPSMA
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RE: Best Hub For The New Varig

Sun Jul 30, 2006 2:26 am

My opinion is that GIG alone cannot generate enough traffic to guarantee a healthy operation. Having said that both GOL and TAM have been building up a strong hub of their own there, so it might also be a bit risky for RG.

But then again, what else is left?

Cheers
Aviation is my thing!
 
PPVRA
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RE: Best Hub For The New Varig

Sun Jul 30, 2006 2:43 am

CGH is TAM's and GOL's hub, not GRU. Varig should stick with GRU.

Remember that RG's owners is its ex-cargo subsidiary, so cargo is a big influence. SDU is no good for cargo, CGH isn't that great either and neither is GIG.

I believe Infraero should limit CGH to smaller aircraft- nothing greater than a 737 or A320; preferably A319/B73G. Varig could offer CGH Shuttle with the 737 or imagine how cool it would be to have E-jets flying back and forth?

And remember- while RG has weaken domestically at GRU, Sao Paulo is still a Star Alliance hub so you have to consider all the market that comes from abroad.

Cheers

[Edited 2006-07-29 19:58:26]
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
jrosa
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RE: Best Hub For The New Varig

Sun Jul 30, 2006 3:29 am

I think that Varig operations these days were and in the next weeks and will be very incipient. Therefore, it is very premature to draw conclusions concerning hubs, routes and fleet until the new management is able to really catch up Varig's operations.

The first effective step of New Varig was yesterday when the number of dismissed employees was released.
 
C010T3
Topic Author
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RE: Best Hub For The New Varig

Sun Jul 30, 2006 7:11 am

Quoting Jrosa (Reply 3):
I think that Varig operations these days were and in the next weeks and will be very incipient. Therefore, it is very premature to draw conclusions concerning hubs, routes and fleet until the new management is able to really catch up Varig's operations.

That's it, so why leave GIG empty now, especially when the fleet keeps changing. They must have to make a lot of ferry flights between GIG and GRU nowadays and they don't have money to spare to be moving the fleet empty around the country.
 
LipeGIG
Posts: 5050
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RE: Best Hub For The New Varig

Sun Jul 30, 2006 8:01 am

My opinion:

1) Rio is the most strong base of customers RG has (as well as where fidelity to Varig is stronger due to the size of their operations in the past at GIG and the shuttle service Rio-SP)

2) Sao Paulo for Varig is a connections hub, if someone can prove to me something different i can change my mind:

a) RG in the near past runs flights from POA, CWB, IGU, CNF, BSB, GYN, SSA, REC, FOR, MAO, AJU, all to GRU allowing connections and feeding their international ops. GRU is not the main Sao Paulo airport and G3/JJ use to offer "discount" fares while CGH prices are even higher.
b) GIG has only: POA, CWB, VIX, SSA, CNF, BSB, SSA and REC. GIG is O&D for domestic flights (note that RG use to fly GIG-CNF 4x GIG-VIX 4x and GIG-BSB 8x, while only GRU-CNF 2x and GRU-BSB 2x just to feed the international flights)
c) Any RG employee would confirm that GIG-FRA is at least 65% O&D GIG while GRU-FRA is stronger on connections.
d) Every day GRU-GIG "shuttle" carry more than 1000 daily pax from Rio.

3) Cargo in Rio is not so strong as GRU and VCP and due to this the demand for cargo on the flights is higher than Sao Paulo (where a lot of cargo planes use to fly to US and Europe)

4) Rio is under served, São Paulo isn't !

5) Lets compare:

RG M11 FRA vs LH 744 FRA
RG 763 MIA vs JJ A332 / AA 772 / AA 763 MIA
RG 763 JFK vs JJ A332 / AA 772 / JL B744 JFK / CO 762 EWR
RG M11 CDG vs AF 77W / JJ A332 CDG
RG M11 LHR vs BA 744 / JJ A332 LHR
RG 733 EZE vs JJ A332-A320-F100 / AR 735 / G3 738
RG 733 SCL vs JJ A332 / LA A320/763 SCL
RG 733 MAO-BOG vs AV 763/752 BOG non stop
RG 733 VVI-LIM vs LA 763 / TA A320 non stop

* For me Sao Paulo customers will decide on Tam, AF, AA, and others (it's easy for them as they just need to go to GRU). Varig will remain strong on POA, MAO, SSA, REC... but they are weak nowadays due to the problems they face. Who expect RG selling F again ?

And why GIG ?

- Without RG, AF/IB/TP are not in conditions to take care of the non-stop demand to Europe.
- Their base of customers is really high (RG use to be 50% of GIG till april 2005)
- High demand for new foreign business of Rio corporations (Petrobras, Vale do Rio Doce, All other oil market, Shipyards..) and also The Pan American Games.
- Rio still receive close to 30% of all business trips to Brazil (but only 15% as intl pax at GIG). Sao Paulo get around 55% but GRU is almost 4x higher than GIG in terms of passengers.

Well, and just to let all know, i will be transferred to New York effective september with 6x trips/year to Rio. More one claiming for a JFK-GIG non stop service!

RG at GIG could be the king as the market is under served and willing for non-stop service to places like LHR/MXP/JFK/SCL/LIM/CCS with good fares. RG at GRU will be one more, and will need to charge lower fares to gain the market confidence again.

But it's only my opinion... RG seems that decided in favor of GRU, and also it's very clear: high demand for connections (low fares on trips like FOR-GRU-FRA), but the Sao Paulo O&D is on someone else hands (AF,AA,JJ....) and the profit will be hard to be obtained. F customers will only return in one year, may be two. C customers, it depends on each corporate (my company will pay me GIG-ATL-JFK, and in the past i use to fly GIG-JFK with RG!) but it takes some time also. Y customers are even more sensitive for past problems and will avoid flying RG during a long time.

NOTE: Even JJ will stop F class service on JFK/MIA/LHR routes. Only two A332 GE powered will keep First Class Service, just for CDG.

Felipe
New York + Rio de Janeiro = One of the best combinations !
 
AwysBSB
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RE: Best Hub For The New Varig

Sun Jul 30, 2006 10:31 am

In my opinion GIG should be the only RG`s international hub of Southeastern Brazil.
I realize Star members like UA and LH would not like to see RG making such a decision, but RG might also have not liked when those partners decided to give more focus on IAD and MUC, respectively.
The point is, those changes are the best way to improve operations.
 
johnclipper
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RE: Best Hub For The New Varig

Sun Jul 30, 2006 12:48 pm

What I would like to know is when did things change (or what changed things) in Brazil for RG to swap GIG for GRU. I flew them JFK-GIG back in 1987 and GIG was king. All flights stopped first in GIG (if they continued to GRU). PA was doing the same thing. All flights for PA were routed through GIG except for a few times a week MIA-GRU or JFK-GRU flight. Was is a bilateral change? Was it economics? I know GRU is the business capital but did this just change "overnight"? Nowadays, only AA offers a daily GIG nonstop from MIA with a B767-300ER.
"Flown every aircraft since the Wright Flyer" (guys, if you take this literally, then you need to get a life...)
 
LipeGIG
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Joined: Tue May 03, 2005 7:33 am

RE: Best Hub For The New Varig

Sun Jul 30, 2006 1:11 pm

Quoting JohnClipper (Reply 7):

After GRU has been built, Infraero grant several incentives for airlines to divide flights between GIG and GRU. The problem is that Sao Paulo become even strong in terms of economy, and the government also accepted flights to main downtown airports, which produced a major concentration on Sao Paulo CGH. With the domestic flights going to CGH, and also the fact that some routes like BSB, CNF, VIX, CPQ was running out of SDU (downtown Rio) and not GIG, airlines start to drop GIG (due to the lack of domestic flights) in favor of GRU: Alitalia, Air Canada, Delta, Japan AirLines, South African, Continental, British, KLM, Lufthansa....
Now CGH+GRU are 35 million pax / year (15 million at least connections, 4 million from SDU and 3 million from GIG), and main routes are out of GRU where the bigger number of C+F customers (due to the high number of flights) depart.

AA will upgrade GIG to a 12x weekly (2x daily during summer) next year. DL also offers daily 767-300ER from ATL to GIG. CO although a good number of C customers from Rio due to the oil market (IAH-GRU-GIG), keep a stop at GRU, and UA also do the same on their IAD service.

Sad history but note, i'm not trying to say GRU is not important! We have one of the top 5 domestic markets in the world, seems other cities deserves more international services.

Felipe
New York + Rio de Janeiro = One of the best combinations !
 
steeler83
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Joined: Sat Feb 25, 2006 2:06 pm

RE: Best Hub For The New Varig

Sun Jul 30, 2006 1:11 pm

Quoting C010T3 (Thread starter):
The few routes that Varig is going to operate in the next weeks are flown out of GRU with the sole exception of GIG-EZE. That is a very strange development in Varig's strategy, given the fact that GIG is the airport in which Varig has the best structure: best lounge, most comfortable terminal, maintenance and so on, not to mention the headquarters near SDU.

Yeah, I would think that GIG would have trememdous O&D to support a hub operation, considering that it's a vacation destination, at least for us Americans it is anyway...
Do not bring stranger girt into your room. The stranger girt is dangerous, it will hurt your life.
 
stirling
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RE: Best Hub For The New Varig

Sun Jul 30, 2006 1:40 pm

Quoting JohnClipper (Reply 7):
PA was doing the same thing. All flights for PA were routed through GIG except for a few times a week MIA-GRU or JFK-GRU

Hell, PanAm at one point served arounf 27 destinations from Rio.
And close to that same number from MAO.
About half that from SAO.

And their international flights didn't just stop off in other Latin America countries, or go nonstop to the USA.....PA also had a flight SAO-RIO-REC-DKR-LIS-PAR-FRA. Another variation of that branched off, going LIS-NCE-GVA-MUC.
Delete this User
 
MAH4546
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Joined: Wed Jan 24, 2001 1:44 pm

RE: Best Hub For The New Varig

Sun Jul 30, 2006 1:50 pm

Quoting JohnClipper (Reply 7):
Nowadays, only AA offers a daily GIG nonstop from MIA with a B767-300ER.

It will be 2x daily, year-round eff. 01Nov06.
a.
 
LipeGIG
Posts: 5050
Joined: Tue May 03, 2005 7:33 am

RE: Best Hub For The New Varig

Sun Jul 30, 2006 10:46 pm

Quoting MAH4546 (Reply 11):
Quoting JohnClipper (Reply 7):
Nowadays, only AA offers a daily GIG nonstop from MIA with a B767-300ER.

It will be 2x daily, year-round eff. 01Nov06.

First week of April, 2007
American Airlines
AA 2980 Rio De Janeiro Int'l (GIG), Rio De Janeiro, Rio De Janeiro, Brazil
Terminal 1 22:55
Miami Int'l (MIA), Miami, Florida, USA 06:19+1 day(s)
Non-stop
763 8h24min Daily except Wednesday
Saturday

Mark, AA will change this ?

Felipe
New York + Rio de Janeiro = One of the best combinations !
 
georgiabill
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RE: Best Hub For The New Varig

Sun Jul 30, 2006 10:53 pm

Curious does anyone know how many aircraft the new RG will be flying? How many will be widebodies? Any chance of seeing airbus in the fleet or will it remain only a boeing operator?
 
LipeGIG
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RE: Best Hub For The New Varig

Sun Jul 30, 2006 11:21 pm

Quoting Georgiabill (Reply 13):
Curious does anyone know how many aircraft the new RG will be flying? How many will be widebodies? Any chance of seeing airbus in the fleet or will it remain only a boeing operator?

Georgia, everything is possible nowadays, they are negotiating with Boeing (owner of 5 M11 leased to Varig) and also some lessors (ILFC, Bristol, Sojitz, GATX and others) to keep more planes, but the results are not so clear. Varig need 13 widebodies, but only in 2 weeks we can get a better picture of such negotiations.
Airbus could be an option if they need new aircrafts, but IMO their main problem is the past due leasing, although it's not "new" Varig commitment, the lessors required the payment in order to keep the fleet under RG tail (and i doubt a new lessor will accept to lease more planes without strong guarantees).

Felipe
New York + Rio de Janeiro = One of the best combinations !
 
PPVRA
Posts: 7878
Joined: Fri Nov 12, 2004 7:48 am

RE: Best Hub For The New Varig

Mon Jul 31, 2006 1:24 am

Quoting LipeGIG (Reply 5):
Well, and just to let all know, i will be transferred to New York effective september with 6x trips/year to Rio. More one claiming for a JFK-GIG non stop service!

Congratulations my friend!!

Quoting LipeGIG (Reply 5):
1) Rio is the most strong base of customers RG has (as well as where fidelity to Varig is stronger due to the size of their operations in the past at GIG and the shuttle service Rio-SP)

I agree with Rio. My intentions with my post were not to ignore Rio, but as you said yourself; GRU is not unimportant. I think RG should have strong focus in Rio, especially at first adn to main inernational destinations, but I think Varig should still have their hub at GRU because it is still the largest market.

Also as you said: Varig used to be very strong at POA, REC, SSA and MAO- which IMO are excellent regional-hubs for international flights outside of GRU/GIG.

Cheers
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
billreid
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RE: Best Hub For The New Varig

Mon Jul 31, 2006 1:27 am

Atlantis.
Way down below the ocean.
Some people don't get it. Business is about making MONEY!
 
PPVRA
Posts: 7878
Joined: Fri Nov 12, 2004 7:48 am

RE: Best Hub For The New Varig

Mon Jul 31, 2006 1:41 am

Quoting BillReid (Reply 16):
Atlantis.
Way down below the ocean.

They could code-share with UA and US (already star alliance partners) but would face strong competition from DL and NW.

 Yeah sure
"If goods do not cross borders, soldiers will" - Frederic Bastiat

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