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Channex757
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 12:37 am

Something like a red tail called VirginBE could be an advertising vehicle too at places like BHX. It then gives Virgin a footprint at the airport with the possibility of eventually dropping an A330 in there for a little longhaul love.

Other non-hub routes again would see the red tail appear at NWI etc.

The benefit of VS is that refinancing could be a strong possibility to turn the BE operation round. High costs cripples BE; a strong VS-DL-AF team could put the finances right back on track with their leverage and skills. Out go expensive Embraers and in come A220s for instance....
 
cschleic
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 12:43 am

peanuts wrote:
BestWestern wrote:
virgin launched little red for feed which failed.


Now they want to buy Flybe? For what. Inverness to Norwich gives virgin no benefit. It gives Delta no benefit.

Virgin is loss making.

This has to be a joke.


Man oh man.
This is actually a huge opportunity. Change it up. This is all DL pulling the strings, (and a little AF/KL).
DL took an interest in Virgin to make it better. This a part of that puzzle.
Give it a few years and the joke is probably on you...


BTW: The LHR slots are fenced in for domestic use, if you'd read the article. So, no, DL is not after that for its own use...


Could they be sold or leased to someone who would use them for domestic flights? I don't know enough about LHR slots to answer that question but even if just domestic, they must have some value.
 
Bhoy
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 12:45 am

konkret wrote:
C - I think you overestimate the value of the brand and especially its “global reach”. See what Alaska did with the Virgin brand in the US.

That would be because Alaska itself was an established brand in the US (and globally through FFP programs, for that matter, although only the US market is relevant given both AS and VX' networks) - how many people in Atlanta, Johannesburg, NYC, LA, India etc have heard of flybe?
 
Bhoy
Posts: 232
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 12:55 am

cschleic wrote:
peanuts wrote:
BestWestern wrote:
virgin launched little red for feed which failed.


Now they want to buy Flybe? For what. Inverness to Norwich gives virgin no benefit. It gives Delta no benefit.

Virgin is loss making.

This has to be a joke.


Man oh man.
This is actually a huge opportunity. Change it up. This is all DL pulling the strings, (and a little AF/KL).
DL took an interest in Virgin to make it better. This a part of that puzzle.
Give it a few years and the joke is probably on you...


BTW: The LHR slots are fenced in for domestic use, if you'd read the article. So, no, DL is not after that for its own use...


Could they be sold or leased to someone who would use them for domestic flights? I don't know enough about LHR slots to answer that question but even if just domestic, they must have some value.

I very much doubt they could be leased to anyone else for domestic use even if it was legally possible - these are throwbacks to when BA bought bmi to retain domestic competition ex-LHR. So BA can't take them, and what other UK based carrier has reasonable sized Aircraft to operate them? Won't be TUI or Thomas Cook, they have no interest in domestic shuttles, and won't be any European carrier under open skies because, well, open skies might disappear on March 31...
Which basically leaves bmi and Loganair, neither of whom operate anything bigger than a 50 seater.

Just can't see it being worthwhile.
 
tullamarine
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 1:28 am

Bhoy wrote:
konkret wrote:
C - I think you overestimate the value of the brand and especially its “global reach”. See what Alaska did with the Virgin brand in the US.

That would be because Alaska itself was an established brand in the US (and globally through FFP programs, for that matter, although only the US market is relevant given both AS and VX' networks) - how many people in Atlanta, Johannesburg, NYC, LA, India etc have heard of flybe?


In addition, many believe AS made a mistake in ditching the VX brand. Much of the "hipness" of VX and its perceived difference from standard US domestic operators was lost in the rebrand which may end up destroying significant value for AS shareholders. Culturally AS and VX were not natural partners.
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VS11
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 3:30 am

konkret wrote:

C - I think you overestimate the value of the brand and especially its “global reach”. See what Alaska did with the Virgin brand in the US.


And I think you don’t know that there are many more Virgin brands in the USA other than Virgin America. There is Virgin Mobile, Virgin Galactic, Virgin Hyperloop One, Virgin Hotels, Virgin Cruises, and now Virgin Trains to operate the new private railroad from Miami up north through Fort Lauderdale and beyond, and probably others that I am missing. The Virgin brand is indeed very well recognized globally, and specifically in the US. Alaska forfeited a great opportunity to use a brand still associated with innovations and great customer experience.
 
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aemoreira1981
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 4:45 am

This has DL/AF/KL written all over it. Through shareholding in AF/KL, DL is the majority owner of VS. The question might be: would a Q400/E175 fleet be ideal for such a feeder network, or could larger planes be needed? The Q400s will definitely stay, although would the E175 eventually be replaced by Embraer 195s on better lease terms, such as those leaving the AD fleet or the 6 currently dry-leased from Falko for London operations which could be purchased from Falko shortly?

As for slots, I could see BE leasing slots to KL for Cityhopper expansion, or KL could up-gauge to larger equipment into the UK including mainline, and with BE code-sharing on routes to and from AMS (at AMS, KLM could lease slots from BE to expand its own operations). The real question then becomes: would VS want any of the wet- or dry-leased ATRs? This fleet currently includes: 3 ATR72s wet-leased from RE, 3 ATR72s operated under a BE franchise by SI, 2 dry-leased from Aviation PLC (AVAP), and 3 dry-leased from QK. (The AVAP- and QK-owned ATR72s are wet-leased to SK.) The idea would be to work the BE slots and network for the benefit of VS/DL and AF/KL.
 
MIAFLLPBIFlyer
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 4:53 am

VS11 wrote:
konkret wrote:

C - I think you overestimate the value of the brand and especially its “global reach”. See what Alaska did with the Virgin brand in the US.


And I think you don’t know that there are many more Virgin brands in the USA other than Virgin America. There is Virgin Mobile, Virgin Galactic, Virgin Hyperloop One, Virgin Hotels, Virgin Cruises, and now Virgin Trains to operate the new private railroad from Miami up north through Fort Lauderdale and beyond, and probably others that I am missing. The Virgin brand is indeed very well recognized globally, and specifically in the US. Alaska forfeited a great opportunity to use a brand still associated with innovations and great customer experience.



The Virgin Trains USA from Miami to Fort Lauderdale to West Palm Beach is already creating quite a buzz down here. I had due to the Virgin America failure felt maybe Branson and Virgin branding's star was fading in the US - it still might be, but in southern Florida it clearly isn't.
 
Staralexi
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 5:54 am

Of course DL and other owners of VS are interested in Flybe. For them there is the massive asset of LHR slots. IF they can acquire BE they can potentially transfer all those slots to transatlantic operations after the qualifying period (2020). The problem they have to address is what ownership laws will apply to UK registered airlines after Brexit. Clearly Flybe will not be British owned if acquired by VS and will not be able to meet the traditional test of being"substantially owned and effectively controlled" by British interests. VS is minority British owned and effectively controlled by DL. Any new aviation agreement with the EU has yet to written and Flybe to all intents and purposes only uses UK cabotage and third/fourth freedom rights so traditional owneship rules may apply. I imagine the lawyers are puzzling over this one right now.
 
rutankrd
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 6:00 am

Staralexi wrote:
Of course DL and other owners of VS are interested in Flybe. For them there is the massive asset of LHR slots. IF they can acquire BE they can potentially transfer all those slots to transatlantic operations after the qualifying period (2020). The problem they have to address is what ownership laws will apply to UK registered airlines after Brexit. Clearly Flybe will not be British owned if acquired by VS and will not be able to meet the traditional test of being"substantially owned and effectively controlled" by British interests. VS is minority British owned and effectively controlled by DL. Any new aviation agreement with the EU has yet to written and Flybe to all intents and purposes only uses UK cabotage and third/fourth freedom rights so traditional owneship rules may apply. I imagine the lawyers are puzzling over this one right now.


FLYBE has NO slots at Heathrow that has ANY BOOK value at this time . Those Scottish slots are remedial competition awards and are from the IAG slot holdings are subject to substantial usage restrictions for ever.

THEY CAN NOT BE USED FOR ANY LONG HAUL ROUTE CEPTING CAIRO OR RIYADH PERIOD.

Access to Heathrow is a red herring at this time.
 
Amsterdam
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 7:47 am

This could give KLM quite some needed slots at AMS.
 
ELBOB
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 8:02 am

rutankrd wrote:
FLYBE has NO slots at Heathrow that has ANY BOOK value at this time . Those Scottish slots are remedial competition awards and are from the IAG slot holdings are subject to substantial usage restrictions for ever.

THEY CAN NOT BE USED FOR ANY LONG HAUL ROUTE CEPTING CAIRO OR RIYADH PERIOD.


Indeed, but after six seasons they can be automatically be used for any EU route and could be used for long-haul if IAG and the competition authorities agree.
 
senatorflyer
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 10:57 am

caaardiff wrote:
- Virgin Little Red operated Airbus on the domestic routes which were too big for what they needed. Flybe are already operating LHR-EDI & ABZ which could be strengthened for much needed connections that VS need through LHR, along with the recently announced NQY flights. Operated on a much more efficient aircraft to the demand that VS has.
- Secondly BE has a big presence at MAN as does VS, which could grow even further.
- It may also see a stronger return of BE in LGW feeding VS flights from there, and also flights from GLA which BE already codeshare on.
- Add into the mix DL's connections as well from various airports.


I wonder if cancelling BFS and GLA MCO flights could be an option and replacing low frequency flights with daily flights via their MAN hub?


BFS and GLA are more holiday routes for Virgin Holidays which are probably better off operated as direct flights from those Airports.

Throw into the mix a possible additional feed for KL/AF. BE already have strong links with AF codeshares through CDG and operate into AMS which would provide additional slots to feed KL. This could free up KL Cityhopper aircraft for new routes throughout Europe.

As a group project I see this as a positive for all carriers involved if they can get the route network and feed right.

What's left is the bases that provide little addition to the group of Airlines which could see cuts. BHX has it's own BE fortress if they wanted to keep that running.


Little red didn’t operate any type of aircraft. Aer Lingus was contracted to do the flying. I don’t think the A320 was too big. The arrangement with Aer Lingus was probably too expensive since that deal was hammered out almost over night.

Now circumstances have changed, Flybe might be very attractive at this point taking AF/DL/KL into consideration. Not only has Flybe Heathrow slots but also a lot of AMS slots!
 
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CarbonFibre
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 11:32 am

Image
 
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GCT64
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 11:32 am

cschleic wrote:
Could they be sold or leased to someone who would use them for domestic flights? I don't know enough about LHR slots to answer that question but even if just domestic, they must have some value.


I would say the logic goes as follows: The slots only have value if you can make profit on them; It's doubtful that anyone (possibly Flybe (cheap to run Q400s but they are rarely full and prices are lower than BA) and possibly BA (although for BA we don't know much of the domestic flying is supported by network feed from international flights) can make a profit running domestic UK flights (e.g. a subsidy is required for LHR-NQY); hence domestic only LHR slots have no or little value.
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3AWM
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 12:51 pm

I think there is a lot of potential for this deal.

Virgin is a much bigger brand in the the UK that it is an airline and it doesn't have much presence outside London.

In buying Flybe it would have operations in every region of the UK. Not only will this increase the frequently flyer base but it will also make it easier to get corporate contracts as it gives Virgin something BA doesn't have - a UK network.

I don't see them using Flybe to build up a hub but they can provide the connections to provide daily US flights from any airport with a few strategically placed services to Delta hubs.

Slot wise Flybe have a lot of AMS slots, maybe these could be sold to KLM to fund the deal or traded for LHR slots. Under the remedy agreement Flybe could add services to AMS after operating EDI/ABZ flights for a fixed number of IATA seasons the same as they have done with the Newquay flight.

As the Newquay flight will be moving to LHR this will also free up 3 daily LGW slots which VS might be able to utilise.

There is also some interesting stuff in Flybe's codeshare agreements.

I can see Aer Lingus being dropped, they won't want to feed an IAG hub.
Air India codeshare could be dropped in favour of Jet.
Emirates I can't see continuing.

Interesting times.
 
BrianDromey
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 1:13 pm

garf25 wrote:
You have to think about the difference between inbound and outbound tourism. VS will know this from their own data.

Could they shift all their outbound traffic to hubs like BHX and MAN to join mainline VS services via newly acquired turbo props?? Away from LHR? Maybe the new competition for LHR/BA, AMS/KLM, FRA/LT. Is there then a demand for inbound transfer onto local destinations??

There is life beyond LHR.


Garf, you have to understand the difference between "London" and the "UK". VS has survived on O&D traffic to LHR and a strong outbound holidays business from LGW. They are replicating that at MAN, operating to high volume popular US 'business' destinations, strong DL hubs and Virgin Holidays Markets in the Caribbean and Florida. Passengers can, and do, already connect to VS from BE domestic routes at MAN. It's not ideal that BE are in T3 and VS in T2 though.
 
azz767
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 1:40 pm

With the new terminal I think VS or DL whoever you want to credit are sensing a real opportunity at MAN, the 330 fleet plus a couple of 350’s for the higher capacity is perfect for the MAN market and once the Dreamliner issues are resolved they will have more flexibility within the airbus fleet to really have a stab at MAN. Getting SFO, BOS JFK and ATL, year round higher frequency has to be the first objective, and looking at other markets, maybe DTW DEL and others should be where they are looking to go. Using BE to feed from the regions and some places in Europe. I agree with posters above it will be interesting with bases like BHX, where they have a substantial operation but won’t be feeding anything. It would also be interesting to see their ideas on the fleet as well. The ERJ’s are very nice to fly but by all accounts expensive to operate, but it’s a bit of a project for VS/DL if it happens and one I will watch on with intrigue
 
Jetty
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 3:02 pm

3AWM wrote:
Slot wise Flybe have a lot of AMS slots, maybe these could be sold to KLM to fund the deal or traded for LHR slots.

Slots at AMS can’t be traded (as in LHR i.e.). KL could operate BE slots if they’d keep the BE code, so some kind of cooperation is certainly possible but not for a monetary compensation.
 
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DL747400
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 4:32 pm

Aside from this being a tremendous opportunity for DL/VS, I also smell an opportunity here for Airbus.

The A220 would be an ideal replacement for Flybe's large Q400 fleet. This would improve the ability for DL/VS/AF/KL to market international to domestic UK connections. There is a significant segment of the flying public who avoids anything with props.
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mullac30
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 4:41 pm

DL747400 wrote:
I smell an opportunity here for the A220 to replace Flybe's large Q400 fleet.


Wouldn't be the first time that's happened, Air Baltic are doing the same thing as A220s have better seat costs, although they have had to reduce frequencies to compensate.
 
3AWM
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 5:11 pm

I'm sure Flybe would say high frequency is a necessity of their business model, in particular for the kind of routes the Q400 runs.

There is certainly some truth to that but I think there is a bit of frequencies being driven by the need to utilise equipment - eg it might be better to concentrate on the most popular times of travel - in the morning and the evening - when higher fares can be achieved.

The Q400s run these routes all day because there is a limited number of routes they can viably operate, however the A220 is a more versatile aircraft and could run longer sectors in the middle of the day.

I think they would certainly be a good replacement for the E-Jets and maybe could be more be competitive with the kind of routes currently being run by Easyjet and Ryanair 3/4 times per week, but daily.

They could also open up some Euro destinations at LCC frequencies (2/3 per week) that are too thin for A320/737 based ops at the moment.

I still think for a lot of the routes Flybe run the Q400 is the right aircraft, much rather be flying on an A220 though.
 
jeffrey0032j
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 5:15 pm

On a side note, they could send any willing passenger on Virgin Trains if a flight gets cancelled.
 
Bhoy
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 5:33 pm

jeffrey0032j wrote:
On a side note, they could send any willing passenger on Virgin Trains if a flight gets cancelled.

Not to/from Aberdeen, Belfast, Exeter, Southampton, Newquay, Isle of Man, East Midlands, Cardiff, though...
 
mullac30
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 6:08 pm

Does anyone think that VS would improve the hard product of BE to match the VS brand, perhaps with VX style cabins on ERJs, and more included (baggage, refreshments) in the fare? The poor offering from BE was always a problem for the BE/T3 JV when competing with the full service Loganair, upgrading the offering would help them differentiate the new potential shorthaul VS offering from the penny-pinching BA.

On the subject of T3, what will happen to franchisees, could we see a VS livery JS41? Now, that would be strange...
 
ChrisKen
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 6:24 pm

BestWestern wrote:
virgin launched little red for feed which failed.

Actually, it was launched to slot sit and keep some sort of competition on those routes associated. The slots would have gone to BA otherwise.
 
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CarbonFibre
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Re: Sky News: Virgin Atlantic and Flybe in talks

Fri Nov 23, 2018 7:03 pm

Image
 
Cunard
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Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 3:57 am

The A220 looks amazing in the VS livery :-)
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8herveg
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Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 7:37 am

Out of interest, why would they order the A220, when they already have the E195? I know they’re getting rid of those in the next couple of years, but why not keep them (if they need something of this capacity) as they have the same amount of seats don’t they?
 
jomur
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Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 8:25 am

I see just about every post is saying they are going to buy Flybe but it the talks are also about closer ties with more codeshares etc.
 
factsonly
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Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 9:04 am

aemoreira1981 wrote:
This has DL/AF/KL written all over it. Through shareholding in AF/KL, DL is the majority owner of VS.

I could see BE leasing slots to KL for Cityhopper expansion, or KL could up-gauge to larger equipment into the UK including mainline, and with BE code-sharing on routes to and from AMS (at AMS, KLM could lease slots from BE to expand its own operations). The idea would be to work the BE slots and network for the benefit of VS/DL and AF/KL.


Current rules at AMS prevent airlines from 'trading' slots.
Airlines can only trade slots when flight codes already exist on a certain flight number. Example: KL and DL can swap slots where an existing DL/KL flight, becomes a KL/DL flight.

Though I agree that VS/DL/AF/KL will be after network benefits, the possibility of lowering operating cost, increasing yield, while adding marketshare in the UK (regions) must also be part of the strategic value of FlyBe.

With BE the VS/DL/AF/KL group can find network benefits on:

1. Feeding VS/DL and possibly AF/KL at LHR + MAN:
- LHR - ABZ
- LHR - EDI
- MAN - ABZ
- MAN - AMS
- MAN - BHD
- MAN - CDG
- MAN - EDI
- MAN - EXT
- MAN - GLA
- MAN - IOM
- MAN - JER
- MAN - MXP
- MAN - NQY
- MAN - SEN
- MAN - SOU

2. BE would also add unique feeder routes to DL/AF/KL:
- Doncaster - AMS 1x daily
- Doncaster - CDG 1x daily
- East Midlands - AMS 1x daily
- Exeter - AMS 2x daily
- Exeter - CDG 2x daily

3. However possible competition issues arise, so frequency/capacity rationalization is likely where BE/KL compete (Summer frequencies):
- Manchester - AMS = KL 6x daily + BE 4x daily + EZY 3x daily
- Birmingham - AMS = KL 6x daily + BE 7x daily = BE/KL creates monopoly
- Southampton - AMS = KL 2x daily + BE 4x daily = BE/KL creates monopoly

4. Existing codeshare flights AF/BE could possibly be continued without competition issues.

5. No competition issues will arise in highly competitive markets, such as:
- LCY - AMS = 9x KL + 8x BA + 1x/2x BE

6. BE would add marketshare, customer base and network strength at:
- ABZ
- BHD
- BHX
- DSA - new market AF/DL/KL
- DUB
- EDI
- EMA - new market AF/DL/KL
- EXT - new market AF/DL/KL
- GLA
- INV
- LCY
- NQY - new market AF/DL/KL
- SEN - Stobart may not be part of this deal?
- SOU

It all depends on the BE purchase price, at present it looks as if VS/DL/AF/KL could pick up some major market strength in the UK regions for little money.
 
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CARST
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Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 9:07 am

CarbonFibre wrote:
Image


Why does it say Airbus? It's a Bombardier C-Series aircraft.

CarbonFibre wrote:
Image


I think they should brand it as Virgin UK and put a fat Union Jack on it behind the name. In a swinging motion, kinda "swooshy". And then really stretch that they are still serve other markets in the UK beside London except for crazy BA which is just London Airways these days and not British Airways anymore. That would be a nice marketing stunt at least...

DobboDobbo wrote:
I think a VS-led purchase of BE offers a number of opportunities for VS and its partners, DL, KL, AF, KE.

1 - It provides an opportunity to obtain a dominant position in the UK air market, by domestic point to point and also obtain further feeder traffic into its hubs (see points 2 and 3).

2 - It may enable VS to develop a UK hub. In the immediate term, that opportunity is at MAN, but in the long term this may position the group well to obtain slots at an expanded LHR. Either way, synchronising the BE feed into VS and partners air services could be a major boost to VS's emerging operation at MAN.

3 - It should solidify KL's position for feed from the UK regions. BE already feeds KL at AMS and AF at CDG - if schedules can be synchronised this operation can be improved.

4 - will they rebrand BE as a "Virgin" brand?

This is not without its downsides - BE obviously have their challenges financially that will have to be corrected, but for a large group backed by DL it may be too tempting an opportunity to gain a foothold in a major european market.


The question is, does this purchase make sense at all? Is there money to make in the UK domestic market with the fixed cost base Virgin and FlyBe currently have?

While I said above, that I like the "marketing idea" of saying "we serve all of the UK and beyond (opposite to London Airways)", Virgin tried their luck with Virgin Red before and failed miserably. So the question is, does FlyBe offer a much lower cost base, so that this could work out now?

If not, what has changed that it should work now?
 
bennett123
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Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 9:45 am

I flew Virgin Red a couple of times from London to Edinburgh.

I was flying up on Sunday and back on Friday.

A lot of people work in London and live in Scotland and vice versa.

The prices were OK, but the LF was about 50-60%.

Clearly, something was badly wrong from the start.
 
DobboDobbo
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Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 11:57 am

CARST wrote:

DobboDobbo wrote:
I think a VS-led purchase of BE offers a number of opportunities for VS and its partners, DL, KL, AF, KE.

1 - It provides an opportunity to obtain a dominant position in the UK air market, by domestic point to point and also obtain further feeder traffic into its hubs (see points 2 and 3).

2 - It may enable VS to develop a UK hub. In the immediate term, that opportunity is at MAN, but in the long term this may position the group well to obtain slots at an expanded LHR. Either way, synchronising the BE feed into VS and partners air services could be a major boost to VS's emerging operation at MAN.

3 - It should solidify KL's position for feed from the UK regions. BE already feeds KL at AMS and AF at CDG - if schedules can be synchronised this operation can be improved.

4 - will they rebrand BE as a "Virgin" brand?

This is not without its downsides - BE obviously have their challenges financially that will have to be corrected, but for a large group backed by DL it may be too tempting an opportunity to gain a foothold in a major european market.


The question is, does this purchase make sense at all? Is there money to make in the UK domestic market with the fixed cost base Virgin and FlyBe currently have?

While I said above, that I like the "marketing idea" of saying "we serve all of the UK and beyond (opposite to London Airways)", Virgin tried their luck with Virgin Red before and failed miserably. So the question is, does FlyBe offer a much lower cost base, so that this could work out now?

If not, what has changed that it should work now?


I think that is a very good question, that VS (and presumably) DL are considering right now.

The question has so many variables, and it will be difficult for us to asess without detailed information.

My view is that BE is, relative to its tunrover, not far off being a break even business. In a good year, it may make a small profit, in a bad year it may loose money. There will obviously be "good bits" of BE's network that are more lucrative, and "bad bits" that struggle to make ends meet or loose money. From VS/DL's perspective, do the "good bits" offer strong synergies with VS/DL/KL/AF's network, and are they able to get rid of the "bad bits" at all and if so for an acceptable cost. Also, are there wider opportunities to expand and/or focus the "good bits" of BE's network to feed the wider VS/DL business (e.g. is VS/DL were to make a major capital injection - such as the speculated A220 placement above).

The other side of the coin is whether the demise/failure of BE would have a knock on effect on VS (e.g. strengthening a competetor) or what the impact would be if BE was taken over by a competetor?

Who knows, but it is potentialy an exciting move for VS, if it comes off.
 
3AWM
Posts: 100
Joined: Sat Jul 23, 2016 1:01 pm

Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 1:10 pm

CARST wrote:
CarbonFibre wrote:
Virgin tried their luck with Virgin Red before and failed miserably. So the question is, does FlyBe offer a much lower cost base, so that this could work out now?

If not, what has changed that it should work now?


I think the reason Little Red failed was they had the wrong sized aircraft for the routes. They were getting 50% LF , but BE are operating equipment with half the seats.

The routes they operated BA dominated to LHR because they had a much bigger hub on the other end than Virgin does, they also needed to maintain the frequency to be competitive.

The restrictions of the remedy agreement also stopped them from offering a wider selection of routes- they probably would have done better on routes BA were ignoring.

Those two routes also had LCC competition to London if you weren’t that bothered about the airport you were flying to.

After the agreed period the operator can offer any route, even if BE don’t make money on those routes they are bleeding a lot less cash than VS.

As with any combination there are like to be back office savings eg finance/marketing/IT etc but whether BS can make other synergies work is less certain.

I think it would work better after the AF/KLM Combination which will surely require that they have a short haul network anyway. Easier to buy a competitor than to start from scratch.
 
findingnema
Posts: 62
Joined: Sun May 06, 2007 1:14 am

Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 1:15 pm

Although I’ve always admired Virgin Atlantic for keeping BA on their toes and encouraging them to up their game, it’s always worth considering that Virgin are known for a lot of hot air.

Going back to the early 90s, there was much speculation - confirmed by Branson at the time - that they were serious about saving Dan Air and not letting it get into the hands of BA. Similarly, probably from the late 1990s onwards, there were always negotiations and offers back and forth between Virgin and Midland - and although Bishop was a shrewd and canny businessman, he also legitimately believed that Branson was undervaluing the business, so always spurned his advances.

I can’t remember which of his autobiographies it was, but two things spring to mind. One, Branson’s regret at not getting into the low-cost European market in good time to make a success of it. At the time they were worried about cannibalising the VS brand and in the end ended up with Virgin Express in Belgium. Which brings me on to my second point, Branson said a big reason for VEX’s growing pains was buying a failing business and then trying to stamp Virgin’s culture onto it. I wonder whether the group would do it again.

There are many benefits to not just VS but more broadly SkyTeam with a streamlined BE as part of the group but I wonder whether the appetite is there to perform a rebrand and top to bottom reorg.
My postings on this site are my own and don’t necessarily represent my employer’s positions, strategies or opinions
 
andymartin
Posts: 150
Joined: Thu Jun 16, 2016 3:57 pm

Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 1:15 pm

"Why does it say Airbus? It's a Bombardier C-Series aircraft."
Have you been living on the moon for the last few weeks?
 
Bhoy
Posts: 232
Joined: Tue Apr 18, 2006 1:50 pm

Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 1:42 pm

CARST wrote:
I think they should brand it as Virgin UK and put a fat Union Jack on it behind the name. In a swinging motion, kinda "swooshy". And then really stretch that they are still serve other markets in the UK beside London except for crazy BA which is just London Airways these days and not British Airways anymore. That would be a nice marketing stunt at least.

They already did; the flying lady used to carry a Virgin flag, but changed to carrying a Union Flag [nb it's only officially a Jack when flown as a triangular Jack flag on ships] maybe about twenty years ago, when the 330 was introduced and the '4 engines 4 long haul' slogan painted on some Planes became 'Britain's flag carrier' - 744/340 winglets also got the stylised Union flag at the same time.
Last edited by Bhoy on Sat Nov 24, 2018 1:45 pm, edited 1 time in total.
 
Cunard
Posts: 2072
Joined: Fri Nov 11, 2016 6:45 pm

Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 2:28 pm

8herveg wrote:
Out of interest, why would they order the A220, when they already have the E195? I know they’re getting rid of those in the next couple of years, but why not keep them (if they need something of this capacity) as they have the same amount of seats don’t they?


Bit of naive question to be totally honest as the subject of Flybe's E195s have been brought up in these forums on many occasion.

The E195s will be gone by the end of next year and Flybe only have three examples which are on very expensive leases so why on Earth would they be retained in the fleet.

If they were to be replaced in the advent of a takeover by Virgin then the A220 series would be an absolutely perfect replacement aircraft.
94 Countries, 327 Destinations Worldwide, 32 Airlines, 29 Aircraft Types, 182 Airports, 335 Flights.
 
Mullion
Posts: 19
Joined: Wed Aug 15, 2018 11:02 am

Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 3:27 pm

3AWM
Virgin has a very big following up here in Manchester 2 B744 and 4 A330 based 2019 and always has even if people used to have to
travel via London.
Why should they drop Etihad as the Etihad brand is very strong up here especially with Manchester City being backed by them and twice daily to
Abu Dhabi.
 
8herveg
Posts: 1312
Joined: Tue Aug 29, 2006 2:01 am

Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 3:28 pm

Cunard wrote:
8herveg wrote:
Out of interest, why would they order the A220, when they already have the E195? I know they’re getting rid of those in the next couple of years, but why not keep them (if they need something of this capacity) as they have the same amount of seats don’t they?


Bit of naive question to be totally honest as the subject of Flybe's E195s have been brought up in these forums on many occasion.

The E195s will be gone by the end of next year and Flybe only have three examples which are on very expensive leases so why on Earth would they be retained in the fleet.

If they were to be replaced in the advent of a takeover by Virgin then the A220 series would be an absolutely perfect replacement aircraft.


Are you always rude with all of your responses?

Sometimes people miss things hence asking questions on a FORUM.

A simple, polite answer would have been easy and appreciated.
 
User avatar
Aisak
Posts: 698
Joined: Thu Aug 11, 2005 10:56 pm

Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 6:50 pm

factsonly wrote:
1. Feeding VS/DL and possibly AF/KL at LHR + MAN:
- LHR - ABZ
- LHR - EDI
- MAN - ABZ
- MAN - AMS
- MAN - BHD
- MAN - CDG
- MAN - EDI
- MAN - EXT
- MAN - GLA
- MAN - IOM
- MAN - JER
- MAN - MXP
- MAN - NQY
- MAN - SEN
- MAN - SOU

Hopefully MAN can become a real hub. Seeing all those routes I remember bmi and its regional brand. They could have achieve a real MAN hub as they were banned to the US from LHR.

The market at both the UK and the EU-US have changed a lot.

MAN sees some DL service and has a sizeable VS base and unlike BA, this feed won’t take away Virgin’s own traffic at London.

But I’m still reluctant to see it done. Virgin Atlantic now faces several challenges without the hassle of integrating a feeder airline or run a hub operation. Is MAN even prepared for such a task? Under one roof ops and streamline ops to achieve it? Ie. Bypass security for domestic flights to intl or bypassing UK border for intl to intl...

VS is now considered a UK airline despite being owned 49% by a US entity and 31% owned by AFKLM. Let’s see how a BE integrated into VS can be “used” by DL and AFKLM at the same time while having to separate JV agreements: DLVS for UKUS and AFKLDL for EUUS
 
leghorn
Posts: 664
Joined: Sun Jan 22, 2017 9:13 am

Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 7:10 pm

while IAG may not have wanted to bid on FlyBE they might be enticed now as FlyBE falling in to a competitor's hands may direct profitable traffic away from their main bases in the UK.
Long term Virgin might be the most honest purchaser for FlyBE and keep it running most successfully but the objective for Management is to realise the highest sale price for FlyBE for shareholders who will be forced to sell their shareholding. It would be hard to argue with a higher bid from IAG or Easyjet.

Ryanair will stay out of it I think even though it is pocket money for them as they are eating huge losses on Laudamotion at the moment and it is enough of a distraction in itself already.

Disclosure: I have 89,000 shares in FlyBe bought at about 11 or 12 pence.
 
Mullion
Posts: 19
Joined: Wed Aug 15, 2018 11:02 am

Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 7:23 pm

Hope it works out for you Leghorn
 
leghorn
Posts: 664
Joined: Sun Jan 22, 2017 9:13 am

Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 7:34 pm

I hope it works out for the FlyBE staff. There is nothing sexy about their business. It is just a vital bus service in the sky which people rely on for transport and which the employees rely on for putting bread on the table. I figured at worst I'd lose half my stake as there is so much asset value in the company.
 
ELBOB
Posts: 129
Joined: Sun Jun 21, 2015 6:56 am

Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 8:18 pm

Bhoy wrote:
[ [nb it's only officially a Jack when flown as a triangular Jack flag on ships]


You're 110 years out of date. The name Union Jack was adopted in 1908 regardless of where presented or flown.

that the Union Jack should be regarded as the National flag, and it undoubtedly may be flown on land by all His Majesty's subjects.

https://api.parliament.uk/historic-hans ... union-jack
 
fcogafa
Posts: 1103
Joined: Fri May 16, 2008 4:37 pm

Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 9:57 pm

Telegraph is saying that IAG are up or it too

https://www.telegraph.co.uk/business/20 ... be-rescue/


Multiple industry sources have told The Sunday Telegraph that British Airways owner IAG is in pole position to buy Flybe, with its regional network providing a useful link into British ­Airways’ sprawling global hub at Heathrow.
 
seanpmassey
Posts: 53
Joined: Mon May 23, 2016 3:22 pm

Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 10:40 pm

fcogafa wrote:
Telegraph is saying that IAG are up or it too

https://www.telegraph.co.uk/business/20 ... be-rescue/


Multiple industry sources have told The Sunday Telegraph that British Airways owner IAG is in pole position to buy Flybe, with its regional network providing a useful link into British ­Airways’ sprawling global hub at Heathrow.


Would IAG even be allowed to buy FlyBe, or would that be seen as anti-competitive?
 
BOAC1966
Posts: 410
Joined: Sun Nov 09, 2014 6:55 pm

Re: Sky News: Virgin Atlantic and Flybe in talks

Sat Nov 24, 2018 11:26 pm

BA tried numrous time to make domestic and near Europe provincial links work! Possibly a move of a strategic nature in offering due strength of LCC over last decade but will always be a tough one in terms of decent operating ratio!
 
LHRFlyer
Posts: 1009
Joined: Sun Apr 11, 2010 12:50 pm

Re: Sky News: Virgin Atlantic and Flybe in talks

Sun Nov 25, 2018 12:27 am

I would treat Sunday newspaper stories citing "industry sources" with a heavy degree of scepticism.
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