How might DL and VS use "metal neutral" to their advantage? How might capacity be adjusted? Which new routes could be added?

Quoting slinky09 (Reply 146): VS launches short haul flying on March 31 next year.

And, how successful was BMI at that before they ceased to exist?

Quoting slinky09 (Reply 146): VS launches short haul flying on March 31 next year.

To what, two destinations?

Quoting anstar (Reply 140): Surely VS would also like to try and get some of the US-India.South Africa traffic connecting at LHR too from DL?

VS doesn't offer anything that AF/KL/DL didn't offer before, in terms of connectivity over LON. This is really about getting a good foot in the door in terms of London point of sale frequent flyers, which before such a deal, had no strong reason to choose Skyteam.

This is overwhelmingly about Delta picking up premium NYC flyers.

...and a little bit about Delta skimming premium fliers from BOS, ORD, LAX.

Despite all the cheesy repetitions of the value of frequent flier miles, the top customers between NY and London just don't give a damn about frequent flier mile schemes. EOS, MaxJet, Silverjet, OpenSkies (and others) were created because of this ultra-premium market. That is the Real prize. If you're someone who needs a big plate of options from LaGuardia and appreciates a big schedule from NY to London (and other overseas destinations JFK---), Delta is winning your business.

This is not very much about connections in London. It's about NY.

VS already has a very loyal following on BOTH sides of the Atlantic for their unique product offering, *admittedly they have struggled of late*, but letting the 100 million or so SkyMiles members connecting from the hinterlands fill up the back while Delta strengthens premium NYC business is the idea here....and oh, yeah, Virgin's UK customers suddenly get the entire Americas as an option on Delta...but all these connections are secondary to NY-LON premium spenders.

Delta intends to be #1 in New York....watch for another big move or 2 soon enough.

Pu

Quoting anstar (Reply 140): Not A330's - they have all been delivered by Airbus. They have 15 x 787's coming from 2014

Thank you!

Quoting mayor (Reply 141): When I think of an acquisition, I think of them acquiring controlling interest in the airline or the airline, themselves.

You are free to think of acquisitions any way you like. That does not change the fact that this deal involves an acquisition which, as I have clearly said already, does not entail control, but only a 49% stake.

Quoting mayor (Reply 141): When I think of VS, I think of Branson and none of this would have happened without his ok. To me, they are interchangable, hence, why I used VS instead of Sir Richard's name.

Mr. Branson and Virgin Atlantic are separate and distinct entities.

Quoting Dano1977 (Reply 147): All of the above is just speculation until the necessary regulatory approvals have been rubber stamped.

Agree. DL has only agreed to acquire shares and SQ has only agreed to sell them. A multitude of conditions need to be satisfied before the shares are actually transferred and the money is effectively paid. That said, I think it is pretty much a done deal. Little by little all these conditions will be satisfied and the deal will be closed.

VS short haul is to three destinations, ABZ, EDI and MAN. If they are serious I would expect GLA to follow, if not, I would expect these slots to go to long haul.

Quoting LDVAviation (Reply 151): And, how successful was BMI at that before they ceased to exist?

And what long haul network were BMI feeding? Others - not their own.

At least VS (like BA) will be feeding shorthaul pax onto their own long haul flights

Quoting MSPNWA (Reply 134): There could be better ways to spend $360m.

Ever thought of why DL is getting a share of VS? It is not really necessary for the JV to happen...but if this entire effort is to be profitable, then DL is netting 74% of it, while Branson 26% so maybe you should reexamine your logic...also about VS needing to be turned around...they have been spending 100m (not sure pounds or dollars) on new products and planes, which is probably the cause of the current year losses..VS is not BMI, they don't need a savior....This new JV should be working great for both parties...Maybe DL should cut VX some slack, you know, for good measure  

Quoting EddieDude (Reply 154): Mr. Branson and Virgin Atlantic are separate and distinct entities.

Perhaps you should discuss this little "detail" with SRB, himself and see what his take is on it.

Quoting anstar (Reply 156): And what long haul network were BMI feeding? Others - not their own. At least VS (like BA) will be feeding shorthaul pax onto their own long haul flights

It is unclear that the flights VS is adding will give it the traffic flows it needs to sustain a long haul network, which is currently unprofitable.

With even larger traffic flows to and from LHR, BMI was never able to build a long haul network.

BTW, that traffic was largely unprofitable for BMI. So, where are the margins that VS needs at this point going to come from?

Also, there is no comparison here between VS and BA. I suspect that BA needs fewer connecting passengers to make the whole scheme work, both because it commands higher premiums per passenger and because it long ago reduced its reliance on connecting passengers at LHR by optimizing its European and UK short haul network.

Add this to the mix. Delta will not be the kind of partner to VS that AA has been to BA. AA seeks primarily to transfer its passengers over LHR onto BA flights to Europe, India, the Middle East. It remains to be seen whether Delta with its own ambitions in those parts of the world will be so kind. I doubt they will as they already have an alliance with AF that picks up the slack in those parts of the world.

Quoting LDVAviation (Reply 159): It is unclear that the flights VS is adding will give it the traffic flows it needs to sustain a long haul network, which is currently unprofitable.

It has only been unprofitable for something like 2 or 3 years out of its 28 year hsitory.

Quoting LDVAviation (Reply 159): BMI was never able to build a long haul network.

But the BMI brand was never really established overseas... I;d argue that Virgin is a known brand in the USA, India, Japan etc

Quoting LDVAviation (Reply 159): So, where are the margins that VS needs at this point going to come from?

Presumably fromt heir long haul operations... they must know who was connecting previously and run the numbers. If the airlines was such a basket case then I seriously doubt DL would have paid such an amount of money for a 49% stake.

Well this is certainly a good move by DL and VS, offering a potential of significant benefits for both. Right now DL is not a major player on NYC-LON and this will certainly give them a chance to be, thereby increasing their total NYC portfolio.

Quoting Pu (Reply 153): This is overwhelmingly about Delta picking up premium NYC flyers. ...and a little bit about Delta skimming premium fliers from BOS, ORD, LAX. Despite all the cheesy repetitions of the value of frequent flier miles, the top customers between NY and London just don't give a damn about frequent flier mile schemes. EOS, MaxJet, Silverjet, OpenSkies (and others) were created because of this ultra-premium market. That is the Real prize. If you're someone who needs a big plate of options from LaGuardia and appreciates a big schedule from NY to London (and other overseas destinations JFK---), Delta is winning your business. This is not very much about connections in London. It's about NY. Delta intends to be #1 in New York....watch for another big move or 2 soon enough.

Nobody doubts that DL wants to be #1 in New York and has made a big push in recent years to capture more of the market. This helps them a lot to New York's most important international market, but hardly means that they are on the verge of dominating New York. If anything, they've had a chance to make some inroads while UA and AA put their respective houses in order. Look for both UA and AA to get increasingly aggressive in the future there ....

Also, while this move certainly makes them a major player on NYC-LHR, they are still going to be far beyond AA/BA in total number of seats and frequencies (I'm not saying that they need operate the same amount of flights AA/BA do to accomplish their probable goals - which is to compete on more corporate contracts and a bit more of the premium market).

Take a look at the flights operating tomorrow (13DEC12), for example...


DL/VS LHR-JFK

DL 4 LHRJFK 940A 105P 767
DL 6 LHRJFK 1250P 420P 764
DL 2 LHRJFK 550P 920P 764

VS 3 LHRJFK 920A 1220P 333
VS 45 LHRJFK 100P 405P 744
VS 9 LHRJFK 450P 800P 346
VS 25 LHRJFK 725P 1040P 333

DL/VS LHR-EWR

VS 1 LHREWR 400P 705P 744
VS 17 LHREWR 810P 1125P 346




AA/BA LHR-JFK

* AA operated flight

BA 117 LHRJFK 830A 1110A 744
BA 175 LHRJFK 1000A 1245P 744
BA 1516 LHRJFK 1045A 140P 777*
BA 1588 LHRJFK 1235P 340P 777*
BA 177 LHRJFK 110P 400P 777
BA 173 LHRJFK 225P 515P 77W
BA 1506 LHRJFK 250P 600P 777*
BA 115 LHRJFK 415P 705P 744
BA 1510 LHRJFK 505P 810P 777*
BA 179 LHRJFK 600P 900P 777
BA 1518 LHRJFK 715P 1020P 777*
BA 183 LHRJFK 800P 1040P 744

AA/BA LHR-EWR

BA 185 LHREWR 1100A 155P 777
BA 189 LHREWR 240P 540P 767
BA 187 LHREWR 525P 825P 777

Quoting Deltal1011man (Reply 130): this is why you use AF/KL as a back up plan only

That WAS my backup plan.

Quoting Deltal1011man (Reply 130): but it wont happen. Delta is trying to kiss FA butt, not piss em off.

Which is why I'm pretty sure DL isn't going to "pull something sneaky." It's not like the union vote was a landslide No

Quoting questions (Reply 150): How might DL and VS use "metal neutral" to their advantage? How might capacity be adjusted? Which new routes could be added?

Well, I am not mistaken, with the DL/AF/KL JV, DL has lower costs so they'd take some of the smaller markets like PIT and PHL to CDG (making it viable because it was more expensive on AF) while AF would make up for the multiple 767s by placing A380s (with lower costs just due to the plane, overriding the DL labor cost advantage) on routes like CDG-JFK. (I know one or both PHL/PIT-CDG may have been axed, but my logic still stands)

I could be completely wrong but I think that's how the JV is currently working, staying metal neutral (fewer A380s vs more 767s, among other aircraft) while dipping into the best of both worlds (low seat costs on A380s and lower costs in general with DL.)

Correct me if I'm wrong.

I'm sure this JV would be set up similarly

Quoting VS11 (Reply 157): also about VS needing to be turned around...they have been spending 100m (not sure pounds or dollars) on new products and planes, which is probably the cause of the current year losses..VS is not BMI, they don't need a savior....

The £80m loss was an operating loss. Capital expenditure does not get charged to the profit and loss account - it is depreciated over its useful economic life.

There's no question that Virgin needs this deal. Unless Richard Branson was prepared to bankroll the airline, it's questionable it could survive on its own in the long term whilst the rest of the industry moves to deeper co-operation through partnerships and frequent travellers choose airlines on the basis of alliance membership.

Also remember that the AA and BA joint-venture is still in its infancy and there's someway for the joint venture to develop with regard to corporate contracts and developing new routes.

Quoting LHRFlyer (Reply 164): The £80m loss was an operating loss. Capital expenditure does not get charged to the profit and loss account - it is depreciated over its useful economic life. There's no question that Virgin needs this deal. Unless Richard Branson was prepared to bankroll the airline, it's questionable it could survive on its own in the long term whilst the rest of the industry moves to deeper co-operation through partnerships and frequent travellers choose airlines on the basis of alliance membership. Also remember that the AA and BA joint-venture is still in its infancy and there's someway for the joint venture to develop with regard to corporate contracts and developing new routes.

Well, even if the loss is operating, I don't think it is so dire as everyone makes it out. Shocking as it may sound, I wouldn't be surprised if the loss is staged to "help" SQ divest at the "right" price. Yes, I think the deal works for both sides but I just don't think that not doing the deal would have been the end of VS. People here were writing VS off when LH took possession of the "crown jewel" BMI too...

Since the LHR slots that DL uses are all from AF/KL, and one of the reasons that AF/KL even gave LHR slots to DL in the first place was to get DL to form a joint venture with those two, how will this JV with VS actually work? I understand how they can split the profits/costs from the VS side, but the profits/costs from the DL side are already promised/spoken for. Will AF/KL

1) demand their slots back, since they are cut out of this new JV?
2) permit the DL/VS jv to proceed....for the time being, with a wait and see attitude?
3) demand that the current DL/AF/KL jv continue, including the LHR flights, which means that AF/DL will still get their cut on the LHR routes?

If number 3, that will be an accounting nightmare. VS gets 50%, DL gets 25%, and AF/KL get 25%. Even though AF/KL are not included in this new jv, but their slots are being used in it, so they still get their cut. ???

DL can't very will kick AF/KL out of the old jv, since DL doesn't even own any slots at LHR. (Well, maybe temporarily the two they got from AA/BA...BOS/DFW(ATL)).

Confusing.

Quoting ocracoke (Reply 166): 1) demand their slots back, since they are cut out of this new JV? 2) permit the DL/VS jv to proceed....for the time being, with a wait and see attitude? 3) demand that the current DL/AF/KL jv continue, including the LHR flights, which means that AF/DL will still get their cut on the LHR routes?

Ok....explain this to me......DL is using the two slots they got from AF/KL to fly out of LHR, BUT do the ROUTES (LHR-JFK) belong to AF/KL or is DL allowed to use the slots however they want, without them having anything to do with the JV?

Quoting mayor (Reply 167): Ok....explain this to me......DL is using the two slots they got from AF/KL to fly out of LHR, BUT do the ROUTES (LHR-JFK) belong to AF/KL or is DL allowed to use the slots however they want, without them having anything to do with the JV?

I don't know. If I were to guess (dangerous), I'd say that AF/KL have a say-so as to how and where DL were going to use their slots. It was AF that tried LHR-LAX, not DL. AF/KL didn't give DL an extra slot for that. I think all parties to the AF/KL/DL/AZ jv have a say-so as to who flies where, but again, I don't know.

Also, I think all the LHR slots that DL uses (except for the recent 2 from AA/BA) are on loan from KL/AF.

Quoting VS11 (Reply 157): .Maybe DL should cut VX some slack, you know, for good measure

VX was started by Fred Reid, an ex-Deltoid. The DOT required VX to sever ties with Reid to get an operating certificate.

Quoting cv880 (Reply 169): Quoting VS11 (Reply 157): .Maybe DL should cut VX some slack, you know, for good measure VX was started by Fred Reid, an ex-Deltoid. The DOT required VX to sever ties with Reid to get an operating certificate.

Ex LH, too. While at DL, he was one of Leo Mullin's boys, so you can make of that what you will. Actually, I believe that whoever organized VX, hired Reid away from DL.

Quoting etops1 (Reply 62): hope DL cabin crews don't get the shaft with this . They are non union . DL could easily have VA take over their LHR flts with VA crews . DL FA have no scope or protections against stuff like this .

Quoting DTWPurserBoy (Reply 67): Another union vote is in the works. This news will just add fuel to the fire. Look for IAM to represent the f/a's in the not-too-distant future. The times,they area changin'.

I see this agreement bringing additonal trans-atlantic flights to LHR to enhance connections from there. I don't see what DL crews would have to fear.

Quoting ocracoke (Reply 168): I'd say that AF/KL have a say-so as to how and where DL were going to use their slots.

It's a JV. AF/KL have a say in all of the operations covered under the scope of the JV. The slots are besides the point. I mean, that's the whole point of the agreement between the 3 airlines. They plan routing, capacity and who will operate. That's why when a route switches from one airline to the other it doesn't matter.

Delta have said AF/KL supported their effort to acquire their stake in VS. The end goal is probably to roll VS into the existing JV.

Delta and AF/KL's cooperation is long and deep. Thinking AF/KL has somehow been blindsided by this is odd.

Quoting mayor (Reply 167): is DL allowed to use the slots however they want, without them having anything to do with the JV?

This is metal neutral. It really does not matter if DL uses its planes or if AF, KL or AZ use their planes. Any flights operated by any one of those four carriers involving LHR as one end and the U.S., Canada and Mexico on the other end are to be considered joint venture flights. Hence why everyone is curious as to how the DL - AF/KL - AZ joint venture will be amended to carve out North America - United Kingdom flights or to accommodate the interests of both the current joint venture partners and of VS.

Quoting EddieDude (Reply 173): Quoting mayor (Reply 167): is DL allowed to use the slots however they want, without them having anything to do with the JV? This is metal neutral. It really does not matter if DL uses its planes or if AF, KL or AZ use their planes. Any flights operated by any one of those four carriers involving LHR as one end and the U.S., Canada and Mexico on the other end are to be considered joint venture flights. Hence why everyone is curious as to how the DL - AF/KL - AZ joint venture will be amended to carve out North America - United Kingdom flights or to accommodate the interests of both the current joint venture partners and of VS.

The reason I wondered is that AF/KL & AZ do not fly LHR to the U.S. Since they do not, why would the JV apply to this route? I'm talking of the existing JV, not an amended one or a new one.

The JV is for all transatlantic flying by all of the partners.

The current DL - AF-KL, AZ Joint Venture applies to all their flights between North America and Europe.

Quoting EddieDude (Reply 176): The current DL - AF-KL, AZ Joint Venture applies to all their flights between North America and Europe.

and AFAIK India as well....

Will be interesting if the DL-VS joint venture will also include India.

Quoting LJ (Reply 177): and AFAIK India as well.... Will be interesting if the DL-VS joint venture will also include India.

Good point. Questions: Is DL still flying to India from AMS? Could VS launch more LHR-India flights in cooperation with DL?

The more and more I think about it, it is in the best interest of all the parties involved to make VS part of the existing DL-AF-KL-AZ JV.

Quoting EddieDude (Reply 178): Good point. Questions: Is DL still flying to India from AMS? Could VS launch more LHR-India flights in cooperation with DL?

Yes, DL operates AMS-BOM. However, I doubt VS will increase India flying as LHR - India is already well served and probably not as lucrative as other routes.

One question I have could DL and VS have another JV from LHR-NRT? Since VS code share with ANA they could grow there too I'm shure DL can find some good slots for VS to use.

Whilst it's good that VS are pursuing expansion opportunities, together with the stake sale, out of all carriers I get nervous when I hear it's DL. I'm more nervous when I hear they get seats on the board at VS. I think i'll be happy if the carriers remain very separate in identity and operationally but the second DL get their dirty hands on the VS marketing, strategy and vision then I suspect it could be a downhill spiral.

Whilst DL have been possibly the most backward carrrier historically when it comes to innovation, trailblazing and leading, I do commend their recent efforts to try and improve themselves on transatlantic routes and it all helps with competition, which is healthy.

Quoting etops1 (Reply 62): I hope DL cabin crews don't get the shaft with this . They are non union . DL could easily have VA take over their LHR flts with VA crews

Why would Delta want to do this since all expenses and profits are split evenly?What would they gain?

Quoting LX138 (Reply 181): Whilst it's good that VS are pursuing expansion opportunities, together with the stake sale, out of all carriers I get nervous when I hear it's DL. I'm more nervous when I hear they get seats on the board at VS. I think i'll be happy if the carriers remain very separate in identity and operationally but the second DL get their dirty hands on the VS marketing, strategy and vision then I suspect it could be a downhill spiral.

And, WHAT would you be basing this on?

Quoting LX138 (Reply 181): Whilst DL have been possibly the most backward carrrier historically when it comes to innovation, trailblazing and leading, I do commend their recent efforts to try and improve themselves on transatlantic routes and it all helps with competition, which is healthy.

Most of us would just call this conservative. Again, what are you basing this assertion, on? Think about this.....when I hired on, DL was the smallest of the majors, almost a regional carrier (old definition). Now, they're second in the world? They didn't get that way by buying flashy new planes when everyone else was, when they weren't needed. However, they HAVE been more innovative in the last 10 years than I've ever seen them. I would say that the refinery deal is trailblazing or innovative. Also, the deal to lease the 88 717s from WN and get them to pay for the changes in the a/c before delivery is the same. Neither of these things are directly connected to the transatlantic operation.



Either your observations are based on what you see on A.net, mostly from DL bashing threads, or from information gotten from afar, which was probably spurious to begin with. In either case, I would bet that most of what you got was wrong or misinformed.

Quoting LX138 (Reply 181): Whilst it's good that VS are pursuing expansion opportunities, together with the stake sale, out of all carriers I get nervous when I hear it's DL. I'm more nervous when I hear they get seats on the board at VS. I think i'll be happy if the carriers remain very separate in identity and operationally but the second DL get their dirty hands on the VS marketing, strategy and vision then I suspect it could be a downhill spiral. Whilst DL have been possibly the most backward carrrier historically when it comes to innovation, trailblazing and leading, I do commend their recent efforts to try and improve themselves on transatlantic routes and it all helps with competition, which is healthy.

You clearly have an ancient idea of what Delta is about. In fact, most Americans would argue precisely the opposite of what you have here. Of the U.S. legacy carriers, Delta has been by far the most innovative and forward thinking over the past several years. From a corporate strategy, financial and product point of view, Delta is certainly the leading carrier in North America at the moment.

I especially have no idea where THIS statement comes from:

Quoting LX138 (Reply 181): but the second DL get their dirty hands on the VS marketing, strategy and vision then I suspect it could be a downhill spiral.

Quoting mayor (Reply 185): I especially have no idea where THIS statement comes from:

I guess if his view is based on the Delta of the 1990s, I could understand. But certainly no the Richard Anderson-led, post-merger Delta. Quite the opposite.

Quoting BD338 (Reply 109): Connections from LHR - are limited to UK destinations only. Per the fact sheet on the DL Newsroom site. Connections to european destinations are handled via AMS and CDG. This deal is all about DL access to LHR and then feeding to/from their US network. Be interesting to see how integrated they become. As a Y passenger with lots of Skymiles, I will be able to take advantage of the better (IMHO) Y product on VS and VA across both oceans on both sides of the USA

I am not against flying through LHR. I know I am in the minority here but when I do fly on business, I don't really have a preference of whom I fly. If I need to get somewhere, I just get there. To me, the airlines are not interested in my business or they would fly the polar route from HNL to LHR. I use to like to fly with AA mainly because they use to be an airline that seemed to be able to get me from HNL- England the fastest without having to fly through NYC. I could connect through DFW quite nicely and on the way back, I would book into the Hyatt and spend the night. Awake refreshed and continue on home.

Now I use DL more because I can fly back through DTW and spend a couple of days with my family in YXU. Although if again I had my way, I would love to be able to connect once and get back home with minimal connection time.

Quoting LX138 (Reply 181): I get nervous when I hear it's DL. I'm more nervous when I hear they get seats on the board at VS. I think i'll be happy if the carriers remain very separate in identity and operationally but the second DL get their dirty hands on the VS marketing, strategy and vision then I suspect it could be a downhill spiral.

Nervous? Why? Dirty hands? PLEASE, explain THAT one!

Quoting LX138 (Reply 181): Whilst DL have been possibly the most backward carrrier historically when it comes to innovation, trailblazing and leading

Where in creation did you dig THAT up from? FYI...DL has their own refinery and were the first with fleet-wide WiFi. What other carrier makes their own JetA? LOL (Gulf carriers excepted:D)

You've thrown a LOT of mud, how about some rationality?

Quoting LX138 (Reply 181): Whilst DL have been possibly the most backward carrrier historically when it comes to innovation, trailblazing and leading

Have you been under a rock the past 4 years? They made some mistakes in the past, but I cannot in the life of me get what you're talking about. Even DL critics have been mostly positive to the direction DL is going. Can't deny I have a DL bias, but I would love you see how you back this up

Quoting N62NA (Reply 122): I'm not so sure that would work too well at JFK and EWR as DL really doesn't have such an extensive domestic network out of those (though they do have more out of JFK than EWR).

I think DL realizes that they want to be top dog in NYC and in order to capitalize on the catchement area, they need to include some routes out of EWR. EWR-AMS was always solid for NW and obviously a DL staple with the 763. The recent press release to have EWR-CDG with a newly reconfigured 767 speaks volumes as to how they want to protect the former AF route in a JV environment. It wouldn't surprise me that while DL might have a moderate spoke presence at EWR, they want to tap into the JV markets that they can effectively compete again UA in. Hence why I do believe it's only a matter of time before DL starts operating EWR-LHR and seasonal EWR-FCO.

The most likely new route is SEA-LHR. I was surprised to see that on AS.com you cannot buy a London ticket via code share. I think DTW gets 2x. I think EWR goes away. I think they have to consider ending SFO, particularly if VX continues to falter.