VS Cuts Routes + Adds Routes

TC957 · Wed Sep 03, 2014 5:26 pm

Quoting b-hop (Reply 42):
Japan pullout is a total surpise

Yes indeed, just come off the NRT flight today and heard about this news just before I left. Thing is, loads were OK but yields were getting worse, the weak yen making London and the UK an expensive destination and the Japanese have largely found other places to visit these days.
The reported move to HND was never seriously going to happen owing to the costs involved. Nice idea though.
I too would have thought the 789 would be perfect to continue the NRT service with, but I guess the number crunchers at VS have tapped into their calculators and said no. Feel very sorry for the brilliant Japanese crew for loosing their jobs.

1400mph · Wed Sep 03, 2014 5:28 pm

Quoting SonomaFlyer.....

The TATL market is one of the most if not the most lucrative markets out there. LHR in particular is a money maker. VS is making smart moves by switching to markets with better yields and more consistent yields versus fighting it out in places like India.

Yes VS is putting their eggs in DL's basket but that basket is looking pretty tasty these days. It is the best run and most profitable airline in the world at the moment. DL's $400m investment in VS was a bargain and the returns should be coming in already.

......you can say that again

Kudos to DL for swinging a joint venture across the Atlantic with a carrier they own half of.

It's so cushy it almost seems illegal.

jetblue1965 · Wed Sep 03, 2014 5:50 pm

Quoting 1400mph (Reply 51):

Yes VS is putting their eggs in DL's basket but that basket is looking pretty tasty these days. It is the best run and most profitable airline in the world at the moment. DL's $400m investment in VS was a bargain and the returns should be coming in already.

VS just threw away all the goodwill and brand reputation at the non-US ports that they've built up over the years. What about during the next downtown when the Atlantic market goes cold turkey ? They would have nowhere else to deploy those big planes since they would have to be creating new markets from scratch.

And for the "returns" that DL might be enjoying from their US-LHR operations, they're forgetting how much red ink is bleeding at LittleRed.

boysteve · Wed Sep 03, 2014 6:08 pm

Quoting 8herveg (Reply 11):
How do/did they decide which metal to put on which route? Is there any gain in VS doing MAN-ATL instead of DL? Particuarly since DL have operated the route for so many years now and have probably built up quite a following of DL and Skyteam pax...

The DL 763ER on MAN-ATL have either 26 or 36 J seats. Does this mean that an LHR VS A333 will be used with J class?

dank · Wed Sep 03, 2014 6:08 pm

Quoting anstar (Reply 8):
So the increase for VS is 5 weekly LHR-SFO summer seasonal and MAN-ATL year round.

Isn't that just an add back for SFO? Though I don't think I saw it this summer. I'm not sure how they actually compete much on the SFO-London route.

jetlanta · Wed Sep 03, 2014 6:10 pm

Quoting Jetblue1965 (Reply 52):
VS just threw away all the goodwill and brand reputation at the non-US ports that they've built up over the years. What about during the next downtown when the Atlantic market goes cold turkey ? They would have nowhere else to deploy those big planes since they would have to be creating new markets from scratch.

Lets start with acknowledging the fact that you have absolutely no idea how much money Virgin is losing on the routes it is discontinuing.

Then look at Virgin's financial performance over the past several years. Those losses are being generated somewhere. We can safely assume that they aren't canceling profitable markets, so lets assume that these cancelled routes pretty much suck.

Virgin has no strategic advantage in any of the discontinued markets. There is no point in continuing to lose money in markets where the carrier has little hope of successfully competing against immunized alliances and the ME3. "Goodwill and brand reputation" aren't worth anything if you are out of business.

Virgin finally has a partner that can provide it with real route synergies, it makes complete sense that they would reengineer the network to maximize the opportunity.

anstar · Wed Sep 03, 2014 6:20 pm

Quoting deltaflyertoo (Reply 45):
I'm assuming that DL is keeping its flight that they previously announced a few months back? If not, this move would make total sense and indeed be no news item but if DL is keeping it then thats somewhat of a capacity increase for both the route in general but esp. for DL that is now the newer player on it.

Thats right... DL will do 1 flight per day and VS will go back to 2 x daily making 3 flights in the JV

Quoting SonomaFlyer (Reply 46):
The TATL market is one of the most if not the most lucrative markets out there. LHR in particular is a money maker. VS is making smart moves by switching to markets with better yields and more consistent yields versus fighting it out in places like India.

I guess with LHR-USA traffic they really don't have to compete with the likes of QR/EK/TK/EY that they do on BOM/DEL-USA as well.

Tokyo can be serviced through their partner ANA to HND a much better located airport.

Capetown can still be served with VS to JNB and their partner SAA from JNB-CPT

BOM will still be served with their partner Jet Airways and YVR will still be able to be served via USA with VS/DL.

I guess at a slot restricted airport like LHR it makes more sense using a slot to fly to SFO with great yields than it does to YVR with mostly leisure traffic... its all about maximising your assets and getting the best return.

jetblue1965 · Wed Sep 03, 2014 6:30 pm

Quoting jetlanta (Reply 55):
Lets start with acknowledging the fact that you have absolutely no idea how much money Virgin is losing on the routes it is discontinuing.

And you have the exact idea of their losses now ? How can you be so sure those were actual loss leaders instead of breaking even ? This move only helps DL but doesn't help the VS FF base in LON one bit. Combining DL and VS, there isn't a single new destination opened in this massive move (and some of them is just reshuffling deck chairs between the 2 carriers), but on the contrary, they have lost 4.

And the whole notion that BOM is a major loss leader is pure fiction. LH (neither immunized to India nor a ME3) is sending their A380 (many of which don't even have flat bed in J) there despite FRA-BOM having much much lower O&D than LHR-BOM.

A potentially smart move for VS is follow VA's lead and route passengers via AUH/EY. They can access wide swaths of South Asia, East Asia, Australia (and even Africa) with a single mid-haul flight to AUH. But since DL is in charge here, this would never happen.

TWA85 · Wed Sep 03, 2014 6:33 pm

In a few years the VS network will probably focus on Trans-Atlantic flights with a handful of beyond flights to Europe and West Asia to feed them.

SFOA380 · Wed Sep 03, 2014 6:34 pm

Quoting jetlanta (Reply 55):
Isn't that just an add back for SFO? Though I don't think I saw it this summer. I'm not sure how they actually compete much on the SFO-London route.

The second summer flight didn't operate this year. Virgin competes well here and has a strong following as does BA.

anstar · Wed Sep 03, 2014 6:41 pm

Quoting Boysteve (Reply 53):

The DL 763ER on MAN-ATL have either 26 or 36 J seats. Does this mean that an LHR VS A333 will be used with J class?

All VS A330's have J class.

Quoting dank (Reply 54):

Isn't that just an add back for SFO? Though I don't think I saw it this summer. I'm not sure how they actually compete much on the SFO-London route.

Correct... the 2nd SFO didnt operate this year and the slots were used for YVR instead. New management has decide that there is mor emoney in a second SFO than there is in a YVR service.

Quoting Jetblue1965 (Reply 57):
And the whole notion that BOM is a major loss leader is pure fiction. LH (neither immunized to India nor a ME3) is sending their A380 (many of which don't even have flat bed in J) there despite FRA-BOM having much much lower O&D than LHR-BOM.

Nothing to do with O & D... it is all about India - USA traffic... and f LH can fill that with all the UA connections then so be it.... but VS/DL have decided it makes more sense to try and sell LHR-DTW-USA traffic instead.

Quoting Jetblue1965 (Reply 57):
A potentially smart move for VS is follow VA's lead and route passengers via AUH/EY. They can access wide swaths of South Asia, East Asia, Australia (and even Africa) with a single mid-haul flight to AUH. But since DL is in charge here, this would never happen.

And VS is kind of following that strategy (funnelling theough a partner hub) by pushing all pax through DTW./ATL/JFK to the most popular destinations in the USA from JFK.

jetlanta · Wed Sep 03, 2014 6:48 pm

Quoting Jetblue1965 (Reply 57):
And you have the exact idea of their losses now ? How can you be so sure those were actual loss leaders instead of breaking even ? This move only helps DL but doesn't help the VS FF base in LON one bit. Combining DL and VS, there isn't a single new destination opened in this massive move (and some of them is just reshuffling deck chairs between the 2 carriers), but on the contrary, they have lost 4.

And the whole notion that BOM is a major loss leader is pure fiction. LH (neither immunized to India nor a ME3) is sending their A380 (many of which don't even have flat bed in J) there despite FRA-BOM having much much lower O&D than LHR-BOM.

A potentially smart move for VS is follow VA's lead and route passengers via AUH/EY. They can access wide swaths of South Asia, East Asia, Australia (and even Africa) with a single mid-haul flight to AUH. But since DL is in charge here, this would never happen.

Oh goodness. I have no idea where to begin. Virgin Atlantic is profitable on the LHR-BOM route, because Lufthansa will operate an A380 in the FRA-BOM market? Thats how you evaluate airline profitability? Through the transitive property?

And a "loss leader" is something you offer, at a loss, to entice customers to buy your other, more profitable products. I'm fairly certain that you don't understand the definition of the term.

You ask if I have an "exact idea of their losses now". No I don't. But I'm not the one claiming their move is a mistake. I can only assume that THEY know how unprofitable the routes are. I am trusting that they've decided that the actual losses and the opportunity costs associated with these markets are too big relative to the new trans-atlantic opportunities.

And who are you to decide what helps their FF base? It clearly will be bad for some people, good for others. What is bad for Virgin is losing money on makers for the sake of "brand".

[Edited 2014-09-03 11:50:06]

[Edited 2014-09-03 11:50:41]

jetblue1965 · Wed Sep 03, 2014 7:02 pm

Quoting jetlanta (Reply 61):

I didn't imply VS is just as profitable as LH to BOM, but you're suggesting they're sustaining massive losses on it, which is contrary to the performance of nearly every competitor. If VS can't do something where most can, they have deeper issues than the reshuffling of deck chairs.

If I were based out of LON, what incentive is VS giving me for my loyalty to them over BA ?

Good for who ? Delta flyers that no longer can use their system wide upgrades because VS took over the frequencies ?

LJ · Wed Sep 03, 2014 7:09 pm

Quoting slinky09 (Reply 17):

I'm surprised Shanghai wasn't mentioned, and that after announcing a move from Narita to Haneda Tokyo gets dropped completely. I also understood BOM was doing well after its return but clearly not as well ...

If the plan is to join Skyteam than keeping PVG makes more sense as Skyteam has a hub at PVG.

jetlanta · Wed Sep 03, 2014 7:17 pm

Quoting Jetblue1965 (Reply 62):
I didn't imply VS is just as profitable as LH to BOM, but you're suggesting they're sustaining massive losses on it, which is contrary to the performance of nearly every competitor. If VS can't do something where most can, they have deeper issues than the reshuffling of deck chairs.

If I were based out of LON, what incentive is VS giving me for my loyalty to them over BA ?

You don't understand the reality of VS' world. It isn't Lufthansa. It isn't BA. It dos not have a massive connecting hub of its own to flow traffic over. Virgin is a very small player in a world dominated by massive hubs, immunized alliances and the ME3. It doesn't have the luxury of building a network based on prestige and brand.

And, frankly, you have no idea if LH is profitable in the FRA-BOM market or not. LH certainly isn't profitable on the whole. Carriers are putting A380s in high density, low yield markets in order to improve financial performance, so the upgrade could easily be to lower unit costs in the face of lower yields. The Europe-India market has been mauled by the ME3. There is no particular reason to think that LH is doing well to BOM. And we know that Jet Airways is bleeding. So which carriers operating Europe-India do you know to be profitable? Where is your evidence? Or are you assuming?

If you were a VS customer based in LON and you traveled to the U.S., BOM, TYO and CPT frequently, you'd be out of luck. But if your business took you mostly to designations in the Americas, you are better off. At the end of the day, VS is trading some customers for others. They can afford to lose a few loyal customers because they now have unfettered access to Delta's customer base.

anstar · Wed Sep 03, 2014 7:24 pm

Quoting jetlanta (Reply 64):
If you were a VS customer based in LON and you traveled to the U.S., BOM, TYO and CPT frequently, you'd be out of luck.

Or you could fly VS partners ANA to Tokyo, Jet Airways to BOM or Vs to JNB connecting to partner SAA... much like alliances work... VS have their own partner network.

But I think the recent changes will benefit more passengers than they disadvantage.

[Edited 2014-09-03 12:44:11]

jetblue1965 · Wed Sep 03, 2014 7:27 pm

Quoting jetlanta (Reply 64):
And, frankly, you have no idea if LH is profitable in the FRA-BOM market or not. LH certainly isn't profitable on the whole. Carriers are putting A380s in high density, low yield markets in order to improve financial performance, so the upgrade could easily be to lower unit costs in the face of lower yields. The Europe-India market has been mauled by the ME3. There is no particular reason to think that LH is doing well to BOM. And we know that Jet Airways is bleeding. So which carriers operating Europe-India do you know to be profitable? Where is your evidence? Or are you assuming?

I'm laughing so hard here. LH first wanted to place their 748i to BOM, then now all the way to 388. LH would be pretty stupid to continuously upgauge and upgrade their BOM offering if it's already a negative performer.

And it's funny you call LH's A380 to be "high density low yield" considering they have 8 F and nearly 100 J on that whale, something 2 x VS's A340-600 combined can't offer.

Quoting jetlanta (Reply 64):
But if your business took you mostly to designations in the Americas, you are better off.

Are they offering any new destinations in the Americas? No (actually one less). All they're doing is offering more frequencies to the exact same places (DL+VS).

anstar · Wed Sep 03, 2014 7:46 pm

Quoting Jetblue1965 (Reply 66):

Are they offering any new destinations in the Americas? No (actually one less). All they're doing is offering more frequencies to the exact same places (DL+VS).

Well for VS they are offering DTW and ATL which they don't currently offer - and if that is where the money is you can't blame them for going after it.

cokepopper · Wed Sep 03, 2014 7:47 pm

Delta will be operating one of the two EWR-LHR flights.
Does anyone know which flight 7am or 7pm ? Thanks.

anstar · Wed Sep 03, 2014 7:56 pm

Quoting cokepopper (Reply 68):
Delta will be operating one of the two EWR-LHR flights.
Does anyone know which flight 7am or 7pm ? Thanks.

The details on the main site say that the daytime EWR - LHR will be retimed to an evening departure, so I guess that answers the question.

jetlanta · Wed Sep 03, 2014 8:01 pm

Quoting Jetblue1965 (Reply 66):
I'm laughing so hard here. LH first wanted to place their 748i to BOM, then now all the way to 388. LH would be pretty stupid to continuously upgauge and upgrade their BOM offering if it's already a negative performer.

You really don't understand how this works, do you? The A380 has lower unit costs than any other aircraft in the LH fleet. Provided they can fill it, and the India market has plenty of demand, the aircraft offers the opportunity for better profitability than other equipment.

Quoting Jetblue1965 (Reply 66):
Are they offering any new destinations in the Americas? No (actually one less). All they're doing is offering more frequencies to the exact same places (DL+VS).

So would you argue that AA/BA customers would be just as well-served by one daily frequency in the LHR-JFK market versus the 12 offered today?

You want breadth of destinations to be the metric. That may be true for some people, but for others it is frequency. At the end of the day, connecting with more frequency to the the Delta network allows VS to tap into thousands of flight options to hundreds of markets. It gives the carrier for more market breadth than the point-to-point services being cancelled.

OA412 · Wed Sep 03, 2014 8:20 pm

Quoting Jetblue1965 (Reply 57):
How can you be so sure those were actual loss leaders instead of breaking even ?

Airlines don't cut break even or profitable routes.

Quoting Jetblue1965 (Reply 57):
This move only helps DL but doesn't help the VS FF base in LON one bit.

Well the move is intended to bring VS back to profitability, which should be a net positive for the VS FF base in the long run.

Quoting Jetblue1965 (Reply 57):
And the whole notion that BOM is a major loss leader is pure fiction.

Based on what? Do you have numbers to back that up? And besides, as Jetlanta correctly pointed out, the correct term isn't loss leader.

Quoting Jetblue1965 (Reply 57):
LH (neither immunized to India nor a ME3) is sending their A380 (many of which don't even have flat bed in J) there despite FRA-BOM having much much lower O&D than LHR-BOM.

How does LH sending an A380 FRA-BOM translate to VS' LHR-BOM flight being a money maker? Again, airlines don't cut profitable routes.

Quoting jetlanta (Reply 61):
And a "loss leader" is something you offer, at a loss, to entice customers to buy your other, more profitable products. I'm fairly certain that you don't understand the definition of the term.

Quoting Jetblue1965 (Reply 62):
I didn't imply VS is just as profitable as LH to BOM, but you're suggesting they're sustaining massive losses on it, which is contrary to the performance of nearly every competitor.

Again, airlines don't cut profitable flying. Additionally, do you have data to back up your contention that "nearly every competitor" is profitable to BOM? Where are you getting your info?

Quoting Jetblue1965 (Reply 66):
I'm laughing so hard here. LH first wanted to place their 748i to BOM, then now all the way to 388. LH would be pretty stupid to continuously upgauge and upgrade their BOM offering if it's already a negative performer.

No they wouldn't. We don't know how it performs, but airlines often fly routes that may lose money because they are a net-positive for the overall network. Still, I fail to see the connection between LH sending an A380 to BOM and VS therefore being profitable to BOM.

Quoting avek00 (Reply 34):

Not this again.

jetblue1965 · Wed Sep 03, 2014 8:31 pm

Quoting jetlanta (Reply 70):

You really don't understand how this works, do you? The A380 has lower unit costs than any other aircraft in the LH fleet. Provided they can fill it, and the India market has plenty of demand, the aircraft offers the opportunity for better profitability than other equipment.

Lowest unit cost mean jack if they can't fill those 98 J seats. Why do you think AF/TG/CZ is struggling with their A380s ?

Again, this whole exercise benefits DL much more than VS. Only on this forum that the cancellation of 4 routes (and completely exiting 2 countries) can be spun as a pro-consumer move.

jfk777 · Wed Sep 03, 2014 8:33 pm

Quoting Prost (Reply 44):
So, what's left for VS? If it ends up being Atlanticcentric,

Interesting how Virgin is now going to Detroit and a second flight to Atlanta, this has Delta's paws All over it. Virgin is still flying to Asia via Shanghai and Hong Kong. Virgin should explore flying to Brazil, to GRU specifically.

Bongodog1964 · Wed Sep 03, 2014 8:44 pm

VS seem to have come down with a gigantic dose of reality.

They can never gain enough slots at LHR to create a comprehensive route network so whats the point in spreading the slots they do have loosely around the Globe. By concentrating on North America with DL's domestic routes for further coverage they can at least claim to specialise in one area.

LAXintl · Wed Sep 03, 2014 8:46 pm

Quoting Jetblue1965 (Reply 66):
And it's funny you call LH's A380 to be "high density low yield" considering they have 8 F and nearly 100 J on that whale

For info LH itself considers the 380 more suitable for its lower yield markets, and 748i for more premium ones.

This has been stated a few times by their management.

On the broader debate, I also doubt anyone is really making money between Europe and India based on what I hear from my client. Its a huge market, but one that is extremely price sensitive and with tons of competition.

a321luke · Wed Sep 03, 2014 8:46 pm

I almost fell over when I read they announced DTW!

Any idea on equipment? A330? B787?

MaverickM11 · Wed Sep 03, 2014 8:48 pm

Wow. VS has essentially become a DL feeder now.

Quoting jetlanta (Reply 55):
Virgin has no strategic advantage in any of the discontinued markets. There is no point in continuing to lose money in markets where the carrier has little hope of successfully competing against immunized alliances and the ME3. "Goodwill and brand reputation" aren't worth anything if you are out of business.

But what about their cheeky flair??

jetblue1965 · Wed Sep 03, 2014 8:51 pm

Quoting OA412 (Reply 71):
Airlines don't cut break even or profitable routes.

Tell that to all the QF folks, who claimed SYD-SFO was profitable when it was cut.

Quoting OA412 (Reply 71):
No they wouldn't. We don't know how it performs, but airlines often fly routes that may lose money because they are a net-positive for the overall network. Still, I fail to see the connection between LH sending an A380 to BOM and VS therefore being profitable to BOM.

Again I didn't use one to imply another, but rather, if LH (from a much lower O&D and high labor cost base) is doing well (their actions speak for themselves), why can't VS even break even on it with a superior hard product ?

And what makes BOM that much worse than DEL, which they have decided to keep ?

Quoting jfk777 (Reply 73):
this has Delta's paws All over it.

Bingo. Someone finally gets it.

starguy · Wed Sep 03, 2014 8:51 pm

Quoting jfk777 (Reply 73):

It's very unlikely that we'll see an increase in routes to non US cities as under the joint venture, Delta only profit shares on UK-US route so would not stand to benefit from UK-Brazil.
As sad as I may seem that VS have stopped flying to NRT etc after 25 years, as a business which is exposed to a huge amount of competition, they have to fly to destinations where they can fill their planes at the right price year round. DL have a financial interest in making sure this happens, there will be a great deal of promotion and selling on DLs part to fill VS flights. These announced changes are for the greater good of both airlines.

LJ · Wed Sep 03, 2014 8:58 pm

Quoting Jetblue1965 (Reply 57):
LH (neither immunized to India nor a ME3) is sending their A380 (many of which don't even have flat bed in J) there despite FRA-BOM having much much lower O&D than LHR-BOM.

LH has an alliance partner in India, VS doesn't. LH has an extensive network in India, VS doesn't. LH's home base is a very large cargo hub, VS has a smaller one. LH has less competition (this includes the ME3) than VS. These may be the reasons why LH decided to put an A380 on FRA-BOM.

Quoting jfk777 (Reply 73):
Interesting how Virgin is now going to Detroit and a second flight to Atlanta, this has Delta's paws All over it. Virgin is still flying to Asia via Shanghai and Hong Kong. Virgin should explore flying to Brazil, to GRU specifically.

Didn't they have plans for GIG?

jetblue1965 · Wed Sep 03, 2014 8:59 pm

Quoting LAXintl (Reply 75):

For info LH itself considers the 380 more suitable for its lower yield markets, and 748i for more premium ones.

This has been stated a few times by their management.

By % of premium seats on the plane, that's definitely true. Those are doing FRA-LAX and FRA-HKG afterall.

But 106 F+J seats is still a lot of them on an absolute basis that needs to be filled. if LH is 100% full in Y on that 388 but barely 40% on the upper deck, I'm not sure if that would break even.

mercure1 · Wed Sep 03, 2014 9:05 pm

Quoting LAXintl (Reply 75):
For info LH itself considers the 380 more suitable for its lower yield markets, and 748i for more premium ones.

LH has said 748 is more ideal for heavier premium markets while A380 works better on routings with more leisure traveler component.

Pretty easy to see this. 380 has 20% of capacity for premium classes, but 748 is 28% premium seats of total.

I dont know about LH profit to India, but look at other European airlines. Air France has said on the whole its losing money to India.
As part of its announcement of transformation plan they announced separate deals with Jet Airways and Etihad to increase partner help, while AFKL reduce its own service and even terminate some cities entirely (Hyderabad for example).

anstar · Wed Sep 03, 2014 9:08 pm

Quoting Jetblue1965 (Reply 72):

Again, this whole exercise benefits DL much more than VS

Really? these moves concentrae VS' flying on their "homeland: market which is the atlantic.

Quoting Jetblue1965 (Reply 72):
Only on this forum that the cancellation of 4 routes (and completely exiting 2 countries) can be spun as a pro-consumer move.

YVR was seasonal and is replaced by an increased seasonal SFO 2 nd frequency
BOM is replaced by a second LAX service ( now 2 x VS and 1 x DL daily)
CPT was seasonal and now replaced by 2nd MIA
NRT replaced by DTW

INCREASES =

LHR-SFO 2nd summer frequency
MAN-ATL

Quoting LJ (Reply 80):

LH has an alliance partner in India, VS doesn't

VS have Jet Airways in India.

These moves benefit VS... and make better use of their LHR slots by providing more yield per slot than the previous routes.

1400mph · Wed Sep 03, 2014 9:09 pm

Quoting StarGuy (Reply 79):

DL only profit shares on U.K-U.S ? DL owns half of VS !

jetblue1965 · Wed Sep 03, 2014 9:17 pm

Quoting LJ (Reply 80):
LH has an alliance partner in India, VS doesn't.

They partner with 9W (albeit outside of an "alliance"), which hubs at BOM (which they killed) not DEL (which they kept).

And LH's so called partner AI is ridiculed across the board.

Quoting LJ (Reply 80):
LH has an extensive network in India, VS doesn't.

4 (plus that Privatair thing to PNQ) vs. 2. Larger, but I won't call it "extensive".

Makes me wonder how much longer before we hear that they're chopping LHR-IAD and LHR-ORD in favor of *more* JFK (as if JFK is underserved to London).

LAXintl · Wed Sep 03, 2014 9:24 pm

Quoting Jetblue1965 (Reply 85):
Makes me wonder how much longer before we hear that they're chopping LHR-IAD and LHR-ORD in favor of *more* JFK (as if JFK is underserved to London).

Presumably being a for profit enterprise, and with limited assets, they would seek maximize return.
If that means more JFK and dropping IAD or any other market, I'd fully expect them to make such decision.

Really nothing more than the shuffle we saw with todays news.

MIflyer12 · Wed Sep 03, 2014 9:25 pm

Quoting StarGuy (Reply 79):
It's very unlikely that we'll see an increase in routes to non US cities as under the joint venture, Delta only profit shares on UK-US route so would not stand to benefit from UK-Brazil.

Of course DL benefits from non-US-UK routes: it's a 49% owner. Among numerous financial (and non-financial) metrics, DL appears to run for ROIC. If VS management could show that UK-Brazil is more lucrative to Delta (acknowledging other DL system synergies) than UK-US, DL management would support it. That's how DL justifies its investments in Aeromexico, Gol, and an oil refinery.

OA412 · Wed Sep 03, 2014 9:35 pm

Quoting Jetblue1965 (Reply 78):
Tell that to all the QF folks, who claimed SYD-SFO was profitable when it was cut.

QF would not have pulled SYD-SFO if it was profitable. Period. End of story.

Quoting Jetblue1965 (Reply 78):
Again I didn't use one to imply another, but rather, if LH (from a much lower O&D and high labor cost base) is doing well (their actions speak for themselves), why can't VS even break even on it with a superior hard product ?

And what makes BOM that much worse than DEL, which they have decided to keep ?

Again, we don't know that LH is doing well. As numerous others have pointed out, LH has specifically stated that the A380 is best suited to lower yielding destinations, which suggests that both BOM and DEL are lower yield for LH. Whether they're making money on BOM, losing it, or breaking even is something we don't know. London has much more O/D to India, but India as a whole is also a very price sensitive market. Further, LH has a huge global network that can feed its FRA-BOM flight, whereas VS has no such network. Also, VS is competing against AI, BA, and Jet for the nonstop flyer, as well as EU airlines, TK, and all the ME3 for those passengers. It's not that difficult to see why VS may be struggling in this market.

yellowtail · Wed Sep 03, 2014 9:37 pm

Quoting miaami (Reply 33):
That didn't seem to save MIA-LHR a few years back when DL operated it on their own metal.

Take the FF base that DL based the above on... + the below.....

Quoting jfk777 (Reply 35):
Virign has been in Miami for 30 years, it is their second US flight after Newark.

and you have the making of the profitable flight.

Quoting dtw2hyd (Reply 41):
I suppose DL is preempting any BA's plans to return.

It would seem so.

Quoting Jetblue1965 (Reply 52):
And for the "returns" that DL might be enjoying from their US-LHR operations, they're forgetting how much red ink is bleeding at LittleRed.

In the big scheme of things Little Red losses are peanuts.

adg737800 · Wed Sep 03, 2014 9:38 pm

This is very interesting. I think VS just entered the real world.

I'd love to know what VS's cost base is when compared to DL - anyone know? Has this played a part in these route swaps across the Atlantic? I'm just wondering...

jetblue1965 · Wed Sep 03, 2014 9:46 pm

Quoting OA412 (Reply 88):
QF would not have pulled SYD-SFO if it was profitable. Period. End of story.

Not according to half the posters on this forum. (Excluding me) you can go question their collective "wisdom"

OA412 · Wed Sep 03, 2014 9:51 pm

Quoting Jetblue1965 (Reply 91):
Not according to half the posters on this forum. (Excluding me) you can go question their collective "wisdom"

With all due respect, you're clearly just looking to reinforce your argument rather than trying to understand what people are telling you. Who cares what half the posters on this forum said if they don't work for QF and are not privy to profit and loss figures. Actions speak louder than words. Airlines do not cut profitable flying.

anstar · Wed Sep 03, 2014 9:51 pm

Quoting adg737800 (Reply 90):
This is very interesting. I think VS just entered the real world.

Yes...GAME ON.

Whatever the doomsdayers say... the VS/DL relationship is gaining traction. Watch out BA/AA

1400mph · Wed Sep 03, 2014 10:02 pm

Quoting anstar (Reply 93):

Mmm.

Remind me what's DL/VS's combined percentage slot share at LHR compared to BA/AA ?

I give VS's non TATL routes 12 months with another announcement in 6.

I'm amazed DL has had the patience to wait this long.

alfa164 · Wed Sep 03, 2014 10:04 pm

Quoting Jetblue1965 (Reply 72):
Only on this forum that the cancellation of 4 routes (and completely exiting 2 countries) can be spun as a pro-consumer move.

Nobody claimed it was "pro-consumer". It is pro-profitability for VS - and that is what VS has been lacking.

Quoting MaverickM11 (Reply 77):
But what about their cheeky flair??

I don't think any of the notoriously budget-minded Indian customers have made their flying decisions based on "cheeky flair".

Quoting Bongodog1964 (Reply 74):
VS seem to have come down with a gigantic dose of reality.

They can never gain enough slots at LHR to create a comprehensive route network so whats the point in spreading the slots they do have loosely around the Globe. By concentrating on North America with DL's domestic routes for further coverage they can at least claim to specialise in one area.

vv701 · Wed Sep 03, 2014 10:05 pm

Quoting Yellowtail (Reply 31):
And this time of year, loads are horrid everywhere.

Here in the UK the third quarter is the peak period for passenger numbers. At LHR - where all Little Red flights operate to or from - the CAA figures show that 28.3 per cent of all terminal and transit passengers using LHR did so in the third quarter. The next highest quarter was the fourth quarter with less than a quarter of all 2013 passengers at 24.2 per cent.

Quoting OA412 (Reply 92):
Airlines do not cut profitable flying.

Particularly in the period immediately in front of reporting a A$2.84 billion loss. When that happens they are looking to extract every dollar profit from wherever they can.

allegiantflyer · Wed Sep 03, 2014 10:08 pm

Quoting anstar (Reply 93):
Watch out BA/AA

In terms of AA I think AA has made it very clear that they are more interested in South America than any other continent, I mean look AA's flightaware this evening and you will see an army of AA planes heading to Brazil and just South America in general, and than you will see a few handfuls of planes headed to Europe.

[Edited 2014-09-03 15:09:06]

jetlanta · Wed Sep 03, 2014 10:12 pm

Quoting Jetblue1965 (Reply 72):
Again, this whole exercise benefits DL much more than VS. Only on this forum that the cancellation of 4 routes (and completely exiting 2 countries) can be spun as a pro-consumer move.

Its pro-VS. Not sure why you think the airline is a public utility.

Quoting Bongodog1964 (Reply 74):
VS seem to have come down with a gigantic dose of reality.

They can never gain enough slots at LHR to create a comprehensive route network so whats the point in spreading the slots they do have loosely around the Globe. By concentrating on North America with DL's domestic routes for further coverage they can at least claim to specialise in one area.

You got it. And watch them return to profitability.

Quoting LAXintl (Reply 75):
For info LH itself considers the 380 more suitable for its lower yield markets, and 748i for more premium ones.

This has been stated a few times by their management.

On the broader debate, I also doubt anyone is really making money between Europe and India based on what I hear from my client. Its a huge market, but one that is extremely price sensitive and with tons of competition.

India is a mess for legacies.

Quoting MaverickM11 (Reply 77):
But what about their cheeky flair??

Good point.

Quoting Jetblue1965 (Reply 78):
Tell that to all the QF folks, who claimed SYD-SFO was profitable when it was cut.

Quoting Jetblue1965 (Reply 91):
Not according to half the posters on this forum. (Excluding me) you can go question their collective "wisdom"

This...

Quoting OA412 (Reply 92):
With all due respect, you're clearly just looking to reinforce your argument rather than trying to understand what people are telling you. Who cares what half the posters on this forum said if they don't work for QF and are not privy to profit and loss figures. Actions speak louder than words. Airlines do not cut profitable flying.

QF is on the verge on insolvency. Does it make ANY sense that they would cancel a profitable route when they have so few that are? Explain it to me.

Sydscott · Wed Sep 03, 2014 10:20 pm

Quoting jetlanta (Reply 98):
QF is on the verge on insolvency.

QF is no-where near the verge of insolvency.

Quoting jetlanta (Reply 98):
Does it make ANY sense that they would cancel a profitable route when they have so few that are? Explain it to me.

They swapped the service from SFO to DFW to better connect in with AA's network:

http://australianaviation.com.au/201...worth-flights-drops-san-francisco/

According to Qantas at the time SFO was profitable BUT DFW offered more connectivity into AA's network and was more strategically important to QF than direct SFO service.

Who is online

Popular Searches On Airliners.net