Australian Aviation Thread Part 140

SQ22 · Mon May 02, 2016 5:14 pm

Please post your updates and continue your discussion here.

Previous thread:

Australian Aviation Thread Part 139 (by qf789 Apr 1 2016 in Civil Aviation)

RyanairGuru · Mon May 02, 2016 8:26 pm

Responding quickly to the Virgin results, I was most alarmed by Borghetti's comments. It wasn't so much what he said, but how he said it with a positive spin, a salesman's smile, and an everything will be great demeanour. To me it really seemed as though he didn't understand the depths of the issues facing the company. It's probably a facade but that is still a concern in itself as he isn't been honest with the market.

He went to great lengths to say that the company's underlying performance had improved, and that the bigger loss was due to one time costs. Having one time costs is understandable, but the fact that the company is still making an underlying loss is a real concern even if it is slightly better than last year. Fuel dipped below $30/barrel in the last quarter, the capacity war is long since over and capacity from all operators was flat, and Qantas is on track to deliver a thumping profit. VA should not be making an underlying loss in this environment. If they can't make money in a time of low fuel prices and capacity discipline then they will probably never be profitable.

mariner · Mon May 02, 2016 9:42 pm

Quoting RyanairGuru (Reply 1):
Responding quickly to the Virgin results, I was most alarmed by Borghetti's comments. It wasn't so much what he said, but how he said it with a positive spin, a salesman's smile, and an everything will be great demeanour.

But he's always been jam tomorrow.

The losses are always someone else's fault - the restructuring or the economy or price of fuel or Qantas being nasty by not willingly giving up market share. He has burned through hundreds of millions of other people's dollars in his quest to prove that he's the CEO the Qantas board should have chosen.

What is shocking to me is that JB so seldom gets called on it and that when he does, as Luxon did, the rest of the BOD - and the new Chair - closes ranks around him.

And I keep coming back to the same question - if (LCC) Virgin Blue was not the answer, why is (LCC) Tiger now the engine of growth?

mariner

allrite · Mon May 02, 2016 10:18 pm

Quote:
"While we pitch our new business class at halfway between business and first, premium economy will be halfway between economy and business but certainly closer to business class," Borghetti told Australian Business Traveller at the launch of airline's new business class.

ABT

Borghetti's glass half full nature is obviously quite full.

qf2220 · Mon May 02, 2016 10:43 pm

Quoting RyanairGuru (Reply 1):
It's probably a facade but that is still a concern in itself as he isn't been honest with the market

You could almost say it was exactly the same sort of view he held when he was leading QA, ie at the time when there were 4 744s bleeding cash to London and back. Its like there is a 'build it and they will come' mentality, but they don't ever come.

allrite · Mon May 02, 2016 11:06 pm

Quoting RyanairGuru (Reply 1):
Fuel dipped below $30/barrel in the last quarter, the capacity war is long since over and capacity from all operators was flat, and Qantas is on track to deliver a thumping profit. VA should not be making an underlying loss in this environment. If they can't make money in a time of low fuel prices and capacity discipline then they will probably never be profitable.

If I understand correctly, VA bet big on the resources market. Their later acquisitions and routes have been structured around servicing the mines and miners. They haven't had the flexibility to redeploy their assets into different markets. Qantas has also been impacted by the mining downturn, but as a long term national/international airline they have a much broader focus. The A330's are an example. There are plenty of places for them to deploy them other than on the PER runs.

Quoting mariner (Reply 2):
And I keep coming back to the same question - if (LCC) Virgin Blue was not the answer, why is (LCC) Tiger now the engine of growth?

Because tiger were the one arm not focused on resources.

Airvan00 · Mon May 02, 2016 11:23 pm

In the last thread QF2220 asked a question about his aircrafts track on landing at Sydney. A few others chipped in with helpful suggestions.
On thing to consider is what if the time that his aircraft landed was the earliest possible time (due to other traffic and his slot time). Any track shortening would have to be absorbed somehow to delay the aircraft to its available time.
For example have a look at FR24 and QF9 arriving into DXB this morning. It still has 4 hours to go and is arriving from the southwest. DXB is landing aircraft on the SW to NW runway. Will QF9 go straight in? Unlikely. We don't know it's slot time. The captain might, and may have adjusted his ground speed to meet it. It's a almost 14hr flight today. Most likely what will happen is that the aircraft will fly a large S, it will join all the other south west arrivals, then depending on the landing sequence it will turn 180 and join the European arrivals in its landing order before turning 180 again and joining its final approach.

IndianicWorld · Mon May 02, 2016 11:39 pm

Quoting mariner (Reply 2):
And I keep coming back to the same question - if (LCC) Virgin Blue was not the answer, why is (LCC) Tiger now the engine of growth?

VA has a product that tried to go upmarket but still does not command the premium to go with the increased cost base.

DJ tried to be everything to everyone at one stage and did not really find its market position, but TT is unashamedly a ULCC, with a cost base that offers a lot of advanmtages.

If VA and TT can find a better balance, then they will likely have less pressure to contend with with the bottom line. The product and cost base will ultimately be more in line with customer expectations in each market sector.

Quoting allrite (Reply 5):
he A330's are an example. There are plenty of places for them to deploy them other than on the PER runs.

Ideally VA should be finding ways to maximise its A330 fleet, but whether or not it is shaeholder pressure or not, it really hasn't managed to find a way to achieve that yet.

The move to add weekend flights to NAN with the A330 is a start but more could likely be done.

mariner · Tue May 03, 2016 12:36 am

Quoting IndianicWorld (Reply 7):
DJ tried to be everything to everyone at one stage and did not really find its market position, but TT is unashamedly a ULCC, with a cost base that offers a lot of advanmtages.

Even so, Virgin Blue was more profitable than Virgin Australia has ever been, reinforcing that the money is in LCC.

mariner

DeltaB717 · Tue May 03, 2016 1:05 am

Quoting mariner (Reply 8):
Quoting IndianicWorld (Reply 7):DJ tried to be everything to everyone at one stage and did not really find its market position, but TT is unashamedly a ULCC, with a cost base that offers a lot of advanmtages.
Even so, Virgin Blue was more profitable than Virgin Australia has ever been, reinforcing that the money is in LCC.

I don't think it's so much a case of the money being in LCC. I think it's more to do with efforts to pull pseudo-LCC DJ apart and put it back together as high-end VA not really working - as others have already said, the consistency of product, both hard and soft, has never been there and that lack of consistency at VA keeps QF as the more attractive proposition for the higher yielding business travellers and frequent flyers. VA may have some high points which outdo QF here and there, but QF still has the "you know what you're getting" factor.

Quoting Airvan00 (Reply 6):

What you're suggesting is not done as close to an airport as Liverpool is to SYD. I've just looked at the current STARs for SYD and there are two (RIVET TWO from the south and west, BOREE SIX from the north) which converge at a point just to the southwest of the field. The RIVET TWO arrival begins at a point roughly near Liverpool before making a right turn to track through the point of convergence. Why this particular point of convergence, I don't know, but I assume it provides the greatest degree of safety and efficiency for sequencing arrivals from north, west and south onto 34L. As I mentioned in the previous thread, I've been on flights which have flown RIVET many, many times over the past several years, it's not a new thing.

IndianicWorld · Tue May 03, 2016 1:56 am

Quoting mariner (Reply 8):
Even so, Virgin Blue was more profitable than Virgin Australia has ever been, reinforcing that the money is in LCC.

Not disagreeing with you there, although there were apparently issues developing prior to JB taking over which did still need to be addressed (ie. yield management, cost base, increased JQ competition).

Quoting DeltaB717 (Reply 9):
I don't think it's so much a case of the money being in LCC. I think it's more to do with efforts to pull pseudo-LCC DJ apart and put it back together as high-end VA not really working - as others have already said, the consistency of product, both hard and soft, has never been there and that lack of consistency at VA keeps QF as the more attractive proposition for the higher yielding business travellers and frequent flyers. VA may have some high points which outdo QF here and there, but QF still has the "you know what you're getting" factor.

Fully agree there too as it was a point I made in a previous post.

The biggest issue now is how it can find a cost base that works across its business, making sure it targets its premium product in market sectors it can gain the required yield gain via VA from and cover the rest with the appropriate vehicle (TT).

I do tend to think it needs a new CEO to pull that off though as JB is likely not best placed to try and admit errors in his strategy so far.

xiaotung · Tue May 03, 2016 2:59 am

Quoting IndianicWorld (Reply 10):
I do tend to think it needs a new CEO to pull that off though as JB is likely not best placed to try and admit errors in his strategy so far.

At this point I tend to agree. He himself once said a CEO should have a shelf life of what 6, 7 years. If his entire tenure can't see his strategy through, his strategy must be wrong.

I think working with different partners who have conflicting interests ultimately creates more problems than they are worth. I still think they would have received far more support and more chance of profitability if they joined Star Alliance. Rob Fyfe invited him to a Star board meeting a few years ago. Did JB's ego get in the way?

IndianicWorld · Tue May 03, 2016 3:37 am

Quoting xiaotung (Reply 11):
Rob Fyfe invited him to a Star board meeting a few years ago. Did JB's ego get in the way?

I think it may have also had to play the airline politics game on that one.

With partnerships DL (Skyteam), SQ and NZ (Star) and EY (Etihad Partners), with the latter 3 being equity partners in VA, it may have had its own issues to deal with there keeping everytone happy.

timtam · Tue May 03, 2016 3:48 am

Quoting mariner (Reply 2):
But he's always been jam tomorrow.

The losses are always someone else's fault - the restructuring or the economy or price of fuel or Qantas being nasty by not willingly giving up market share. He has burned through hundreds of millions of other people's dollars in his quest to prove that he's the CEO the Qantas board should have chosen.

What is shocking to me is that JB so seldom gets called on it and that when he does, as Luxon did, the rest of the BOD - and the new Chair - closes ranks around him.

And I keep coming back to the same question - if (LCC) Virgin Blue was not the answer, why is (LCC) Tiger now the engine of growth?

JB's strategy has been fundamentally flawed right from the beginning.

VA operate in an oligopoly market and there are business strategies for maximising profits in oligopoly markets.

JB has overseen the destruction of significant value with the business being pretty much cashflow negative for the whole time he has been there. He hasnt returned a brass razoo to shareholders in his time at VA.

Some of the shareholders highest priorities are not necessarily about generating a direct financial return from VA. They have different objectives. This might be what is keeping him in his job because in any other company he would have been long gone.

CXfirst · Tue May 03, 2016 4:47 am

Qatar Airways is currently inbound to ADL.

Marks the introduction of both QR to ADL and the first scheduled A350 to Australia!

Operated today by A7-ALH

http://www.flightradar24.com/data/aircraft/a7-alh/#9973dc3

-CXfirst

IndianicWorld · Tue May 03, 2016 6:10 am

Quoting CXfirst (Reply 14):
Qatar Airways is currently inbound to ADL.

Will be interesting to see how this route performs.

It has been hard work from the last update I had a few weeks ago but we will see.

travelhound · Tue May 03, 2016 6:47 am

Quoting timtam (Reply 13):
JB's strategy has been fundamentally flawed right from the beginning.

You might be right, but SIA, Etihad and ANZ all brought into VA well knowing how VA were positioning themselves in the market place.

As I said above, where VA and JB were once eating QF's lunch, QF now control the tuck shop.

I'd suggest the QANTAS grounding was such a large disrupt-er, VA's strategy was nullified. Time will tell

qf2220 · Tue May 03, 2016 7:12 am

Quoting Airvan00 (Reply 6):

That is quite a valid reason for a flight to make an adjustment to its path. Looking through flightaware though, it seems to be a path though that they fly every day.

Managing the ongoing slots and flight times etc would be a follow on problem and not something that should limit a flight route though to reduce the cost of flying the route.

Quoting travelhound (Reply 16):
I'd suggest the QANTAS grounding was such a large disrupt-er

QF disrupted itself, you are saying?!

RyanairGuru · Tue May 03, 2016 10:25 am

Quoting allrite (Reply 5):
If I understand correctly, VA bet big on the resources market. Their later acquisitions and routes have been structured around servicing the mines and miners

I agree that the slowdown in the resources sector is going to impact their earnings, but IMHO it is nothing more than a convenient excuse to explain their underlying loss. Writing down assets, such as the three ATR-72s, on a one-time basis is what it is, but the fact that Virgin isn't breaking even flying planes around is still a cause for concern.

As you said, Qantas was also very exposed to their resources sector, having acquired Network so they could play a larger role in the RPT market and they also had a plethora of Qantas-branded scheduled services to places in Queensland and Western Australia that I can barely pronounce, let alone find on a map.

While Qantas do of course have a much broader network to move assets around, I think that at the most fundamental level the reason that Qantas are doing much better right now is that they are enjoying higher yields on their core network between the capital cities. And this is why I find Borghetti blaming the resources sector disingenuous, it is a side show to deflect attention from the inherent weakness of Virgin's core network. They are loosing passengers on the bottom end to JQ but not poaching enough, or at least not at high enough yield, on the top end. These issues are intrinsic to Virgin Australia's model. He can trot out as many different excuses as he likes, but without addressing their yield disadvantage on the core capital cities routes they are never going to address their underlying revenue problem.

Quoting DeltaB717 (Reply 9):
the consistency of product, both hard and soft, has never been there and that lack of consistency at VA keeps QF as the more attractive proposition for the higher yielding business travellers and frequent flyers

I think that part of the problem is that Virgin got stuck half way to becoming "premium". Their lounges, while generally "fresher" than the QantasClubs, have inferior products and services. The coffee is better, that's it. For example Qantas have much more plentiful food choices including hot options. Virgin now include catering on all fares, but give you a cookie while Qantas is serving hot meals. They offer "happy hour" drinks, but you better hope that you're not on a 19:05 flight otherwise that beer will set you back $8. IMHO the fundamentals are sort off there, but they are still slightly tinged by an LCC mindset.

I think that this goes back to them trying to please everyone, not wanting to alienate more of the market to JQ with the higher fares than a proper full service model would necessitate while trying to provide a high cost full service model, and ultimately therefore pleasing nobody.

Quoting allrite (Reply 3):
While we pitch our new business class at halfway between business and first, premium economy will be halfway between economy and business but certainly closer to business class

I had to laugh at this. Their business class product is pretty decent, but their premium economy is the weakest in the region. Both Air New Zealand and Qantas run rings around them in premium economy IMHO.

TN486 · Tue May 03, 2016 11:56 am

Quoting travelhound (Reply 16):
I'd suggest the QANTAS grounding was such a large disrupt-er, VA's strategy was nullified. Time will tell

Quoting QF2220 (Reply 17):
F disrupted itself, you are saying?!

my reading of "disrupter" means the QF grounding nullified the momentum of VA. VA were riding a wave of customers discontent to QF's schedules as a result of the unions tactics with QF "The bake em slowly campaign". I suspect VA were loving every minute of that union action, then came the QF grounding. The resultant actions at the highest levels of government put paid to the Golden Goose for VA.

allrite · Tue May 03, 2016 12:38 pm

Quoting RyanairGuru (Reply 18):
I agree that the slowdown in the resources sector is going to impact their earnings, but IMHO it is nothing more than a convenient excuse to explain their underlying loss. Writing down assets, such as the three ATR-72s, on a one-time basis is what it is, but the fact that Virgin isn't breaking even flying planes around is still a cause for concern.

As you said, Qantas was also very exposed to their resources sector, having acquired Network so they could play a larger role in the RPT market and they also had a plethora of Qantas-branded scheduled services to places in Queensland and Western Australia that I can barely pronounce, let alone find on a map.

While Qantas do of course have a much broader network to move assets around, I think that at the most fundamental level the reason that Qantas are doing much better right now is that they are enjoying higher yields on their core network between the capital cities. And this is why I find Borghetti blaming the resources sector disingenuous, it is a side show to deflect attention from the inherent weakness of Virgin's core network.

VA are relative newcomers to regional services through VARA, whereas Qantas, through the Qantaslink umbrella, have been doing it since before the minerals boom. The assets they've added, like Network, have built upon those existing services and assets. They've also been built up using older aircraft. So I think they've seen the resources driven business as just one part of their greater operations.

For Virgin it's been seen as a core driver of their recent growth. I would not be surprised if some of the move upmarket was done with a belief that cashed up miners and their employers would use the lounges and the business class seats, would stick with VA due to connections, contracts and points.

But if this has indeed been VA's strategy then Borghetti is both right and wrong to blame the resource sector slowdown. Wrong, as you say, because it's VA and Borghetti's fault for pursuing too narrow a strategy.

Quoting RyanairGuru (Reply 18):
I think that this goes back to them trying to please everyone, not wanting to alienate more of the market to JQ with the higher fares than a proper full service model would necessitate while trying to provide a high cost full service model, and ultimately therefore pleasing nobody.

They've also become so close to Qantas that people are saying they might as well fly Qantas, especially if the premium is small enough. As an example, they used to fly direct SYD-ROK with a jet at least once a day (so did Qantas a long time ago), now it's via BNE and some flights are on the ATRs. QF has the same routes, with Q400s and 717s. So now my family just chooses whoever is cheapest or most convenient on that particular day, rather than specifically choosing the VA jet.

Obviously this must make sense from a cost perspective, but if VA can't offer something compellingly different to QF then they, and their owners, will just have to settle for moderate and uninspiring performance.

One thing working in VA's favour is their lack of shares available for trading on the open market. With the duopoly of Coles/Woolworths or the four big banks, traders and analysts seem to get upset if one outperforms another and thus they end up following (or attempting to follow) the same strategies for better or for worse.

[Edited 2016-05-03 05:57:20]

VapourTrails · Wed May 04, 2016 2:23 am

Can't see that this has been mentioned yet.. I for one will be looking forward to seeing it from the international traveller perspective in coming years, or sooner, hearing about it from others. I am really impressed with the new terminal - could have more choice of places to eat though, but it is nowhere near cluttered, for the perceived lack of eateries. Striking a balance perhaps.

My other little criticism, and I am not alone in saying this, is the wall space in the current baggage claim area could have been made more of a tourism use of - it had, or still has, a defence theme to it. Maybe there is a valid reason for this.

First look: Australia’s new international airport ‘will be the best in the country’, April 28, 2016.
http://www.news.com.au/travel/travel...y/d71be134e9b0e22d7a06a8b2e0e97bfd

THE next gateway to Australia is “breaking the rules” by giving everyone access to airline club lounge standard facilities.

Canberra Airport has unveiled it new international departures and arrivals hall designs as it prepares to welcome its first overseas flights in September, claiming it will be the best international terminal in Australia.

Canberra Airport managing director Stephen Byron said the design was more akin to the quality and standard expected from airline club lounges than an airport waiting area.

“We are breaking the rules here. All our customers will be treated as club lounge members with the best of design, furnishings and amenities in the general public areas,” he said.

“We have delivered the best domestic terminal facility in the country, and will deliver the best international terminal to match it.”

The departure lounge will feature state-of-the-art business and media lounges, private meeting rooms, bar and cafe dining area, duty-free shopping, and seating and meeting options ranging from formal business spaces to relaxed social and private spaces.

Folding ceiling panels and skylights aim to create a “generous, contemporary and light-filled space” that builds on the existing terminal’s main hall.

Singapore Airlines will begin flights into Canberra, the capital’s first international route, on September 21.

Bluebird191 · Wed May 04, 2016 2:36 am

Quoting VapourTrails (Reply 21):
Canberra Airport has unveiled it new international departures and arrivals hall designs as it prepares to welcome its first overseas flights in September, claiming it will be the best international terminal in Australia.

Am I missing something or did CBR previously have international flights from FJ to NAN a few years ago that flopped? Another case of poor journalism and a lack of research - technically is the second (or maybe more...) international flight into CBR

bbbb · Wed May 04, 2016 2:57 am

Quoting Bluebird191 (Reply 22):

Am I missing something or did CBR previously have international flights from FJ to NAN a few years ago that flopped? Another case of poor journalism and a lack of research - technically is the second (or maybe more...) international flight into CBR

FJ did, briefly, in 2004. Worth noting CBR airport has been referring to the service as the "first international" flight in its press releases as well, though.

Bluebird191 · Wed May 04, 2016 3:04 am

Quoting bbbb (Reply 23):
Worth noting CBR airport has been referring to the service as the "first international" flight in its press releases as well, though.

Some staff, including management, must have short memories. Surely they'd know and give correct info....

kiwiandrew · Wed May 04, 2016 3:08 am

Quoting Bluebird191 (Reply 24):
Some staff, including management, must have short memories. Surely they'd know and give correct info..

It's not really much different to the way airlines drop a destination , then if they later reintroduce the same destination it becomes 'new' with no mention that they previously dropped it.

allrite · Wed May 04, 2016 3:15 am

Quoting VapourTrails (Reply 21):
Can't see that this has been mentioned yet.. I for one will be looking forward to seeing it from the international traveller perspective in coming years, or sooner, hearing about it from others. I am really impressed with the new terminal - could have more choice of places to eat though, but it is nowhere near cluttered, for the perceived lack of eateries. Striking a balance perhaps.

Guessing that it will be like Gold Coast Airport where you go through domestic screening and have access to food and lounges, then pass through additional screening/immigration to reach the gate.

Quoting VapourTrails (Reply 21):
Canberra Airport has unveiled it new international departures and arrivals hall designs as it prepares to welcome its first overseas flights in September, claiming it will be the best international terminal in Australia.

Canberra Airport managing director Stephen Byron said the design was more akin to the quality and standard expected from airline club lounges than an airport waiting area.

I'd imagine many passengers are of the lounge using type and there won't be dedicated lounges built without more flights.

Exciting times! I'm pleased for Canberra. Now they just need the light rail running to the airport.

[Edited 2016-05-03 20:26:52]

qf789 · Wed May 04, 2016 3:51 am

QR to fly A388 seasonally to SYD from 15th September 2016

http://www.ausbt.com.au/qatar-airway...ly-airbus-a380-to-sydney-from-june

qf789 · Wed May 04, 2016 5:47 am

For anyone interested here is the tentative schedule for the AN-225 that will fly into PER on the 15th of May 2016. Schedule is for 10 days from 10th of May.

http://www.flightradar24.com/blog/ta...llow-it-to-perth-australia-in-may/

Sydscott · Wed May 04, 2016 7:27 am

Quoting allrite (Reply 20):
For Virgin it's been seen as a core driver of their recent growth. I would not be surprised if some of the move upmarket was done with a belief that cashed up miners and their employers would use the lounges and the business class seats, would stick with VA due to connections, contracts and points.

But if this has indeed been VA's strategy then Borghetti is both right and wrong to blame the resource sector slowdown. Wrong, as you say, because it's VA and Borghetti's fault for pursuing too narrow a strategy.

Wrong because, like our Government, if that is what VA believed then they have stupidly made investments to service a once in a generation boom that will probably never be seen again in any of our lifetimes. You don't build a sustainable business that way.

Quoting allrite (Reply 20):
VA are relative newcomers to regional services through VARA, whereas Qantas, through the Qantaslink umbrella, have been doing it since before the minerals boom. The assets they've added, like Network, have built upon those existing services and assets. They've also been built up using older aircraft. So I think they've seen the resources driven business as just one part of their greater operations.

I actually see that as a copout because the expertise VA acquired via Skywest in regional flying and charter flying, which Skywest had been doing for years, was extensive and dated back to the Ansett days. So if they didn't utilise that to the fullest extent then that again points to a management problem at VA.

Quoting RyanairGuru (Reply 18):
I think that this goes back to them trying to please everyone, not wanting to alienate more of the market to JQ with the higher fares than a proper full service model would necessitate while trying to provide a high cost full service model, and ultimately therefore pleasing nobody.

I disagree that they're trying to please everyone. The real problem is that the strategy to move upmarket, which involved A330's and a large bump in capacity, didn't result in the substantially higher yields to compensate while at the same time they successfully alienated the core flyer of the old Virgin Blue without continuing to give them a reason to fly Virgin. Thus JB allowed his old DJ flyers to leak to Jetstar and to a lesser extent Qantas domestic while at the same time not being able to replace them with a sufficient quantity of people willing to pay a higher fare for their higher cost base. That is why they bought TT but it was too little, too late.

Quoting timtam (Reply 13):
JB's strategy has been fundamentally flawed right from the beginning.

Building a Qantas 2 was always a flawed strategy. I agree!

Quoting timtam (Reply 13):
JB has overseen the destruction of significant value with the business being pretty much cashflow negative for the whole time he has been there. He hasnt returned a brass razoo to shareholders in his time at VA.

VA exists because of the largesse of its major shareholders pure and simple. They are an investment basket case otherwise.

Quoting mariner (Reply 2):
And I keep coming back to the same question - if (LCC) Virgin Blue was not the answer, why is (LCC) Tiger now the engine of growth?

Because with TT they are trying to bolt Jetstar Mark 2 onto Qantas Mark 2. It's a logical extension of the same failed strategy by VA. Who knows, TT might start making some $$$ and Rob Sharp is a good operator, but honestly the best thing that could happen to Virgin is that they become a wholely owned subsidiary of Singapore Airlines and the entire Board and Management ranks are cleansed.

qf2220 · Wed May 04, 2016 8:17 am

On the VA strategy - if they were trying to make QF type 2, what is their competitive point of difference that would lead to pax choosing them instead of QF in the first place?

Thai77w · Wed May 04, 2016 8:52 am

Apparently second QR service to ADL had 15!! pax On board.

SYDSpotter · Wed May 04, 2016 9:35 am

Quoting QF2220 (Reply 30):
if they were trying to make QF type 2, what is their competitive point of difference that would lead to pax choosing them instead of QF in the first place?

On the domestic front, ultimately price. Have a product that is comparable to QF (not necessarily equal to nor better than QF's product) but at a price that was lower than QF's and thereby being able to capture some of the more price conscious premium/corporate market. At the time VA began this strategy, we were post-GFC, so even the large corporates were reviewing their travel policies. Problem for VA was that their cost base also rose significantly and to date, there hasn't been enough of a yield increase to match the cost base increase.
QF of course hasn't been standing still and certainly sharpened their pricing whilst at the same time reduced their cost base. Now the cost base differential between QF and VA is minimal but QF are able to command a higher premium/yield compared with VA.

IndianicWorld · Wed May 04, 2016 10:58 am

Thai77W, hardly a surprise considering the deals that they were available for travel via ADL onto their flights. There's talk around that QR will likely reduce frequency of the ADL service soon.

It was a mistake to go in at a daily frequency. Seems like the fleet planner got his way more than any commercial sound decision making.

The QR A380 into SYD so soon after launch is an odd move to be honest but hey AAB is all about making big statements. It had MEL service for years now and never took this step so it really shows the pulling power of SYD in the decision making of airlines.

soyuz · Wed May 04, 2016 11:20 am

Quoting qf789 (Reply 28):

Thanks for providing that! The night time arrival and departure at PER will certainly pose an interesting challenge to spotters. Am really looking forward to seeing the photos. Would've loved to see captain Dmitri Antonov bring this beauty down for her first Australian visit but alas, it isn't meant to be this time - stuck on the east coast. I wonder what she'll be hauling to the UAE from Europe after she departs...

qf789 · Wed May 04, 2016 12:07 pm

Quoting IndianicWorld (Reply 33):
There's talk around that QR will likely reduce frequency of the ADL service soon.

It was a mistake to go in at a daily frequency. Seems like the fleet planner got his way more than any commercial sound decision making.

Apparently there will be a 12 week period where it will be operated 6 weekly instead of daily but this is due to lack of aircraft for QR. I do agree that they should have started at a reduced frequency, say 4 weekly and let the route grow.

AAB also said today PER will be next A350 Australian destination

http://australianaviation.com.au/201...-next-australian-a350-destination/

Quoting soyuz (Reply 34):
The night time arrival and departure at PER will certainly pose an interesting challenge to spotters

It is scheduled to arrive at 10am on Sunday 15th May, those times in the link are all on UTC time

Heard the following on the radio today and don't recall it being mentioned in the previous thread

On the 22nd of April a pregnant woman went into labour on 3K583 RGN-SIN. The baby boy was born onboard and as a result has been named Jetstar

http://www.straitstimes.com/singapor...-birth-onboard-jetstar-asia-flight

Razza74 · Wed May 04, 2016 12:27 pm

Quoting soyuz (Reply 34):
Thanks for providing that! The night time arrival and departure at PER will certainly pose an interesting challenge to spotters. Am really looking forward to seeing the photos.

The times are quoted in UTC so you will need to add 8 hours to get PER time so the AN225 will be arriving at 10:00 and departing at 08:00

Razza74

[Edited 2016-05-04 05:28:06]

allrite · Wed May 04, 2016 12:28 pm

Quoting Sydscott (Reply 29):
Wrong because, like our Government, if that is what VA believed then they have stupidly made investments to service a once in a generation boom that will probably never be seen again in any of our lifetimes. You don't build a sustainable business that way.

Agree with this and the rest of your post, except for...

Quoting Sydscott (Reply 29):
honestly the best thing that could happen to Virgin is that they become a wholely owned subsidiary of Singapore Airlines and the entire Board and Management ranks are cleansed.

I think they need someone with a bit of vision and independent thinking from outside the region (especially as New Zealand has given up). I fear SQ is too conservative and too much like VA is right now (unless you want to make it a Scoot subsidiary) and the Chinese airlines too inexperienced.

I'm still rather surprised that VA isn't doing the SIN-CBR-WLG run instead of SQ. They could have out their A330s to use on that route and still taken advantage of the partner feed at both ends and their own in the middle. That's the kind of thinking that could distinguish them from QF Mk I.

Quoting qf789 (Reply 35):
On the 22nd of April a pregnant woman went into labour on 3K583 RGN-SIN. The baby boy was born onboard and as a result has been named Jetstar

There was a thread about it, but I'm on a mobile device so can't be bothered searching for it. Nice for Jetstar to have a positive baby story, they allow flying up to 40 weeks subject to certain conditions.

Sydscott · Wed May 04, 2016 1:08 pm

Quoting allrite (Reply 37):
I think they need someone with a bit of vision and independent thinking from outside the region (especially as New Zealand has given up). I fear SQ is too conservative and too much like VA is right now (unless you want to make it a Scoot subsidiary) and the Chinese airlines too inexperienced.

I disagree. I think SQ buying VA will make for a significantly more formidable competitor to QF in terms of:

1. All codeshares would be cancelled other than with SQ and NZ. Thus traffic would be funnelled through key hubs internationally.
2. You'd probably see the DL deal end and a UA one put in place instead. That gives VA access to a true hub at SFO which they could fly into along with a lot more Trans-Pac services.
3. Not to mention it would fulfil the SQ dream of having a sub flying trans-pacific from Australia!;
4. You'd see an integration of Scoot & Tiger Australia which would be fairly formidable. I could then see a Scoot Australia using 787's;
5. Replacement of VA's 77W's with A350's.

and that's just the starting point! Not too mention the VA A330's would probably find their way internationally more alongside SQ being more focused on VA actually making money rather than draining the group of cash.

Quoting SYDSpotter (Reply 32):
QF of course hasn't been standing still and certainly sharpened their pricing whilst at the same time reduced their cost base. Now the cost base differential between QF and VA is minimal but QF are able to command a higher premium/yield compared with VA.

And that is the crux of JB's problem. In the battle for marketshare he successfully pursued the line of QF being a big bad bully which was forcing VA to go to its shareholders for $$$. Now that the capacity way is well and truly over not to mention record low fuel prices, VA should be making money. I'd go as far as saying that is their is an airline that is not currently at peak profitability then they will never be because in terms of costs it doesn't get much better than this. So the fact that VA can't make money in this environment is testament to the failure of JB's tenure.

CXfirst · Wed May 04, 2016 1:08 pm

Quoting qf789 (Reply 35):
AAB also said today PER will be next A350 Australian destination

Won't believe it until I see it.

PER was supposed to get the 787, but didn't (although glad about that). Then, when the A350 routes were announced, I think JFK was first, but PER was listed as one of the first handful of destinations. That never happened.

So, this is the 3rd time a new aircraft type has been 'announced'. As far as I was aware, the 787 idea was scrapped, due to greater demand leading to the need of the larger 77W (keeping in mind, that at time of announcement, 77L flew most flights). So, unless QR is seeing some decline at PER (entirely possible), don't understand why they'd want the A350 over the 77W.

-CXfirst

ben175 · Wed May 04, 2016 1:42 pm

I'm flying QF and AA on MEL-SYD-LAX (then connecting on B6 to JFK) in a few weeks, and Qantas has cancelled over 4 of the morning MEL-SYD services (including the flight we were originally booked on) as it's a public holiday on the 13th. Now we only have 1 hour to connect in SYD, and my travel companion has two knee replacements and can't run. The only options are a 6:00am departure (which is full in J) or 8:30am, the flight we have been moved to. It's going to be an absolute disaster if the first flight is running late.

I find it terrible that QF would cancel so many flights only a few weeks from departure. They've known it's a public holiday for months now. To compare, VA has flights going every half hour from 7am to 9am on the same day.

IndianicWorld · Wed May 04, 2016 10:06 pm

1 hour to connect domestic to international in SYD? Not likely going to be end well sorry to say.

All it takes is a delay in your domestic leg and that terminal change will make that connection next to impossible, unless they hold the flight to wait.

Good luck though.

mariner · Wed May 04, 2016 10:20 pm

Quoting Sydscott (Reply 38):
I think SQ buying VA will make for a significantly more formidable competitor to QF in terms of:

I agree wth everything you say, and most commentators agree that Singapore is the obvious buyer. I just see it as the same ol' players doing the same ol' things.

I'd love to see a real shake-up such as one of the Chinese airlines. CAPA says that China Southern and Hainan are sniffing around Virgin, and I think either could cause a considerable stir.

http://centreforaviation.com/analysi...e-to-grow-tourism-potential-278973

"China Southern and Hainan Airlines evaluate Virgin Australia stake to grow tourism potential"

But whoever it's going to be, SMH says that Air New Zealand wants out by 30 June:

http://www.smh.com.au/business/aviat...ustralia-sale-20160503-golln0.html

"Air New Zealand has quick timetable for Virgin Australia sale

Air New Zealand has flagged to investors that it is aiming to sell all or part of its 25.9 per cent stake in Virgin Australia by June 30, in a move that could result in the Kiwi carrier paying a special dividend."

mariner

sunrisevalley · Wed May 04, 2016 10:42 pm

Quoting RyanairGuru (Reply 18):
Writing down assets, such as the three ATR-72s

maybe NZ should take them as part payment against their tab with VA.

Sydscott · Wed May 04, 2016 10:45 pm

Quoting mariner (Reply 42):
I just see it as the same ol' players doing the same ol' things.

I have slightly rosier tinted glasses. SQ should have bought Ansett and NZ should not have got involved in Ansett. SQ buying VA is the ultimate and logical option. I doubt a Chinese Airline, unprotected by political masters and forced to compete in a genuinely regulated market, could do any better than is currently being done. I also don't see the strategic need or case for a Chinese Airline to buy in because if they really wanted a shuttle service for their charter flights they could set one up at a much lower cost than what buying VA would be.

To me the only logical buyers of VA are EY, QR, SQ and NZ. No-one else really has the strategic imperative or need to make the acquisition and out of all of those, since NZ is bowing out, SQ is the one with the most $$$, the best Australian political connections and the one that the public would probably most readily accept.

eta unknown · Wed May 04, 2016 10:57 pm

Quoting ben175 (Reply 40):
I'm flying QF and AA on MEL-SYD-LAX (then connecting on B6 to JFK) in a few weeks, and Qantas has cancelled over 4 of the morning MEL-SYD services (including the flight we were originally booked on) as it's a public holiday on the 13th. Now we only have 1 hour to connect in SYD, and my travel companion has two knee replacements and can't run. The only options are a 6:00am departure (which is full in J) or 8:30am, the flight we have been moved to. It's going to be an absolute disaster if the first flight is running late.

Is MEL-SYD-LAX on one ticket? If so, then you're on your own... slug it out in economy or travel Sunday night MEL-SYD and overnight in SYD. Note: if you take the economy option I'd insist on lounge access and SYD fast-track- this must be noted in the PNR. Hotel is at your expense, but you can gorge out on breakfast the next morning in the lounge.

However, if on the one ticket you then become QF's problem. According to QF web site that one hour connection is legal, so if the LAX-SYD flight isn't held in case of delay then they must re-route you (probably SYD-SFO-LAX). SFO-LAX probably down the back. As for the B6 ticket- hope you were spending time in LAX.

Why were all the QF flights cancelled with about 5 weeks notice- my guess is the forward loads are much worse than anticipated.

[Edited 2016-05-04 16:25:57]

allrite · Wed May 04, 2016 11:19 pm

Quoting Sydscott (Reply 38):
I disagree. I think SQ buying VA will make for a significantly more formidable competitor to QF in terms of:

1. All codeshares would be cancelled other than with SQ and NZ. Thus traffic would be funnelled through key hubs internationally.
2. You'd probably see the DL deal end and a UA one put in place instead. That gives VA access to a true hub at SFO which they could fly into along with a lot more Trans-Pac services.
3. Not to mention it would fulfil the SQ dream of having a sub flying trans-pacific from Australia!;
4. You'd see an integration of Scoot & Tiger Australia which would be fairly formidable. I could then see a Scoot Australia using 787's;
5. Replacement of VA's 77W's with A350's.

It's the competitive aspects that concern me. Perhaps too much focus on competing with Qantas on less on carving out their own niche. I'm sure they'd better than the current mob but, as Mariner says:

Quoting mariner (Reply 42):
I just see it as the same ol' players doing the same ol' things.

If you just funnel everyone via Singapore you have Singapore/Scoot already. No need for VA. To the Americas... Maybe. But where else? If VA/SQ/Scoot Australia go after direct flights to North Asia or HNL then they are just fighting for share on what already must be getting towards a marginal market considering the current state of competition. JQ to Japan and HNL vs Scoot? Can it support two LCC's on the same routes or will we just see yields getting trashed. Will Tiger/Scoot be used in an attempt to destroy Jetstar? Right now there are passengers already willing to fly to North Asia via SIN and KUL simply due to the price. But without the hub effect and an Asian cost base can you offer those same competitive prices?

After watching the recent Foreign Correspondent story an Indonesian aviation I'm surprised the Lion Group doesn't want VA.

mariner · Wed May 04, 2016 11:24 pm

Quoting Sydscott (Reply 44):
SQ buying VA is the ultimate and logical option.

Oh, I think you - and most of the other commentators - may well be right. If there is going to be a play for control (as opposed to just a minority holding) of Virgin, I expect it will come from Singapore.

But if I had my druthers, I'd rather see a shake up, and I think one of the Chinese airlines could do that. I agree with the CAPA comments on China Southern:

"China Southern would benefit from a stronger local partner after its previous partner Qantas formed a JV with the rival China Eastern. With every Chinese visitor taking two to three domestic Australian flights, an equity stake could allow the Chinese airline to capture back revenue streams"

At the very least, I would expect them to do what Virgin should have done yonks ago - (and I doubt Singapore ever would) - and start direct flights Oz to China.

I haven't kept in-depth tabs on Chinese demand for Australia, but in New Zealand it's stratospheric:

http://www.nzherald.co.nz/business/n...ticle.cfm?c_id=3&objectid=11633328

"China Business: Air NZ tourism market flies ahead

Stephen Jones is upbeat about the unparalleled rate of growth out of the Chinese tourism market."

I assume it's true for Australia as well, or even more so, but JB sure missed that boat.

mariner

[Edited 2016-05-04 16:29:51]

allrite · Wed May 04, 2016 11:36 pm

Quoting mariner (Reply 47):
At the very least, I would expect them to do what Virgin should have done yonks ago - (and I doubt Singapore ever would) - and start direct flights Oz to China.

I haven't kept in-depth tabs on Chinese demand for Australia, but in New Zealand it's stratospheric:

http://www.nzherald.co.nz/business/n...ticle.cfm?c_id=3&objectid=11633328

"China Business: Air NZ tourism market flies ahead

Stephen Jones is upbeat about the unparalleled rate of growth out of the Chinese tourism market."

I assume it's true for Australia as well, or even more so.

Growth out of China is huge in Australia. The problem is that it is difficult for Australian airlines to compete both on cost with the Chinese airlines and with capturing local sales networks. It's not a level playing field.

The other issue with ownership of VA by a Chinese airline is the lack of experience in foreign ownership. I wouldn't call the Chinese airlines innovative, but they don't need to be in their local market. This will change, but for now I don't see much management benefit from a Chinese airline owning a large stake in VA.

mariner · Wed May 04, 2016 11:44 pm

Quoting allrite (Reply 48):
Growth out of China is huge in Australia. The problem is that it is difficult for Australian airlines to compete both on cost with the Chinese airlines and with capturing local sales networks. It's not a level playing field.

As in the linked article, that doesn't seem to be affecting Air NZ and since Qantas is the only Oz airline flying to China then maybe there is opportunity for an airline with lower costs than Qantas - which hybrid Virgin should have.

Quoting allrite (Reply 48):
The other issue with ownership of VA by a Chinese airline is the lack of experience in foreign ownership.

I noted that when you first raised it, and I assume they'd buy people with that experience - the right people, of course.

mariner

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