Qantas Frequent Flyer - OT: Interesting Developments at DJ

Well QF related how will this impact the relationship with Etihad?
Also A330-200 for DJ for trans-continental flights? Now that is a surprise!
VIRGIN Blue Group will pull V Australia out of South Africa and Phuket and introduce new widebody Airbus A330s on its domestic services.

The moves are part of a wide-ranging network review that will also see Virgin Blue jump into bed with Middle eastern carrier Etihad, and free it to concentrate on Abu Dhabi and Los Angeles as “strategic hubs”.

The airline said it had been losing money on South Africa and believed the prospects of achieving return were remote.

It said the Phuket service was “sub-optimal” for its Boeing 777-300 aircraft.

Chief executive John Borghetti described the decision to add A330-200 planes to its domestic services as a game changer that would allow it to grow its fleet and network capabilities.

“The first A330-200s will operator services between Perth and the east coast of Australia, enabling Virgin Blue to grow available capacity, especially at peak times, extending the airline’s appeal to business travellers,” he said.

Mr Borghetti said the deal with the strategic partnership with Etihad would give V Australia a gateway to more comprehensive international long-haul network with the connection to the Middle East, UK, Europe, Africa and Asia.

.....
Full story at The Australian (http://www.theaustralian.com.au/business/virgin-blue-back-in-profit-but-theres-turbulence-ahead/story-e6frg8zx-1225910285705)

Interesting on so many levels, but clearly an attack on QF on QF's 2 most profitable routes. Etihad is in the process of reconfiguring their planes to provide a better F/J service (on par or better than QF, even by A380 standards). So the DJ tie-in is interesting (I think Etihad thinks it can get the F/J traffic while DJ will provide feed).

LAX is astonishing as SFO is the Virgin America base (though I have noticed a lot of growth at LAX in the past year). So it looks like Virgin is moving more to LAX from SFO and SEA, fwiw. Abandoning JNB is a smart move, there simply isn't the money from that market.

Maybe QF will pull some 747s back onto SYD/MEL-PER to go against DJ :)

Indeed. I'm booked on VA to return HKT-SYD on 30 Jan 2011 and noone can tell me if the flight will be operating. Amazing that Jet* can monopolise this route given that the VA product is far superior in Business.

Perhaps they should have flown ex SYD not VIA BNE.

LAX is astonishing as SFO is the Virgin America base (though I have noticed a lot of growth at LAX in the past year).

IMHO Virgin AU never flew to SFO, so no changes there...

The whole thing is interesting as first I was wondering why QF decided to code-share with EY (that is definitely stealing traffic to Europe from QF). And not I wonder why EY decided to trade QF for DJ...

Indeed. I'm booked on VA to return HKT-SYD on 30 Jan 2011 and noone can tell me if the flight will be operating..
Given they have said they will be pulling out in FEB I presume your flights will operate as normal.

Given they have said they will be pulling out in FEB I presume your flights will operate as normal.Judging by what VA is taking bookings for, it looks like the last flights are something like this: BNE-HKT-BNE on 20 February, MEL-HKT-MEL on 21 February, and then MEL-JNB-MEL on 22 February.

The whole thing is interesting as first I was wondering why QF decided to code-share with EY (that is definitely stealing traffic to Europe from QF). And not I wonder why EY decided to trade QF for DJ...

QF has terminated the codesharing with EY (according to David Epstein in today's AFR).

Got an email yesterday. Last HKT-BNE is 20 February 2010. You can view the email at http://www.virginblue.com.au/vmail_dev/2010/PB/PB-VA_100826_unaffected.html

Let's say there were some stressful hours yesterday as the entire trip had been sorted, right down to the minute details and this was a potential major spanner in the works.

IMHO Virgin AU never flew to SFO, so no changes there......Virgin America chose to make it's main hub in SFO and no hub in LAX; after less than 2 years in operation, it has built up a mini-hub at LAX and now V.Australia is stating that LAX is 1 of 2 strategic hubs -- and SFO is not. Part of that famous Virgin flexibility. Never mind that SFO has terminal and airport that is 10x better than LAX T3 (the most rundown and crowded of the LAX terminals, as it was expected to be torn down by 2010).

Why would DJ want to get another aircraft type when that would just increase their costs. Why get 330s instead of more 777s?

330's are available now, whereas 777 is in high demand worldwide. Doubt the 777 would be economical on domestic runs (plenty of others on this forum would know though). Would have thought 333 would be better than 332 given the route lengths, but perhaps that is an availability thing as well.

I'd say pricing is also a large factor in the decision.

Well QF related how will this impact the relationship with Etihad?QF has terminated the codesharing with EY (according to David Epstein in today's AFR).There is a part of me that's very glad about this.

EY email is here http://resources.etihadairways.com/etihadairways/htmls/Newsletter/EyGuest/VirginBlue_EY_AU_web_08_10.html

Virgin America chose to make it's main hub in SFO and no hub in LAX; after less than 2 years in operation, it has built up a mini-hub at LAX and now V.Australia is stating that LAX is 1 of 2 strategic hubs -- and SFO is not. Part of that famous Virgin flexibility. Never mind that SFO has terminal and airport that is 10x better than LAX T3 (the most rundown and crowded of the LAX terminals, as it was expected to be torn down by 2010).

VA also has an interline with DL which makes LAX it US hub fairly obvious. The issue with VX and SFO is that there is less O&D traffic, the TPAC gateway is still LAX and SFO is greatly affected by fog.

Why would DJ want to get another aircraft type when that would just increase their costs. Why get 330s instead of more 777s?

The 332 is the smallest widebody currently available. From a CPS perspective they are the only widebody that VA could use for the task.

Don't forget the Virgin group only owns 25% of DJ.

And DJ has brought in ex-QF management in a big way (who seem to be intent in converting DJ from what it was to be what they wanted QF to be).

Don't forget the Virgin group only owns 25% of DJ.

Plenty of rumours about that they are losing patience in getting a license to use the Virgin brand internationally (blocked by SQ, hence PB & VA), and may rebrand the entire group as VA or something similar. This would help signal a change from the old regime.

And DJ has brought in ex-QF management in a big way (who seem to be intent in converting DJ from what it was to be what they wanted QF to be).

I really wanted JB to get the CEO gig at QF. I like what he is doing with DJ - they can't compete at the low end with Tiger/JQ, can't keep getting squeezed in the middle, so is going upmarket to pull QF traffic. Converting their Y+ (a stupid idea from the start) to a proper J is a good example.

Plenty of rumours about that they are losing patience in getting a license to use the Virgin brand internationally (blocked by SQ, hence PB & VA), and may rebrand the entire group as VA or something similar. This would help signal a change from the old regime.

I would not be surprised to see this happen.

Perhaps they can purchase the Ansett name off the administrators and re-brand the airline into what it fast appears to becoming. (the positive bits that is) :D

I would not be surprised to see this happen.

Perhaps they can purchase the Ansett name off the administrators and re-brand the airline into what it fast appears to becoming. (the positive bits that is) :D

Why would you want to rebrand it Ansett.

Why would you want to rebrand it Ansett.

Recognised brand and can be used both within and out of Australia. It also has an emotional attachment for many Australians. As it has been a while since the brand was around, most negative aspects of the brand have faded leaving most people aware of only the positive.

Most importantly it means that the company (DJ) can consolidate over 1 brand rather than 4 it currently uses which is bizarre since they are not really trying to segment their market in the QF/JQ kind of way.

Why would you want to rebrand it Ansett.

Especially with the tie-up with Air NZ, it kinda makes sense. It also gets SQ off their back in terms of the whole naming thing, and allows them (being Ansett) to re-enter the Star Alliance.

Recognised brand and can be used both within and out of Australia. It also has an emotional attachment for many Australians. As it has been a while since the brand was around, most negative aspects of the brand have faded leaving most people aware of only the positive.

Only to the elderly and any positives have faded. Its relationship with NZ will only bring back anger as was it not NZ that drove it into the ground after being severely beaten by previous owner Pete Abels

Most importantly it means that the company (DJ) can consolidate over 1 brand rather than 4 it currently uses which is bizarre since they are not really trying to segment their market in the QF/JQ kind of way.

Plenty of rumours about that they are losing patience in getting a license to use the Virgin brand internationally (blocked by SQ, hence PB & VA), and may rebrand the entire group as VA or something similar. This would help signal a change from the old regime.I notice that Branson had something to say about this: Virgin name to stay – Branson (http://australianaviation.com.au/virgin-name-to-stay-%e2%80%93-branson/)

In a rash of DJ stories from that site:-Branson says Virgin could cut Tasman flights (http://australianaviation.com.au/branson-says-virgin-could-cut-tasman-flights/) DOT to block Delta, Virgin Blue joint venture (http://australianaviation.com.au/dot-to-block-delta-virgin-blue-joint-venture/) ACCC to deny Virgin-Air NZ tie up (http://australianaviation.com.au/accc-to-deny-virgin-air-nz-tie-up/)

Given they have dropped NZ domestic (from OCT), I presume the logical chice would be Virgin Australia and rebrand Pacific Blue, Virgin Blue and V Australia into the common name branding.

It also gets SQ off their back in terms of the whole naming thing, and allows them (being Ansett) to re-enter the Star Alliance.

If oyu look at the Virgin Blue prospectus - there is nothing about SQ blocking the name. It is actually Virgin Group (which has no SQ ownership) that has the restrictions on the Virgin Blue brand licensing.

Somne key points from their prospectus

http://www.virginblue.com.au/cms/groups/pr/documents/internetcontent/u_000658.pdf Page 70

- Virgin Group own the "Virgin" and "Virgin Blue" names
- License agreement until 2015
- Name is licensed until 2015
- Can only be used for domestic and no other worldwide places (presumably to protect Virgin's chances of franchising the brand in other markets)

and the interesting bit

- 0.5% royalty on revenue patable to Virgin Group. Capped at 1.5 times the amount paid at end of 31 MArch 2004

So no mention of SQ blocking anything (wives tale)..... and it seems that Virgin Group have been losing out on commission due to the cap. So presumably any blocked roads over the "Virgin" name are about commission payable going forward as currently PAc Blue and V Aus would not be paying commission.

If oyu look at the Virgin Blue prospectus - there is nothing about SQ blocking the name. It is actually Virgin Group (which has no SQ ownership) that has the restrictions on the Virgin Blue brand licensing.
...
So no mention of SQ blocking anything (wives tale)If it were true, I would still have been at least a bit surprised to see it mentioned in a prospectus.

The prospectus no doubt states the true legal position.

But SQ's clout through its part-ownership of VS would give it ample political power to persaude Virgin Enterprises to block any wider licensing of the Virgin name. You wouldn't expect that to get written up in a prospectus, would you?

All pretty interesting - the last few years when I have flown down to the Australian Open, the Umpires Information Sheet has said (something along the lines of) "Please indicate your flight preferences - note, we will use the best pricing between Qantas, Virgin Blue, Jetstar and Tiger Airways, as well as others, to get you to Melbourne as economically for Tennis Australia as possible."

This year, it says: ".........Please be aware that VirginBlue is a sponsor of Tennis Australia, accordingly flights will be booked on VirginBlue where practicable."

The last few years of umpiring, QF have been a major sponsor ot the Australian Open, and QF have got the majority of the flights as far as officials are concerned.

DJ seems to have spent some serious bucks here......

Dave

SQ blocking is not a wives tale. It was communicate to me by a mate who is quite senior management at V Australia.

As for the Australian Open, DJ realised their sponsorships weren't returning on their investment. With the tennis, and Sydney Gay & Lesbian Mardi Gras they are contracting the organisations they sponsor to force sales through their attendees to DJ, such as Flight Centre's Mardi Gras packages.

I notice that Branson had something to say about this: Virgin name to stay – Branson (http://australianaviation.com.au/virgin-name-to-stay-%e2%80%93-branson/)

I dare say SRB wants the Virgin name to continue so his group continues to receive royalties/licensing. SRB has a long history of shooting his mouth off in the media for self publicity and corporate manoeuvring.

SRB also had a "vision" of being able to fly "Round the World" solely in "Virgin" planes.

http://www.virgin.com/richard-branson/2010/9

...Now that you can fly around the world on Virgin airlines

SRB also had a "vision" of being able to fly "Round the World" solely in "Virgin" planes.

http://www.virgin.com/richard-branson/2010/9

Well NZ beat him to that: the first(?) and still the only airline on whose regular services you can circumnavigate the globe. Whooops, apologies, Kiwi patriotism made me forget this is QF forum...

Currently the only, but not the first. Pan Am certainly did this in the past. I think TWA may have done as well?

Currently the only, but not the first. Pan Am certainly did this in the past. I think TWA may have done as well?

You can fly Pam Ann's OneWorld Alliance around the world -

http://www.youtube.com/watch?v=e_Vs6ewDP68&feature=related &

http://www.youtube.com/watch?v=0JgKWguQ4P4

Currently the only, but not the first. Pan Am certainly did this in the past. I think TWA may have done as well?

QF allowed this ~ 40 yrs ago with the Kangaroo route SYD-LHR and a return either via JFK or MEX.

Did QF operate all of the sectors?

Did QF operate all of the sectors?

Yes. I only ever went as far as MEX (with parents in charge of me...) but AFAIK the plane went on to LHR via NAS and BDA (SYD-AKL-PPT-ACA-MEX-NAS-BDA-LHR). Likewise, the SFO (or LAX?) flight went on to LHR via JFK. QF on all sectors.

QF did indeed fly 707s own-metal around the world but had no traffic rights in the US, hence the initial routing via Mexico, Bahamas and Bermuda. I think QF did fly JFK-LHR but not sure about this, however definitely did not have SFO-JFK-LHR rights if there was any SFO-JFK service sold. QF did not fly to LAX during this period. Rather interestingly QF still has JFK-LHR rights but has chosen not to use them (perhaps wisely). While CX which never had JFK-LHR rights has applied but has been turned down (with objections by AA and BA amongst others, Oneworld has so much solidarity as an alliance). Some other unexpected airlines have had RTW service, for example Thai might have when it flew to South America, and so did Malaysian (with their bizarre JNB-EZE non-stop). Surprisingly many, it isn't just the obvious candidates of PanAm and TWA and UA. But every single RTW route has been unprofitable as the traffic is unbalanced and better served via captive hubs :)

But every single RTW route has been unprofitable as the traffic is unbalanced and better served via captive hubs :)Thanks for the information, og and number_6!

I agree about the economics of a RTW operation. Aircraft have changed much since then, and alliances have also changed the game. I suppose that NZ is in a different position from most other airlines, in that its "RTW service" is comprised of two flights operating the same route over broadly the same flown distance, but using a different en-route stop. A bit like SYD-BKK-LHR and SYD-SIN-LHR, just with a global twist. :)

The 332 is the smallest widebody currently available. From a CPS perspective they are the only widebody that VA could use for the task.

The 767-300ER is still available and smaller by length or max pax than the A332, interestingly a significant portion of the DJ LAME resources have 767 experience.

The 767-300ER is still available and smaller by length or max pax than the A332, interestingly a significant portion of the DJ LAME resources have 767 experience.

I think you will find that a 763ER is too much plane for a domestic travel and the only reason the 767 line is still open is for the KC and Freighters.

I think you will find that a 763ER is too much plane for a domestic travel and the only reason the 767 line is still open is for the KC and Freighters.

763ER is more than enough for Qantas, what makes you think it's too much?