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Old Aug 16, 09, 11:52 am   #1
 
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BA loses Prime Minister charter contract to Virgin

There's a small item in today's Sunday Times that BA has lost the contract to provide charter aircraft for the PM to Virgin. The decision was reportedly based on price, with Virgin uncutting BA by 20-30%.

Rightly or wrongly, this will be seen by some as quite a symbolic move.

http://www.timesonline.co.uk/tol/com...cle6797830.ece

"It used to be the world's favourite airline and now..." (Copyright all newspapers).
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Old Aug 16, 09, 12:28 pm   #2
 
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I would think 99% of the population would not notice. But this does reflect BA's plight against other airlines in the premium market.

Their prices are generally higher (20-30?) and the quality seems, based on this boards recent activity, to be losing its focus on its critical quality measures.
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Old Aug 16, 09, 12:29 pm   #3
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Quite right too. A stupid airline for a stupid man.
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Old Aug 16, 09, 12:29 pm   #4
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But VS does not have a first class cabin.

Whatever you might think about Mr Brown the Prime Minister of the UK should travel in F.
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Old Aug 16, 09, 12:32 pm   #5
 
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But this does reflect BA's plight against other airlines in the premium market.
I think it reflects Virgins plight more than ours. Given 50-60% of costs are fixed fuel/airframe related, undercutting by 20-30% shows a pretty desperate need to find work for idle aircraft with unexpired leases.
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Old Aug 16, 09, 12:36 pm   #6
 
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Originally Posted by Sixth Freedom View Post
But VS does not have a first class cabin.

Whatever you might think about Mr Brown the Prime Minister of the UK should travel in F.
They also don't have a short-haul fleet (surely the PM doesn't need a 747 for short hops to mainland Europe) and a brand name that is not well suited some Middle Eastern countries the PM may need to visit.
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Old Aug 16, 09, 12:38 pm   #7
 
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Originally Posted by Jumbodriver View Post
I think it reflects Virgins plight more than ours. Given 50-60% of costs are fixed fuel/airframe related, undercutting by 20-30% shows a pretty desperate need to find work for idle aircraft with unexpired leases.
VS probably has more PR upside out of it that BA; I am sure SRB will make every Gordie trip a VS press release.
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Old Aug 16, 09, 12:45 pm   #8
 
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Originally Posted by Sixth Freedom View Post
Whatever you might think about Mr Brown the Prime Minister of the UK should travel in F.
While I agree with your general sentiment I'll make an exception in the case of this to**er!

On the bright side, at least there's now no chance of me bumping in to him in LHR T5 GF. If I did there's every chance I'd have blood on my hands.
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Old Aug 16, 09, 12:56 pm   #9
 
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As a taxpayer, I am happy that the Government picked the cheapest deal.

Does anyone know how much the PM spends on charters each year? Is it time we bought an aircraft?
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Old Aug 16, 09, 12:56 pm   #10
 
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Originally Posted by elitetraveler View Post
VS probably has more PR upside out of it that BA; I am sure SRB will make every Gordie trip a VS press release.
I would think the contract with VS doesn't allow them to make any public statements without prior approval from The Government.

No smug self-congratulatory guff from Paul Charles yet anyway.
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Old Aug 16, 09, 1:00 pm   #11
 
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Originally Posted by Sixth Freedom View Post
But VS does not have a first class cabin.

Whatever you might think about Mr Brown the Prime Minister of the UK should travel in F.
Why? What's wrong with the front rows on VS? What's better about BA in F?
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Old Aug 16, 09, 1:01 pm   #12
 
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Originally Posted by ian001 View Post
I would think the contract with VS doesn't allow them to make any public statements without prior approval from The Government.

No smug self-congratulatory guff from Paul Charles yet anyway.
where there's a Will (Whitehorn) there's a way. Maybe they offered to upgrade the PM to Virgin Galactica
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Old Aug 16, 09, 1:23 pm   #13
 
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Why? What's wrong with the front rows on VS? What's better about BA in F?
this is a joke question right?
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Old Aug 16, 09, 1:53 pm   #14
 
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Originally Posted by baggageinhall View Post
As a taxpayer, I am happy that the Government picked the cheapest deal.

Does anyone know how much the PM spends on charters each year? Is it time we bought an aircraft?

"Blair Force One" was going to cost in the region of 12M per year:

http://www.timesonline.co.uk/tol/new...cle1826731.ece


Brown quite rightly decided to cancel Blair Force One:

http://www.guardian.co.uk/politics/2...27/gordonbrown
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Old Aug 16, 09, 1:58 pm   #15
 
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Originally Posted by baggageinhall View Post
As a taxpayer, I am happy that the Government picked the cheapest deal.

Does anyone know how much the PM spends on charters each year? Is it time we bought an aircraft?
Yep so am I, but if I were a BA shareholder I'd be fuming that BA didn't offer to fly the guy for free to keep this contract. Whatever you think of Gordon Brown, I think the kudos of carrying the PM of this country on official business is worth whatever it costs in terms of lost revs (and let's face it there are plenty of empty seats/planes they can give him at the moment!)

As to buying a plane, it is a classic UK scenario whereby the government prefers to shell out xm per year in charters instead of xxm in capex because a) it is politically embarrassing to buy a plane and b) it is easier to fund travel costs from current expenditure than pay upfront for capex. You see exactly the same phenomenon across the civil service and much of industry these days, where managers prefer to pay contractors 3 times the rate of a salaried employee, often for periods of several years, rather than bite the bullet and budget for a new permanent member of staff.
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