Virgin challenges Qantas on US route

Old Sep 25, 2006, 11:39 pm
  #31  
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Its possible that the same VS aircraft could not be used for both LHR-HKG-SYD and SYD-SFO if there is a requirement that the Australian operator of the flight (Virgin Blue operating as Pacific Blue or Planet Blue etc) may have to use a VH-registered aircraft. QF re-registered VH-NLH when leasing it from BA.

If that's the case, then it may just mean that VS has to position a few aircraft in SYD for the service. I am not sure what fleet capacity VS has available for such operations. 2 aircraft would be required to operate 4 times weekly.

Of course they could also wet or damp lease a 744 from SQ. Now SQ may offer a good deal just to have their livery flying the route even if not with their flight number. That might throw the cat among the pigeons. But not sure the DJ management would go for that one .
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Old Sep 26, 2006, 11:55 am
  #32  
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Originally Posted by NM
Its possible that the same VS aircraft could not be used for both LHR-HKG-SYD and SYD-SFO if there is a requirement that the Australian operator of the flight (Virgin Blue operating as Pacific Blue or Planet Blue etc) may have to use a VH-registered aircraft. QF re-registered VH-NLH when leasing it from BA.
It could always carry two registrations. (Remember the BA Concorde which also carried an 'N' regitration for when it operated the domestic US flights under the Braniff code?)

Dave
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Old Sep 26, 2006, 1:07 pm
  #33  
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Originally Posted by thadocta
It could always carry two registrations. (Remember the BA Concorde which also carried an 'N' regitration for when it operated the domestic US flights under the Braniff code?)...
Concorde also was painted in Braniff colours on one side (and had to be flown by Braniff flight crew on the US leg). SQ also had a "codeshared" Concorde briefly (painted in SQ colours but not sure if it ever had SQ crew or registration). The problem with the LHR-SIN route via Concorde is that it couldn't fly supersonic over much of the route and was only an hour or 2 faster than regular flights.

As for VS, they are desperately short of aircraft (made worse by the A380 delays) and couldn't spare even 1 aircraft for this route. But I suppose VS could buy and operate new aircraft and lease it to the Australian holding company.
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Old Sep 26, 2006, 1:30 pm
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Can AA, DL or Co fly this route still? I thought it was limited now to UA as the only US airline.
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Old Sep 26, 2006, 1:43 pm
  #35  
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Originally Posted by PMMMColonel
Can AA, DL or Co fly this route still? I thought it was limited now to UA as the only US airline.
ANY US carrier can fly between Australia and the LOTFAP any time they wanted to (subject to getting appropriate endorsements on their AOC's).

There is a clause in the bilateral that any new comer to the route is restricted to four flights per week for the first twelve months.

Not sure how CO, AA and NW would fare on this, since they previously operated trans-Pac, and I am not sure how they would go as far as this requirement goes.

DL would certainly fall under this constraint, although it appears to be one which can be worked around. The only trouble is that DL does not have the equipment to service the route viably.

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Old Sep 26, 2006, 3:30 pm
  #36  
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CO definitely still has traffic rights and could operate more flights to Oz anytime they wanted to ... for some reason they stick to the Guam-CNS puddle-jumper. They did fly DC-10s LAX-SYD (via Fiji and American Samoa) for many years, in the 80s. One of the arguments that QF routinely uses against new entrants on this route -- one of the most profitable in the world -- is that so many airlines have dormant route authorities, so there is no need for new competition. I am 80% sure that AA could also operate LAX-SYD tomorrow (ie. that all the paperwork is in place and current) if they wanted to, but of course they don't, as AA is quite happy with their codeshares on QF. Personally I think the US-Australia airline situation has crippled the tourist traffic and has cost Australia billions of dollars a year in lost tourist revenues. There are a decade of statistics that indicate this. So enriching QF's coffers has come at a high price for the Australian economy.
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Old Sep 26, 2006, 4:12 pm
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Originally Posted by number_6
Personally I think the US-Australia airline situation has crippled the tourist traffic and has cost Australia billions of dollars a year in lost tourist revenues. There are a decade of statistics that indicate this. So enriching QF's coffers has come at a high price for the Australian economy.
Number_6, what evidence do you have that this has cost Australia billions? I have heard argued in the industry that there is not greater US to Aus tourist traffic simply because of the American perception of distance from LOTFAP against the reality of just 2-3 weeks annual holidays. It's the trip of a lifetime, not a regular holiday destination.
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Old Sep 26, 2006, 5:14 pm
  #38  
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Originally Posted by number_6
Personally I think the US-Australia airline situation has crippled the tourist traffic and has cost Australia billions of dollars a year in lost tourist revenues. There are a decade of statistics that indicate this. So enriching QF's coffers has come at a high price for the Australian economy.
I don't understand this either; I never have. If there are so many people who would come to Australia but can't because the flights are full and the prices are so high and QF is absolutely raking it in as a result, why don't the other airlines put on more flights to take a slice of the action?

As we know, it's not regulatory problems: Many airlines can start up on these routes.

As we know, it's not service quality issues: NZ could return to LAX-SYD if it wanted to, and it's definitely not a third world airline.

As we know, it's not a lack of ability to invest in new profitable routes: UA had three years of Chapter 11 protection in which to make the investment and re-establish a bigger presence in the market, while protected from start-up and unforeseen losses, but did not take the opportunity to do so.

It's always puzzled me.
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Old Sep 26, 2006, 5:21 pm
  #39  
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Originally Posted by turtlemichael
Number_6, what evidence do you have that this has cost Australia billions? I have heard argued in the industry that there is not greater US to Aus tourist traffic simply because of the American perception of distance from LOTFAP against the reality of just 2-3 weeks annual holidays. It's the trip of a lifetime, not a regular holiday destination.
And of course if the flight to Australia were cheaper, one would also expect those from Australia to be cheaper so more Aussie would spend their tourist dollars in other countries. But probably less outgoing than incoming tourism.
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Old Sep 26, 2006, 6:03 pm
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Originally Posted by NM
And of course if the flight to Australia were cheaper, one would also expect those from Australia to be cheaper so more Aussie would spend their tourist dollars in other countries. But probably less outgoing than incoming tourism.
Aussies are price sensitive - look at these boards!

I'm sure there is someone here more expert than me, but the inbound market to Aus from North America is not as price sensitive as some. eg Aussies to Bali. It's not the cost of the flight, it's that most American tourists, once they work out where we are, can't get their heads around the idea of up to 20 hours in a plane to get to any destination.

Much of the Australian promotion in the US market is direct to getting over that perception ("just 2 meals and 3 movies") or, conversely, trying to convince them that it's worth tolerating the trip because it is simply paradise when you get here.
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Old Sep 26, 2006, 6:06 pm
  #41  
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Originally Posted by number_6
CO definitely still has traffic rights and could operate more flights to Oz anytime they wanted to ... for some reason they stick to the Guam-CNS puddle-jumper. They did fly DC-10s LAX-SYD (via Fiji and American Samoa) for many years, in the 80s.
CO also used to fly to MEL via AKL (and somewhere else between IAH and AKL, but not sure where) with there DC10. In the mid 90s it was often the cheapest option for AKL-MEL flights.
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Old Sep 26, 2006, 7:37 pm
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I understand AA, however if it is one of the most profitable in the world -- why wouldent more airlines who have rights not try to expand here? THey all want more flights international and chase China very hard as well as India to a smaller extent.

I would think AA even could add profit and still fully support QF and oneworld.
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Old Sep 26, 2006, 9:17 pm
  #43  
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Originally Posted by PMMMColonel
I understand AA, however if it is one of the most profitable in the world -- why wouldent more airlines who have rights not try to expand here? ....
The problem is feed, and the incredibly high prices that QF charges for add-ons from SYD or whatever POE the other airlines pick. I've heard that ADL-SYD-LAX for UA was costing more for the ADL-SYD leg than the SYD-LAX leg. When limited to O/D traffic, it simply doesn't work unless you can corner the high-yield business traffic (as QF has done, contrast the UA and QF J and F loads and prices, for example).

The other problem is that while it is a highly profitable market, it is a thin market (China is 100x bigger, albeit undeveloped). DJ solves the feed problem, but the US based airlines have never managed to successfully partner with an Australian airline in the past.
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Old Sep 26, 2006, 9:28 pm
  #44  
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Originally Posted by turtlemichael
Number_6, what evidence do you have that this has cost Australia billions?
http://www.tourismvictoria.com.au/st...ion2_index.htm

Lots of other reports like that. I was being very conservative at saying billions, it is actually tens of billions. Of course there are many factors that play into that.

First a few facts: tourism is AUD 50 billion per year industry, and 10% of Australia's export earnings (also >5% of GDP, but the export earnings are more important considering Australia's trade situation). In this context, 1 billion per year is 2% of the total.

You'll have to do your own research for economic impact of US tourism and factors throttling it as I don't know what is confidential and what is public domain. Plus I don't really have a particular interest in this topic; however I am quite certain that the number is over 10 billion in a 10 year period, and most of that is directly attributable to QF being successful at keeping out competition and preventing marketing arrangements to promote tourism. For example there is a huge market for discounted J seats for cruise pax, and QF has simply discouraged this market.

In any case, this is pretty off topic for this thread (which is supposed to be about Virgin), so please start a new thread if you want to continue this topic.
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Old Sep 26, 2006, 10:06 pm
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Back on Topic

So any further word on what DJ, under whatever airline name they will fly, will do?
Has anyone trawlled through the aircraft manufacturers' site to see if a new order has been placed?
I wonder if they ever considered leasing the ANZ 747, it has the Virgin beds, P/E and excellent Y seats and supplement with a VS 747 to get the daily routing.
I think DJ do need to get the business customers to help the appeal of their domestic corporate offerings and for the margins. Hopefully this will force QF to redue some of their J prices....
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