VX for sale?

Old Mar 23, 16, 10:57 am
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VX for sale?

Only talk will take up to 2 years with all the hearings and approval from the Feds?
http://travelskills.com/2016/03/23/i...rica-for-sale/
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Old Mar 23, 16, 11:23 am
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Interesting. I guess B6 wouldn't be the worst hookup. The problem is that the resulting airline ends up being a dumbbell: Good in NYC, good in Florida, good in California, the rest of the US is flyover country except for a tiny operation in DAL. That's not ideal (US didn't like being a PHX-PHL/CLT dumbbell either).

The problem with a DL hookup would be the Feds going "time to divest your slots"- after going to a great deal of trouble to snub DL at DAL/LGA/DCA they won't be letting DL walk in and take those slots in a merger.

(The same problem probably occurs with WN, UA and AA.)

I suppose AS could be a possibility (ALK has about 6x the market cap of VA, and actually is in better shape to handle a purchase than B6: more cash on hand), but the fleet and network dissimilarities would make it problematic, I think.
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Old Mar 23, 16, 12:47 pm
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Originally Posted by eponymous_coward View Post
Interesting. I guess B6 wouldn't be the worst hookup. The problem is that the resulting airline ends up being a dumbbell: Good in NYC, good in Florida, good in California, the rest of the US is flyover country except for a tiny operation in DAL. That's not ideal (US didn't like being a PHX-PHL/CLT dumbbell either).
They could end up large enough at that point to perhaps attempt a mid-con hub, although I have no idea where. The largest middle-USA (which I'll define as west of Appalachians and east of the Rockies) airports that aren't currently a hub for another airline (I'll ignore anything WN focus city briefly), by passenger counts, are STL, HOU, BNA, AUS, and MCI. None of those are really obvious, and VX/B6 currently have little presence in them (none at all in STL or MCI, and BNA is only starting in May for B6). STL is well located and has the infrastructure built more than most, but would be a tough go with how much WN has increased at STL.
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Old Mar 23, 16, 12:57 pm
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What the airline industry needs at this moment is less competition, since everyone is loosing money due to low fares and expensive fuel. Oh, wait?
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Old Mar 23, 16, 1:02 pm
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Originally Posted by TheBOSman View Post
They could end up large enough at that point to perhaps attempt a mid-con hub, although I have no idea where. The largest middle-USA (which I'll define as west of Appalachians and east of the Rockies) airports that aren't currently a hub for another airline (I'll ignore anything WN focus city briefly), by passenger counts, are STL, HOU, BNA, AUS, and MCI. None of those are really obvious, and VX/B6 currently have little presence in them (none at all in STL or MCI, and BNA is only starting in May for B6). STL is well located and has the infrastructure built more than most, but would be a tough go with how much WN has increased at STL.
Yeah, it would be a tough go of things. ALL of those have WN presence, HOU's a "hub" where WN is even stronger than at STL, MCI, BNA and AUS are midsize cities where you're fighting with WN for a pretty small pie.

I would guess AUS would be "closest" to being a match for the VX/B6 target customer (millennial, urban, techie), and VX and B6 both serve it pretty well, even though the VX DAL-AUS service flopped miserably. They'd serve SFO, LGB, FLL, BOS, MCO, JFK. That's...something? If you added LAS, more intra-Texas service*, and, say, ORD and flipped the LGB service over to LAX** that would probably be a reasonable midcon focus city to build on.

*If they want to be a big dog like WN in a Texas city, they will have to fight with WN for some intra-Texas shorthaul. The problem was DAL has such limited slots for VX that they were gonna lose that one to WN unless they cannibalized other destinations. AUS wouldn't have that problem as much if they serve IAH/HOU/SAT as well.

**I suspect that the merged B6/VX entity would fold up LGB for LAX. There's just no reason to run two hubs less than 20 miles from each other, especially one that is as facility limited as LGB is compared to LAX.

Last edited by eponymous_coward; Mar 23, 16 at 1:12 pm
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Old Mar 23, 16, 1:16 pm
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Originally Posted by eponymous_coward View Post
Yeah, it would be a tough go of things. ALL of those have WN presence, HOU's a "hub" where WN is even stronger than at STL, MCI, BNA and AUS are midsize cities where you're fighting with WN for a pretty small pie.

I would guess AUS would be "closest" to being a match for the VX/B6 target customer (millennial, urban, techie), and VX and B6 both serve it pretty well, even though the VX DAL-AUS service flopped miserably. They'd serve SFO, LGB, FLL, BOS, MCO, JFK. That's...something? If you added LAS, DAL, IAH/HOU, ORD and flipped the LGB service over to LAX that would probably be a reasonable midcon focus city to build on.

(I suspect that the merged B6/VX entity would fold up LGB for LAX. There's just no reason to run two hubs 20 miles from each other, especially one that is as facility limited as LGB is compared to LAX.)
I don't think it will happen (definitely not in the next 15-20 years), but some here and in San Antonio like to float around a joint airport located between the two cities. Ignore for a moment that Austin and San Antonio are about 80 miles apart downtown to downtown (by comparison, Dallas and Fort Worth are 30), and thus getting to/from the cities to the airport could be a hassle unless some sort of high speed rail option was built to both cities (think KUL, which is a similar distance from Kuala Lumpur). That's about the only airport that could support a hub plus WN anytime soon in the middle of the country, with a slight caveat towards STL or BNA if both had significant growth.

That said, VX is only 1-2x daily to SFO from here (and doesn't serve LAX at all), and B6 serves many destinations but isn't more than 2x daily on any of them (I don't think, but definitely not more than 3x daily). So, even here, neither is particularly large.
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Old Mar 23, 16, 2:14 pm
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B6/VX merger would be great, VX would finally get lie-flats on transcons!
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Old Mar 23, 16, 3:51 pm
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Originally Posted by eponymous_coward View Post
Interesting. I guess B6 wouldn't be the worst hookup. The problem is that the resulting airline ends up being a dumbbell: Good in NYC, good in Florida, good in California, the rest of the US is flyover country except for a tiny operation in DAL. That's not ideal (US didn't like being a PHX-PHL/CLT dumbbell either).
B6 is also strong out of BOS.

As far as the middle of the country, they could try to build up their ORD presence. That may be easier said than done.
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Old Mar 23, 16, 4:13 pm
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This Seeking Alpha article has a map of VX & B6's routes:
Is A JetBlue-Virgin America Deal Ahead?
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Old Mar 23, 16, 4:50 pm
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Originally Posted by TheBOSman View Post
That said, VX is only 1-2x daily to SFO from here (and doesn't serve LAX at all), and B6 serves many destinations but isn't more than 2x daily on any of them (I don't think, but definitely not more than 3x daily). So, even here, neither is particularly large.
I think they could do a reasonable focus city if they tried. Between that and DAL... it'd be something that would work mid-con for starters. Then they could figure out something else over time (maybe a focus city out of ORD with some selected p2p routes added onto SFO/LAX/MCO/BOS/JFK, like LAS/AUS/LGA/DCA- VX+B6, if they kept all their slots, could be able to do some things there).

Originally Posted by NYCRuss View Post
B6 is also strong out of BOS.
Doesn't really change the shape of the dumbbell much, though. A route network that's bi-coastal with pretty much nothing midcon is still a bit problematic.

Originally Posted by NYCRuss View Post
As far as the middle of the country, they could try to build up their ORD presence. That may be easier said than done.
No kidding. VX has steadfastly not really done this. They went for the DAL focus city, which has definite limits given the hard gate cap at DAL.
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Old Mar 23, 16, 6:33 pm
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Well, if they merge, they can solve the middle-of-the-country issue by building up STL (or MCI) and rename the company TWA
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Old Mar 23, 16, 8:02 pm
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Originally Posted by radiowell View Post
Well, if they merge, they can solve the middle-of-the-country issue by building up STL (or MCI) and rename the company TWA
One step at a time... but if they do merge, i'd like to see a hub at MCI/STL/AUS. Building a hub is expensive though (as we've seen from DL @ SEA) and i'm not sure even a combined company like B6+VX can do that.
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Old Mar 23, 16, 10:16 pm
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Originally Posted by TheBOSman View Post
I don't think it will happen (definitely not in the next 15-20 years), but some here and in San Antonio like to float around a joint airport located between the two cities. Ignore for a moment that Austin and San Antonio are about 80 miles apart downtown to downtown (by comparison, Dallas and Fort Worth are 30), and thus getting to/from the cities to the airport could be a hassle unless some sort of high speed rail option was built to both cities (think KUL, which is a similar distance from Kuala Lumpur). That's about the only airport that could support a hub plus WN anytime soon in the middle of the country, with a slight caveat towards STL or BNA if both had significant growth.

That said, VX is only 1-2x daily to SFO from here (and doesn't serve LAX at all), and B6 serves many destinations but isn't more than 2x daily on any of them (I don't think, but definitely not more than 3x daily). So, even here, neither is particularly large.
AUS is in the middle of expanding, which will include additional gates. That would give a hypothetical VX/B6 room to grow at AUS. B6/VX would already have LGB, SFO, NYC, BOS, FLL, MCO. They could add additional frequencies to their existing destinations, maybe start AUS-SJU.
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Old Mar 24, 16, 8:15 am
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Originally Posted by NYCRuss View Post
B6 is also strong out of BOS.
Also, B6 would be slightly larger in DC as well, with 4 or slot DCA slot pairs, and then assuming the LAX/SFO-IAD flights.

B6 would inherit the LGA and EWR slots from VX which is of value as well.

I think a B6/VX, as a merged entity, would have to be primarily focused on the coasts for major point of presence, but if one counts the actual domestic markets with a sizeable presence: LAX, SFO, DC, NYC, BOS, MCO and FLL, that is good diversification for the size of a B6/VX merged carrier.
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Old Mar 24, 16, 8:31 am
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Originally Posted by Austin787 View Post
AUS is in the middle of expanding, which will include additional gates. That would give a hypothetical VX/B6 room to grow at AUS. B6/VX would already have LGB, SFO, NYC, BOS, FLL, MCO. They could add additional frequencies to their existing destinations, maybe start AUS-SJU.
My major question would be where would B6/VX fly from AUS that isn't already a major operation for them? By that logic (and I'm not being dismissive here, just noting), AA has the makings of a hub here with mainline services to DFW/ORD/JFK/LAX/MIA/CLT/PHL/PHX (and if not for the perimeter rule we definitely would have at least one flight to DCA daily). And they even have the flight to LHR with BA, which AA has revenue sharing with BA on (and apparently LAX-AUS-LHR is a popular way to get to LHR now from LAX). But AA has no real motivation to start AUS-ZZZ where ZZZ isn't a hub for AA. The major reason to start a mid-con hub would be to better serve all of the other mid-con markets (i.e. STL, MCI, etc.), but B6/VX might just be better off serving those mid-con markets from their coastal hubs, rather than potentially spending a ton of money trying to make something happen at AUS. And WN would likely dump major amounts of capacity if B6/VX pushed too hard.
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