Lack of Longhaul Destination Diversity

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Old Mar 12, 19, 11:47 pm
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Lack of Longhaul Destination Diversity

Since they cut Abu Dhabi (which never made sense to me), VA's longhaul destinations are just LAX (from SYD/MEL/BNE) and HKG (MEL/SYD). Any news on if they're ever gonna plan another longhaul destination besides those two? They could make SFO work based on distance, and certainly have plenty of cities in Asia (Singapore/Tokyo/Shanghai/etc...) that I'd think would have priority for being a destination rather than doubling up on the same cities.

Anyone have any insights into their strategy?
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Old Mar 13, 19, 2:48 am
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Virgin have been very clear on their long haul strategy, although implementation has not always gone according to plan. AUH was always a service to help out EY while they lacked aircraft, to the extent they wet leased the aircraft to EY for AUH-KUL ops for some time, in return EY provided a BNE - SIN leg. They then looked at PER AUH with an A330 and wisely decided with the upguage of competitors equipment it was going to be hard, subsequently EY pulled out as well.

Their latest plans were for China, in partnership with HNA, but the death of the main HNA man and subsequent cash flow issues after the group was buying everything in site has halted proceedings.

I don’t mind their current ops, it’s not risky, and has established good loads while not requiring fleet expansion, and we know that JNB didn’t work, as did a few other sort term plays. IIRC they still drop a big bird into NAN from time to time. Next earnings guidance we are likely to hear of changes as the new CEO settles in.
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Old Mar 13, 19, 5:43 am
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I think that unless VA is rich money wise, what they have so far, is appropriate.
VA is not rich, and if they get too ambitious, they could run out of cash.
At least, if a person had to fly somewhere, there is always the VA codeshare with SQ, or with DL/HA/SA/VS.
Now, if VA was rich like SQ, I would say, maybe VA should fly PER - KUL - LHR on its own 787-900.
But that is just daydreaming.
VA is already really playing with fire, flying to HKG, not so bad if they were making lots of $$$ out of it, but I do fear for the airline, that it might one day (still) go down the loo.
Remember AN/Ansett.

Last edited by AustralianPoochie; Mar 13, 19 at 5:48 am
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Old Mar 13, 19, 5:11 pm
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They don't have any widebodies on order so they really don't have the capacity to add more routes. Their current strategy seems to be using partner airlines for their international routes. Partnering with SQ/DL/VQ gets them decent coverage.
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Old Mar 14, 19, 6:53 am
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Originally Posted by AustralianPoochie View Post
Now, if VA was rich like SQ, I would say, maybe VA should fly PER - KUL - LHR on its own 787-900.
But that is just daydreaming.
LOL, every single Aussie airline that flew to KUL got burned, and that was before Air Asia was around, no chance in hell things have got better!
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Old Mar 14, 19, 1:43 pm
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Virgin's core strategy is to be a domestic/regional airline with Bali, WA & NZ making up its extremities. Its only serious national competition is Qantas/Jetstar (it already owns Tiger). Why dip more than your toes in the bigger pond when there is so much competition there?
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Old Mar 14, 19, 9:34 pm
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Even when VA had AUH, it was only AUH and LAX. 2 is the maximum amount of long-haul destinations VA has served in it's short life.

VA only has widebody aircraft for 2 international destinations (if they serve that destination from more than one AU airport). I don't see that changing anytime soon. What would SFO give them? Far less connecting traffic than LAX.
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Old Mar 15, 19, 9:50 pm
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VA is only starting to recover after years of losses. I would tip that their Long-Haul international division will remain the status quo (LAX/HKG), especially now that the China expansion has grounded to a halt due to the ongoing HNA financial issues. If anything if there's any international long-haul expansion in the short-medium term, the only route with a shot is likely to be BNE-HKG.

Considering it also costs money to join an Alliance (in addition to outside and ongoing expenses e.g upgrading computer systems), plus the bust-up with a former partner of *A which pretty much rules out *A as an option for VA, I would tip VA to remain Alliance free and focus mostly on their primarily JV partnerships with SQ and DL, whilst forming codeshares with other partners.

This will allow them to remain Alliance neutral whilst continuing to source international partners from all 3 Alliances (OW, *A and ST).
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Old Mar 16, 19, 4:19 pm
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Originally Posted by DanV View Post
Considering it also costs money to join an Alliance (in addition to outside and ongoing expenses e.g upgrading computer systems), plus the bust-up with a former partner of *A which pretty much rules out *A as an option for VA, I would tip VA to remain Alliance free and focus mostly on their primarily JV partnerships with SQ and DL, whilst forming codeshares with other partners. This will allow them to remain Alliance neutral whilst continuing to source international partners from all 3 Alliances (OW, *A and ST).
I'm not sure if I follow your point about upgrading computer systems. Aren't VA already linking to SQ (*A) and DL (Skyteam) - both separate booking systems? VA already seems to have access to the same redemption seats that SQ releases to its *A partners (ie. bugger all)
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Old Mar 16, 19, 4:26 pm
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Alliances come with a lot of red tape, including requirements to align reservation systems and protocols. You don't have the same requirements as an independent partner. You don't just need to figure out a way to 'talk' to SQ, you have to 'talk' to every member of the alliance.

Whether VA would need to make big changes to join *A or another alliance, (ie do they already comply with what is needed), I don't know.
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Old Mar 20, 19, 1:42 am
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The Company chair was this week seen flying QF to HK, turns out it was another company paying her fare and her first preference, VA, was sold out in J that day.
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Old Mar 20, 19, 11:57 pm
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Originally Posted by markis10 View Post


LOL, every single Aussie airline that flew to KUL got burned, and that was before Air Asia was around, no chance in hell things have got better!
Indeed. QF and AN tried SYD-KUL back in the 90s, even with MH feed for AN and vice-versa for MH (as AN/MH were JV partners on the KUL route back then) they still couldn't make it work. The Asian financial crisis in the late 90s was a convenient, but necessary excuse for QF and AN to pull out entirely, leaving the non-stop market entirely to MH.

JQ also tried SYD-KUL with their A330s. It was going to be very tough for them against AirAsia X with their large hub. JQ could only get the O&D/VFR low yielding scraps.
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Old Mar 21, 19, 12:40 am
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Originally Posted by DanV View Post
Indeed. QF and AN tried SYD-KUL back in the 90s, even with MH feed for AN and vice-versa for MH (as AN/MH were JV partners on the KUL route back then) they still couldn't make it work. The Asian financial crisis in the late 90s was a convenient, but necessary excuse for QF and AN to pull out entirely, leaving the non-stop market entirely to MH.
Yes, I well recall flying QF on the route back in 1997 or 1998. As I remember it there were direct flights between SYD & KUL daily, but the aircraft then flew a KUL-SIN return leg - no doubt for some operational reason as it was mostly empty whenever I used it. SYD-KUL was a daytime flight which I prefer. As I recall there were also BA flights to Australia that transited KUL, and EK has given up on its (I think) KUL-somewhere in OZ flight. Basically Kuala Lumpur is boring as a destination and for that reason often has cheap airfares - I found the other day that TG's cheapest one-way J class flight is KUL-BKK
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Old Mar 21, 19, 6:10 pm
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I'd be very happy for VA to not be overly ambitious on more long haul int routes. Just keep doing what you have been doing extremely well - extensive domestic network, decent short haul int to NZ and Pacific (VA is excellent here), and a couple of strategic long haul routes. Please do not go bust so I burn all my points (like Ansett)!!!
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Old Mar 21, 19, 7:00 pm
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Originally Posted by stmaus View Post
I'd be very happy for VA to not be overly ambitious on more long haul int routes. Just keep doing what you have been doing extremely well - extensive domestic network, decent short haul int to NZ and Pacific (VA is excellent here), and a couple of strategic long haul routes. Please do not go bust so I burn all my points (like Ansett)!!!
VA doesn't really have the income (and also restricted by the smaller widebody fleet for that matter) to expand further on long-haul international destinations, even if they did wanted to. It'll be a while before Scurrah makes his mark as the new CEO, plus he has take the current JVs / Codeshare Agreements in consideration (e.g not expand into their partner's/shareholder's routes unless agreed upon otherwise).

Saying that, it does seem that VA are content with LAX and HKG for now (and focusing primarily on their partnerships with DL and SQ), considering the Chinese expansion has been halted due to HNA's own financial situation.
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