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Champagne Socialist
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Discussion Starter · #1 ·
http://www.theage.com.au/news/busin...ghts-to-america/2006/05/10/1146940613853.html

Virgin makes a flap for daily flights to America
By Rod Myer
May 11, 2006

VIRGIN Blue will fly directly from Melbourne to the United States if it gets suitable landing rights and aircraft, says chief executive Brett Godfrey.

Mr Godfrey said Melbourne figured in his airline's plans, and a dedicated Virgin Blue team was considering several potential destinations in the US.

Virgin Blue would not consider flying to the US unless it won rights for daily flights. The Australian Government is negotiating with US authorities to allow this because historic agreements allow a second Australian carrier to fly only four days a week.

Virgin Blue has been hit by rising fuel prices, and has reported an 8.5 per cent fall in net profit to $68.2 million for the March half.

But income for Virgin Blue was positive. Revenue was up 6.1 per cent to $936 million and total passenger numbers were up 9.2 per cent to 7.1 million.

The increasing passenger numbers were balanced by a small increase in aircraft numbers of 3.9 per cent.

As a result, the load factor increased from 76.4 per cent to a satisfactory 78.4 per cent, Mr Godfrey said.

Virgin Blue has been caught out by the high fuel prices and has little hedging. Qantas, in comparison, is 30 per cent hedged for 12 months.

Mr Godfrey said fuel costs were still the challenge for the industry. The cost of fuel increased more than 30 per cent and average fuel costs were $US74 a barrel for the half compared with $US55 a year earlier.

Jet fuel was about $US85 a barrel, and at these prices Virgin would not hedge because it believed prices were unlikely to rise further, he said.

Deutsche Bank airlines analyst Jason Bloom said Virgin had achieved a fair result. "I'd argue they've done a good job controlling costs. Fuel, which had a $40 million impact is a fact of life."

Rocketing fuel prices have hit other regional airlines such as Asia's largest, Japan Airlines, which lost ¥47.2 billion ($A550 million) in the March year. Singapore Airlines reported an 8.3 per cent profit fall to $S1.24 billion ($A1.03 billion) in the period.

Forty per cent of Virgin's passengers used automatic check-in kiosks and a small number checked in on the internet. "All those things (have led to) a load factor in the high 70s and we can start extracting a (higher) yield," Mr Godfrey said.

He said Virgin Blue was negotiating with two other airlines to join its Interline international passenger arrangements.

He was happy the ownership of Patrick Corporation, which has 62 per cent of Virgin Blue, appeared to be resolved because it had been "in a situation where who's controlling us depends on which day of the week it is".

Mr Godfrey said he hoped the new owner was a company such as Toll Holdings or Virgin Group. "I don't want us to go to a strategic partner with other ideas for the airline."

Virgin Blue shares fell 6¢ to $1.69 yesterday, cutting the gain so far this year to 7.3 per cent. Over the year Qantas has shed 16 per cent to $3.38.



^ thanks to Muse for the new smiley :lol:
 

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Ansett never got around to flying to the US - it was their plan, but we all know how history went.
They flew to Asia - Japan, Hong Kong, Singapore, Phillipines, Fiji IIRC

It will be good getting Virgin flying there. It would create more competition, and the competition would be from an Australian company.
While I am against Emirates and Singapore Airlines flying between our country and the US, I have no objection to Aussie airlines, and American airways. I'm only against Emirates and SIA because they're state subsidised.
I'd like to see other US carriers also start flights.
 

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Yeah it was definitely an ambition of Ansett to fly to the US, i believe it was pretty much the next international destination to come online until they went down the tube. What a great shame.......
Hopefully DJ get some 777's to fly the route. :)
 

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So what kind of prices are we looking at? Will it be much cheaper at all? Will it be possible too fly to LA and back for under $1500?
 

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Wezza said:
Yeah it was definitely an ambition of Ansett to fly to the US, i believe it was pretty much the next international destination to come online until they went down the tube. What a great shame.......
Hopefully DJ get some 777's to fly the route. :)
IIRC, they were going to take their parent company's (Air New Zealand) rights to fly the SYD-LAX route leasing planes from Singapore Airlines. Of course then they went down the tube before that can be implemented
 

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Only a matter of time before Singapore Airlines get hold of Virgin ( as new owners Toll Holdings dont want them) and get the pacific routes they have always wanted.
 

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I wouldnt be too certain - Toll have actually changed their mind on casting off DJ.
DJ is now making more money than they were when Patrick bought it.
 

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Discussion Starter · #10 ·
http://www.theaustralian.news.com.au/story/0,20867,19660782-643,00.html

Virgin Blue seeks US route fleet
Steve Creedy, Aviation writer
July 03, 2006
VIRGIN Blue has taken a significant step towards launching services to the US by asking aircraft manufacturers for proposals to supply up to five long-haul planes by early 2008.

Australia's No2 carrier issued a request for proposal (RFP) to Europe's Airbus and US rival Boeing late last month.

The move to put aircraft acquisition on a more formal footing is the first positive sign for the trans-Pacific plan since a hiatus caused by the ownership battle between Toll Holdings and Chris Corrigan's Patrick Corp put major decisions on hold.

It also means a further potential blow to Singapore's hopes of changing the federal Government's stance on allowing Singapore Airlines access to the lucrative Australia-US route.

The Government has indicated it is prepared to keep Singapore off the route while an Australian carrier establishes itself because it believes a home-grown operator would better boost tourism.

It is understood the Virgin RFP seeks up to five new aircraft by the first quarter of 2008 but says it would like deliveries to start next year if possible. It also seeks between eight and 12 planes in the longer term.

Spokeswoman Heather Jeffery last night confirmed the airline's continued interest in the US route and said Virgin was examining the economics of different city pairs using its preferred business model.

"Obviously, we need to start detailed examination of different aircraft types but I can't confirm any detail," she said.

The delivery time frame means Virgin will initially be looking at aircraft other than the new Boeing 787 ordered by Qantas and Air New Zealand or Airbus's competing A350.

However, availability and price could still be an issue after robust traffic growth has prompted a flurry of aircraft orders and boosted global demand for new planes.

That growth shows no sign of letting up, despite savage rises in aviation fuel costs. International Air Transport Association figures released last week show passenger demand in May was 7 per cent higher than last year's.

Virgin has had a 10-person team looking at the US route for some time and has been focusing on various city pairs.

Virgin Blue chief executive Brett Godfrey hopes to put a proposal to the airline's new board in September or October.

But there have been few indications of how the carrier will be structured and a launch is still contingent on the new airline being able to operate a minimum daily service. That requirement is still being negotiated between the US and Australia.

Officials say the long-haul carrier will offer lower prices on the Pacific with a product that is neither no-frills nor single-class but "dramatically different" from present offerings.

But it will be unable to use the Virgin monicker because Singapore Airlines, which owns 49 per cent of Richard Branson's Virgin Atlantic, can veto the use of the trademark on international routes.

The decision to issue the RFP comes as Virgin announced on Friday that it would change its end of financial year for the third time in as many years.

The carrier is required under the Corporations Act to synchronise its end of financial year with new majority owner Toll.

The logistics company's end of financial year is June 30 as opposed to the September 30 date adopted under previous Virgin owner Patrick and its original fiscal year end of March 31.

Virgin said it would advise the market once it had determined the date of the company's next annual meeting.

Meanwhile, Virgin arch-rival Qantas has reportedly hired British bank Barclays to help refinance a $1.9 billion loan.

A Barclays official told Bloomberg News that Qantas wanted to cut borrowing costs and extend the maturity of the loan.

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8-12 planes would be enough for roughly 4 daily flights each way, no?
 

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I wonder how long after Virgin gets the rights to the US route that Singapore Airlines buy them? Something for Quaintarses Dixon to think about over his cornflakes .
The chinese/singaporeians play a very long game and this one is far from over baby.
A perfect match Singapore as gets its US routes and a nice little domestic carrier.
 

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I don't think Virgin limited in its percentage of foreign ownership is it?

I doubt that SQ would take all of Virgin even if it could. I think Toll would hold on to some of it. I wouldn't be surprised to see Toll/SQ holding 50% each. But then again i guess it depends on what Toll's strategy is. When they first mounted their takeover of Patrick they planned to retain only something like 10% Virgin. However I don't see why Toll shouldn't try to expand into air freight since they already a big player in road and rail and even shipping, so they may keep more of it. Besides that the remainder is all held by individual and instituitional investors trading on the ASX. A take over would require Toll or SQ to buy those investors out.

I think it takes about three aircraft to maintain a daily rotation between here and the US. So I think 12 aircraft should be good for four daily departures. Who knows what they will be? Could be MEL-LAX/SFO, and BNE-LAX/SFO. I'm not sure what Virgin's plans for Sydney are. Virgin and Sydney airport have had some rather public disputes in the past.

As for Ansett i think the US was the next major destination in their plans. IIRC they flew (at least at some stage) to Nadi, Denpasar, Hong Kong, Taipei, Shanghai and Osaka. I'm not sure but I think they also may have flown to Jakarta and Seoul.
 

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Vic01 said:
I somehow think Qantas will be sharpening the Jetstar International knife to "take care" of VirginBlue!

Why would it? Qantas is already an international airline, Virgin Blue is just starting to spread its wings internationally (bad pun I know).
 

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Tyson said:
As for Ansett i think the US was the next major destination in their plans. IIRC they flew (at least at some stage) to Nadi, Denpasar, Hong Kong, Taipei, Shanghai and Osaka. I'm not sure but I think they also may have flown to Jakarta and Seoul.
They had Nadi (ex Syd, BNE), Auckland (ex Syd), Denpasar (ex Syd, Bne, Mel, Perth and Darwin), Hong Kong (ex Syd Mel), Taipei (ex Syd), Shanghai (ex Syd), Osaka (ex Syd, Bne), Jakarta (ex Syd, Mel), Kuala Lumpur (ex Syd, Mel) and Seoul (ex BNE) at their peak iirc..
 

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tic said:
Why would it? Qantas is already an international airline, Virgin Blue is just starting to spread its wings internationally (bad pun I know).
I think Virgin would most likely be using their "Pacific Blue" subsidiary to fly to the USA.. Pacific Blue would most likely make some of their tran-tasman flights 2-class, as well as 2-class to the USA..
 

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Tyson said:
I don't think Virgin limited in its percentage of foreign ownership is it?

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No - Virgin has no foreign ownership limits. Qantas does as it was a former government owned business, and is seen as the "Flag carrier". Its 'our' airline.
Virgin was founded by a foreigner (Branson).
I suspect eventually Singapore Airlines will buy into Virgin Blue. They wanted 50% of Ansett, but Air NZ used it's 50% stake/control to block SIA joining the team.
The biggest **** up a Kiwi company could ever make IMO. SIA would of snapped up Ansett, then increased it's stake in Air NZ, guaranteeing the survival and profitability of both.
Anyway, Singapore Air currently owns 49% of Virgin Atlantic, so I suspect it is highly possible that Toll might throw the towel in, leaving DJ to revert to majority Branson owned, with SIA owning the rest.
 

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MelbourneCity said:
No - Virgin has no foreign ownership limits. Qantas does as it was a former government owned business, and is seen as the "Flag carrier". Its 'our' airline.
Virgin was founded by a foreigner (Branson).
I suspect eventually Singapore Airlines will buy into Virgin Blue. They wanted 50% of Ansett, but Air NZ used it's 50% stake/control to block SIA joining the team.
The biggest **** up a Kiwi company could ever make IMO. SIA would of snapped up Ansett, then increased it's stake in Air NZ, guaranteeing the survival and profitability of both.
Anyway, Singapore Air currently owns 49% of Virgin Atlantic, so I suspect it is highly possible that Toll might throw the towel in, leaving DJ to revert to majority Branson owned, with SIA owning the rest.
I am hoping that situation comes about sooner rather than later and Singapore Air gives the greedy arrogant Qantas something to think about.

Dont ever forget the conniving of the Howard govt at the urging of Qantas when theyt did very little to stop the Melbourne based Ansett from going under but cant do enough now to prop up their Sydney mates at Qantas.

What comes around goes around and Qantas and COD Geoff Dixon will suffer one day for their bastardy in this dirty business.
I for one never fly with them.
 

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I know Toll was originally going to hand back a large chunk to Branson which they had offered to him during the battle for Patrick. However I have also heard since acquiring Virgin they are reconsidering what to do with it.

As for Jetstar International, they will have to be careful what they do with it because any sign that they are moving on to Qantas routes and QF management will have the unions all over them. Virgin will be aiming to compete with QF I would imagine rather than JQ. I suspect they will stick with the major airports in the major cities aiming for at some of the business market.

MelbourneCity: I know Virgin was founded by Branson but I was under the impression he did so with other people's money. I can't remember how much he owned prior to the float but I didn't think it was 100%. I could be wrong of course if someone has some numbers laying around.

Be interesting if SQ take a significant stake in it. Those two airline's must have cultures thats a world's apart. The tactics of AirNZ in relation to Ansett must be one of the best examples of short-sightedness and egotistical management I can think of. It wasn't just preventing SQ from buying, it was the way they tried to run Ansett once they had full control. Anyway, what's done is done.
 
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