Article: Virgin Blue flights to US lower cost...

[Yada Yada]

Virgin Blue flights to US lower cost, but keeps frills
Steve Creedy
February 10, 2006

VIRGIN Blue says its proposed US service will lower the cost of travel across the Pacific, but it is not planning to launch a no-frills services.

While it is still waiting for federal Government confirmation that Singapore Airlines will not be allowed to fly the route, it has put together a team to work on the concept and has been talking to plane manufacturers.

It believes it can launch the airline in less than two years if it gets the green light from the Government.

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Interesting development. This would really put some pressure on the SYD-LAX prices.

 

[NM]

Interesting development. This would really put some pressure on the SYD-LAX prices.

While I support the idea of Dj flying Trans-Pacific, and I think it will be a good thing for all concerned, I do not hold much expectation of this meaning lower airfares across the board.

DJ stated they do not have plans for a no-frills Trans-Pacific operation. And in my opinion the fares at the lower end of the economy range are good value now. QF makes their money out of good yields in the premium cabins and flexible economy fares, and I don't see a DJ startup affecting that too much.

And in my opinion, lower air fares Trans-Pacific is not necessarily a good thing all round. There are some downsides, especially around the impact that reduced fares has on reduced profits and hence the target to reduce costs base with the associated reduction in service levels. Some may say the service levels are poor now, but I shudder to think how increased competition at the lower end of the market and price point will affect the travel experience. Increased competition and lower fares are not always a good thing for the customer in the long term.

I hope DJ make a success of it, and that they introduce a product that brings good competition based on good service rather just based on price. VS has found success with this model and I believe it is the best model for long-haul routes. Introduction of some inovation (well compared with current QF model) such as Premium Economy on a 3-class aircraft (Y, Y+, J) would drive success through the right type of competition in my opinion.

 

[Yada Yada]

I probably should have been a little clearer with my comments. My hope is that DJ have a J-class cabin in the proposed service and that fares in this class are more competitive. This is where the competition seems to be lacking, IMO.

In addition, QF left the skybed upgrades on their pacific route aircraft until last (or almost last) for a good reason - there was no pressure from competitors to do so. A daily service by DJ with well appoointed new aircraft would be great.

As you say, a premium economy option would be very welcome and likely to be quite successful.

 

[serfty]

... And in my opinion, lower air fares Trans-Pacific is not necessarily a good thing all round. There are some downsides, especially around the impact that reduced fares has on reduced profits and hence the target to reduce costs base with the associated reduction in service levels. Some may say the service levels are poor now, but I shudder to think how increased competition at the lower end of the market and price point will affect the travel experience. Increased competition and lower fares are not always a good thing for the customer in the long term. ...

True, I have travelled across the Tasman more than 20 times in the last two years or so and have seen a steady decrease in the service offerings in flight. This is true for both J and WHY. :roll:

Also, the QP at AKL seems to be running under a tighter budget these days.

 

[Kiwi Flyer]

Another trot off the line "we're coming to trans-pacific soon" - they've been saying that for a while now without actually doing anything. :evil:

serfty - agree with you there, but the rot started in a few years earlier I think (around the time DJ and EK announced they would fly trans-tasman).

 

[NM]

I probably should have been a little clearer with my comments. My hope is that DJ have a J-class cabin in the proposed service and that fares in this class are more competitive. This is where the competition seems to be lacking, IMO.

In addition, QF left the skybed upgrades on their pacific route aircraft until last (or almost last) for a good reason - there was no pressure from competitors to do so. A daily service by DJ with well appoointed new aircraft would be great.

As you say, a premium economy option would be very welcome and likely to be quite successful.

Very true. I can't imaging anyone starting non-stop trans-Pacific without a business class cabin.

They really have a choice of just a few aircraft types, being 747 (unlikely), A340 (my guess), 777 or wait for A350/787. And I would expect to see VS-style coffins up front. In fact, they would almost start the service with a wet-lease from VS.

Not sure what the restrictions on codesharing may be, but would be interesting if VS was then allowed to codeshare the route to close their loop as LHR-HKG-SYD-LAX/SFO-LHR. But I expect the rules do not permit codeshares of non-qualifying airlines.