Deal to extend V Australia losses

[jakeseven7]

VIRGIN BLUE'S long-haul offshoot, V Australia, is expected to run at a loss for longer as a result of concessions made to US regulators who had opposed its tie-up with Delta Air Lines.


After the US Department of Transportation flagged it would knock back the tie-up, Virgin Blue and Delta have guaranteed that they will not reduce services on the Australia-US route for two years.
The likelihood of the airlines gaining approval in the US has also improved after the federal government intervened last week to lobby on behalf of the airline.

But Macquarie Equities analysts have warned that the concessions will make it harder to turn V Australia around, which has proven to be a burden on its parent since launching services to the US early last year.

http://www.smh.com.au/business/deal-to-extend-v-australia-losses-20101022-16xt7.html

 

[stuartfaz]

It may well extend their paper losses for a few more years, but it's the only way to ensure their long-term viability.

Keeping their planes operating on the only routes that have seen success so far rather than chucking them on seasonal routes like JNB and HKT can't hurt either.

 

[pauly7]

After the US Department of Transportation flagged it would knock back the tie-up, Virgin Blue and Delta have guaranteed that they will not reduce services on the Australia-US route for two years.

Aren't they basically at bare minimum frequencies anyway??
(as in to offer a decent customer option v UA and QF)