LCC's Virgin Blue and Jetstar hurting as leisure market softens dramatically

[pauly7]

WEAK demand from leisure travellers for domestic flights and intense competition between airlines is expected to crimp earnings for Jetstar and Virgin Blue for the rest of the year.


Apart from consumers spending less on discretionary services, airlines which rely heavily on the domestic leisure market are also suffering from more Australians taking advantage of a strong currency and cheap fares to travel overseas.


Soft leisure market hurts Jetstar, Virgin Blue






Virgin and Jetstar getting smacked around a bit. Funny I haven't seen any major discounting by either really?



QF sitting relatively pretty at the moment whilst they pour money into upgrading all their premium perks in readiness for 'DJ business'.....DJ must be just limping across the line to get their premium offering up to get some margin!! I wonder how they are going to pay for it....

 

[kamchatsky]

I reckon Tiger is doing really well given that their business is very lean (virtually no advertising) and can undercut Jetstar and VirginBlue. A lot of people who used to fly JQ/DJ would fly TT instead.

 

[medhead]

The Adelaide advertiser had a small paragraph to say tiger had a quarterly profit of $1.7 mil.

I'm not sure about there being no major discounting by DJ, at least, as the last sale was $79 adl-syd.

 

[markis10]

I reckon Tiger is doing really well given that their business is very lean (virtually no advertising) and can undercut Jetstar and VirginBlue. A lot of people who used to fly JQ/DJ would fly TT instead.

An airline doing well is not measured by lack of advertising and undercutting its competition, nor is measured by the number of routes its started then stopped or the number of schedule changes at short notice it has. How much repeat business does it have, one could argue that the route changes indicate it has run out of customers prepared to give them a go?

 

[pauly7]

How much repeat business does it have, one could argue that the route changes indicate it has run out of customers prepared to give them a go?

True I guess but one could argue they also just may be optimizing their network adding capacity where there is more demand... I mean DJ shut down routes too - and have indicated that they will pull out of more as they go through their review.

I'd love to hear a person with financial insight on how DJ plan to fund their move upmarket...? Share issue? Go begging to RB? I'm actually quite interested because all indications are it is going to cost a bit!