VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

[markis10]

You really have a bee in your bonnet over this Qantas A320 issue. If you actually took the time to read rather than shoot me down you would see every time I have mention it I use the word RUMOUR. Do you know what RUMOUR means? Really, give it a rest, because as it was a rumour there is no way I can prove it and there is no way you can categorically disprove it, because it was just a rumour. However based on scale of accuracy/probability I would put it at about 99%, if you want to disagree with percentage then fine, would love to hear what number you have in mind?

Also I think your timings are out a bit. Qantas announced their take over of AA 737-800 slots in late 2001, with the first one ready in Feb 2002. Jetstar wasn't announced until October 2003 with first A320 delivery in June 2004. Pretty quick don't you think, unless of course the slots already belong to Qantas. So again refer to above RUMOUR.

However when it comes to Jetstar again I think you have shot your response without reading actually what I was saying. I was not talking about Jetstar being the core from a route perspective, but Jetstar the company being formed from the core of Impulse.

Shall I remind you of the history of Impulse and Jetstar? In early 2001 Qantas brought Impulse and integrated them into the QantasLink brand, but still separate from other QantasLink "operators". Remember their boarding passes where they said operated by Impulse? And the routes that "QantasLink operated by Impulse" were running, yep they were mainly leisure routes like SYD-OOL, sound familiar? Then when they invented Jetstar they did it by re branding Impulse and repainting the 717's. Then came new aircraft, and yes the A320's and where did they get delivered and serviced, umm yep Newcastle which is where Impulse was based and where the main Jetstar base is today.

Then of course once Jetstar was finished with the 717's they then returned to Qantas but this time under the control of NJS/Cobham. So as I said Impulse is 100% the core of Jetstar, it was not a new company, so getting back on topic Virgin's purchase of Tiger is very much like Qantas' purchase of Impulse.

Yes my timings are out, I was confusing the additional order of 737s announced at the time of the A320 order announcement with the initial tranche of 738 order. My appologies.

And you make some good points about JQ, in terms of it being core though, the only thing left from Impulse that is relevant to JQ today is their staffing companies (ie their low ops cost) JQ do still utilize the maintenance outpost at NTL but its hardly their main base for such operations, JHAS in Melbourne has done most of the line work locally while Seletar gets the heavy stuff the single aircraft facility in NTL cannot handle, with QF doing the heavies in Brisbane.

Time will tell whether Virgin does the same thing with Tiger as Qantas did with Impulse (shedding planes, routes and assets while keeping the AOC and people structures), they will have to buy the remaining 40% first, which requires funds that could be best spent elsewhere.

I thought the order for A380/A330 aircraft had preceded this, so Qantas was already heading down the non Boeing path?

You are spot in, it was before that, 2000 in fact.

To be fair that's more by design than misfortune - JQ was specifically designed to use secondary ports where possible - a la the European LCC model. Unfortunately Australia only really has two sensible secondary airports for major ports - AVV and OOL, so that was eventually thrown away and they started operating routes alongside QF.

I would agree, although NTL and MCY are also good secondary airports if you live north of BNE/SYD CBDs. East West, Compass Mk1 and Mk2 and Impulse are all examples of a third wedge being squeezed out by a big two, we are just adding Tiger to the list!

 

[ajw373]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

Article in todays paper.

Virgin | Tiger Airlines | Virgin on the roar path

As I said a bit of deja vu really, with the article suggesting Tiger will be used to take over Virgin's routes to leisure destinations such as "...Melbourne and Sydney to the Gold Coast, Sunshine Coast...". Now remind me who was working at Qantas when they purchased Impulse and turned it into Jetstar. Umm yeah a one John Borghetti.

What I find ironic is many of the issues people have today with Qantas, such as Jetstar and the winding back of routes were done with the close involvement of John Borghetti in his various roles at Qantas. He is now the saviour at Virgin, but many of his decisions and the direction he is taking Virgin echo what was done at Qantas years ago. Maybe 2nd time lucky they may work, or because it isn' Qantas people may not care so much.

 

[Dee Thom]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

I would agree, although NTL and MCY are also good secondary airports if you live north of BNE/SYD CBDs. East West, Compass Mk1 and Mk2 and Impulse are all examples of a third wedge being squeezed out by a big two, we are just adding Tiger to the list!

Not forgetting Airlines of N.S.W./S.A./W.A., Air Qld(Bushies),Sunstate, etc., that TAA/Ansett took over, then pulled them into their fold.

Cheers,
Dee.

 

[Major]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

Article in todays paper.

Virgin | Tiger Airlines | Virgin on the roar path

As I said a bit of deja vu really, with the article suggesting Tiger will be used to take over Virgin's routes to leisure destinations such as "...Melbourne and Sydney to the Gold Coast, Sunshine Coast...". Now remind me who was working at Qantas when they purchased Impulse and turned it into Jetstar. Umm yeah a one John Borghetti.

I'm not sure that VA are set to walk away from OOL just yet. They have just spent millions building a lounge and actively marketing their J product.

There are quite a large number VA gold/plats who use OOL on a regular basis and I don't think I am alone when I state that I will never set foot on a Tiger aircraft.

 

[ajw373]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

I'm not sure that VA are set to walk away from OOL just yet. They have just spent millions building a lounge and actively marketing their J product.

There are quite a large number VA gold/plats who use OOL on a regular basis and I don't think I am alone when I state that I will never set foot on a Tiger aircraft.

I think it will end up like the current Qantas/Jetstar arrangement. The bulk of the flights on the leisure airline the rest on the premium airline.

 

[Jousams]

As someone who has actually earned DJ Gold, and flown & paid for 737 J. I have put up with A LOT.

But If DJ winds down OOL services, It's over to QF for me.


Sent from my iPhone using AustFreqFly app

 

[Noob]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

Article in todays paper.

Virgin | Tiger Airlines | Virgin on the roar path

As I said a bit of deja vu really, with the article suggesting Tiger will be used to take over Virgin's routes to leisure destinations such as "...Melbourne and Sydney to the Gold Coast, Sunshine Coast...". Now remind me who was working at Qantas when they purchased Impulse and turned it into Jetstar. Umm yeah a one John Borghetti.

What I find ironic is many of the issues people have today with Qantas, such as Jetstar and the winding back of routes were done with the close involvement of John Borghetti in his various roles at Qantas. He is now the saviour at Virgin, but many of his decisions and the direction he is taking Virgin echo what was done at Qantas years ago. Maybe 2nd time lucky they may work, or because it isn' Qantas people may not care so much.

In my opinion, the writer is clearly speculating.

OOL is obviously a very important market for VA, they wouldn't have invested in a brand new Lounge if their plan was to dump the destination.

 

[eastwest101]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

I agree - there is no way VA would walk away from the Gold Coast. And I cannot see VA walking away from Cairns either, given that they have committed to a lounge in Cairns. Although they may split the Cairns market up with VA doing the CNS-BNE and maybe CNS-SYD routes, and possibly TT doing maybe CNS-MEL and CNS-ADL. if I was guessing.

 

[serfty]

re: VA invests in Tiger, buys Skywest, SQ investment & ACCC Concerns

Well there has been some ACCC concern about this: ACCC may ground Virgin's planned merger with Tiger.

Although the Tiger shareholders have approved: Tiger gives nod to Virgin Aust deal

 

[markis10]

ACCC raises concerns over Virgins tiger takeover

http://www.asx.com.au/asxpdf/20130207/pdf/42cwqcvhtvmxf7.pdf

Increased risk of competition being lowered etc, looks like it may not fly!

 

[AdMEL]

Re: ACCC raises concerns over Virgins tiger takeover

It does also note in bold that the following would swing it in favour:

- if the ACCC concluded that Tiger would likely exit if not approved;and

- if the ACCC were confident of the expansion plans if approved.

My read is 50:50 at the moment and it will likely be approved.

 

[dk4]

Re: ACCC raises concerns over Virgins tiger takeover

I think that there is significant value in the ACCC stopping the acquisition - as if it goes ahead, I think that it is unlikely a third independent player would try to enter the market in the short/medium term, as both airline groups operating dual brand strategies would create a significantly high barrier to entry, which would translate into permanently higher fare prices.

Blocking the deal, and allowing TT (Tiger Airways Australia) to collapse may have an immediate short term impact on ticket prices, but in the medium term, IMO, it would encourage a possible third entrant, one that would have been unlikely to start up should Virgin get into bed with Tiger. Even just the possibility of a third entrant, will help keep ticket prices more in check at the two incumbents in the medium term.

 

[eastwest101]

Re: ACCC raises concerns over Virgins tiger takeover

I think that there is significant value in the ACCC stopping the acquisition - as if it goes ahead, I think that it is unlikely a third independent player would try to enter the market in the short/medium term, as both airline groups operating dual brand strategies would create a significantly high barrier to entry, which would translate into permanently higher fare prices.

Blocking the deal, and allowing TT (Tiger Airways Australia) to collapse may have an immediate short term impact on ticket prices, but in the medium term, IMO, it would encourage a possible third entrant, one that would have been unlikely to start up should Virgin get into bed with Tiger. Even just the possibility of a third entrant, will help keep ticket prices more in check at the two incumbents in the medium term.

Some interesting thoughtful comments there. Its just speculation, but if the Tiger/Virgin deal is blocked, then you would expect that VA or maybe SQ could threaten to throw all their toys out of the cot by closing down Tiger. This may or may not be an idle threat - would be interesting to see.....

In my own opinion though, I think the ACCC is more likely to approve the deal than not, so its a bit academic at the moment.....

 

[whatmeworry]

Re: ACCC raises concerns over Virgins tiger takeover

After all that investment and coming back from being grounded, I can't see SQ pulling the plug if they are denied to sell Tiger.

 

[samh004]

Re: ACCC raises concerns over Virgins tiger takeover

I saw this when reading another story ACCC demands could scupper Virgin

Loved this comment from FC,

Flight Centre yesterday backed Virgin's takeover bid, arguing it would be a positive move to have an alternative to Jetstar in the form of Tiger. Virgin, it said, has all-but "moved out" of the low cost space.

Tiger already exists... so it shouldn't matter who owns them, if they're there, you can use them

Perhaps they think things will change under Borghetti?

 

[markis10]

Re: ACCC raises concerns over Virgins tiger takeover

Perhaps they think things will change under Borghetti?

Of course they have to change, no company takes over another company and leaves it alone!

 

[samh004]

Re: ACCC raises concerns over Virgins tiger takeover

Of course they have to change, no company takes over another company and leaves it alone!

I should have said maybe they know things we don't know... The argument that they'd be a good competitor only under virgin is laughable though. They're great now.

 

[medhead]

Re: ACCC raises concerns over Virgins tiger takeover

I should have said maybe they know things we don't know... The argument that they'd be a good competitor only under virgin is laughable though. They're great now.

Or they know what we know - that under VA involvement the TT fleet will expand from 10 aircraft to 35 aircraft (well that's the promise). At the moment tiger are a fair insignificant bit player, that provide few options for travellers. Expanded fleet changes that.

 

[openseat]

Re: ACCC raises concerns over Virgins tiger takeover

If the ACCC block the sale and Tiger is closed down I think there would be an argument that QF divest itself of JQ. The combined QF-JQ might against VA will end in an effective one-carrier nation.

 

[Dee Thom]

Re: ACCC raises concerns over Virgins tiger takeover

I should have said maybe they know things we don't know... The argument that they'd be a good competitor only under virgin is laughable though.

I was under the impression that TT would be a stand alone company after Virgin takes them over and injects some cash for growth, that way they won't be influenced by a full service operator.

Cheers,
Dee.