Virgin Australia flights to Doha

[FlyingKangaroo]

Thanks for the snark

I hadn't realised the cost differential was that great - particularly as EK made a huge song-and-dance about how trans-tasman flying was cheaper than parking all day - but if that's the case then I'd also be questioning how the Doha flights are going to be remotely profitable for VA.

$30K/block hour is a tad high, and indeed would be tough to make money at that rate given it doesn't even yet include fuel and other operational costs.

From my experience drafting such agreements, $15-20K AUD/block hour is a more realistic ballpark figure for an ACMI (aircraft, crew, maintenance, insurance) wet-lease for a wide-body. Qatar may also be giving slightly better terms given their stake in VA.

Still, far more expensive than parking, so EK's argument only would have made sense if they were factoring in assumed revenue to make up for it, plus further potential for profit, which I assume is what they were doing. "We can [potentially] make money flying to/from AKL vs. a guaranteed loss of a few thousand sitting at SYD all day."

 

[Saab34]

but if that's the case then I'd also be questioning how the Doha flights are going to be remotely profitable for VA.

I don’t think that was ever the intention. It’s just a charade for what Qatar wants, is more flights.

 

[Lucass]

I saw in VA’s prospectus that they didn’t expect the wet lease flights to have any “material impact” on their EBIT, so does that mean they are just going to be running the flights at a loss?

 

[FlyingKangaroo]

I don’t think that was ever the intention. It’s just a charade for what Qatar wants, is more flights.

There'd still have to be something in it for VA, even with QR investing in VA to take an ownership stake, as private equity isn't the sort to agree to a setup whereby VA would act as a charity of sorts for QR.

As I suggested, though, if that stake led to favourable wet lease terms and/or potentially favourable dry lease or aircraft sale terms down the track, then short-term profit might not be as material (though again, in PE world, short-term gain is usually all that matters, so I still wouldn't take that for granted too quickly).

 

[aamslfc]

Still, far more expensive than parking, so EK's argument only would have made sense if they were factoring in assumed revenue to make up for it, plus further potential for profit, which I assume is what they were doing. "We can [potentially] make money flying to/from AKL vs. a guaranteed loss of a few thousand sitting at SYD all day."

Yeah, I always figured they made enough revenue from the QF codeshare and generating extra through-pax onto their network to offset the cost of the trans-Tasman flights.

Plus their planes weren't wet-leased so I'd assume the operating costs were also lower.

Agree with your point that there must be something in this for VA/Bain other than a token 77W with fancy seats - guess we'll find out soon enough.

 

[Saab34]

guess we'll find out soon enough.

Unlikely. The real motivations will be in closed door meetings. Stuff that boards and CEOs talk about that remains confidential.

 

[Lucass]

Agree with your point that there must be something in this for VA/Bain other than a token 77W with fancy seats - guess we'll find out soon enough.

Maybe helping VA begin their own LH flights eventually? e.g dry leases

 

[HS-TQE]

Maybe helping VA begin their own LH flights eventually? e.g dry leases

Apart from the announced secondment program (VA crew transferring across to QR to 'train' on the widebody aircraft for a few years), there's no plans for WBs at VA for the foreseeable.

 

[Lucass]

Apart from the announced secondment program (VA crew transferring across to QR to 'train' on the widebody aircraft for a few years), there's no plans for WBs at VA for the foreseeable.

I thought that VA had to 'start' transitioning at least some of the current wet lease flights to dry leases within 3 years as part of the ACCC agreement, then again, I can't imagine QR wanting that to happen

 

[oz_mark]

Apart from the announced secondment program (VA crew transferring across to QR to 'train' on the widebody aircraft for a few years), there's no plans for WBs at VA for the foreseeable.

I would think that they would be putting some thought into what happens in 5 years time onwards.

 

[henrus]

Anyone seen any reviews emerge yet?

Edit: Doh I missed the points hack one

Virgin Australia x Qatar Airways Boeing 777 Qsuite Business Class (Sydney – Doha)

Virgin Australia is making its mark on long-haul, going strong on Day One of its return with the very best Business Class seat available in Australian skies.

www.pointhacks.com.au

 

[FlyingKangaroo]

Anyone seen any reviews emerge yet?

Edit: Doh I missed the points hack one

Virgin Australia x Qatar Airways Boeing 777 Qsuite Business Class (Sydney – Doha)

Virgin Australia is making its mark on long-haul, going strong on Day One of its return with the very best Business Class seat available in Australian skies.

www.pointhacks.com.au

Catering looks excellent. It looks like QR standard which wasn't guaranteed, so that's nice to see.

 

[AIRwin]

Doh

Coincidentally the destination airport

 

[henrus]

Coincidentally the destination airport

That was not on purpose! Can you tell someone’s had a long week and about to fall asleep on a flight to Melbourne.

 

[AIRwin]

Inaugural VA2 from Doha to Sydney Live Flight Tracker - Real-Time Flight Tracker Map | Flightradar24

 

[Lucass]

I don’t understand what will happen when the wet lease period finishes, it will be Qatar’s hard product but virgin crew and service, will Qatar even want that or will the flights just stop entirely?

 

[HS-TQE]

I don’t understand what will happen when the wet lease period finishes, it will be Qatar’s hard product but virgin crew and service, will Qatar even want that or will the flights just stop entirely?

It may depend on the outcome of the secondment project plus many other factors.

In addition, another factor is if Qatar (the country) are gradually granted more rights in the air bilaterals within the 5 year period.