Virgin Australia going back to "its roots" ?

[jase05]

If they are going to back "to their roots" well good on them! It just confirms what I have been saying for a couple of years. VA is an airline with an identity crisis.

After being VA Platinum for over 5 years and seeing declining service, A330's taken off East-West, deterioration of lounge food, drinks and service I moved back to QF 18 months ago. Best decision I have made. QF aren't the best in the world but in the Australian market their product is probably the most consistent.

I wonder if they are going to get the cabin crew to start telling silly jokes before the safety briefing like the "good old days" of VB.............

Obviously it all is individual tastes and needs but for us VA wipes the floor with QF domestically and since moving the bulk of our Dom flying over to VA several years ago I’d hate to return to the opposition. Yeah I agree the lounges can be hit or miss food wise but the onboard meals and service in J is quite literally miles ahead of QF IMO. I do hope VA can sort their issues out as the last thing we need is a monopoly on Dom J

 

[dajop]

Lot of talk about what they need to do with domestic. I'm guessing it doesn't make as much money as it could, but if you look at last year's annual report, Velocity + Domestic were making money. International and Tiger were losing money.

 

[Bagpuss]

Obviously it all is individual tastes and needs but for us VA wipes the floor with QF domestically and since moving the bulk of our Dom flying over to VA several years ago I’d hate to return to the opposition. Yeah I agree the lounges can be hit or miss food wise but the onboard meals and service in J is quite literally miles ahead of QF IMO. I do hope VA can sort their issues out as the last thing we need is a monopoly on Dom J

Totally agree, my partner used to flew VA and QF and always rated the VA hard and soft products vastly superior to QF.
I recently had a rare QF experience which included access to the lounges (Perth and Sydney) and I couldn't stand the lounges whatsoever, especially be frowned every time I went up for an alcoholic drink. A least with Virgin wines and champagne can be self poured.
Then again, each to their own.

 

[Bagpuss]

Lot of talk about what they need to do with domestic. I'm guessing it doesn't make as much money as it could, but if you look at last year's annual report, Velocity + Domestic were making money. International and Tiger were losing money.

Very true, VA domestic is very profitable but like anything could be more profitable.

International and Tiger are the headaches.

 

[HS-TQE]

1) Shut Tiger

2) Un bundle J Class and offer a) seat only b) seat + catering + bag

3) Create a 'bogan' class Y offer and offer a) seat only, no seat selection, zero flex, and no FF privileges (nothing) or earning capacity - literally just the seat only, down the back and fight JQ there. Corporates won't book that.

4) Maintain other Y bundles because if they unbundle too much QF will crucify them (again) with corporate pax

5) Full strategic review of VAi and be prepared to pull some routes / return planes if required. Focus on domestic.

6) Try and begin building relationship again with NZ (slowly). NZ are a natural enemy of QF and QF just has to flick a switch to inflict NZ maximum pain and NZ know it, so a more 'trustworthy' long term partner like VA now the absolute joke leaders of JB and Chris Luxon and their school yard fights are history.

1. Agree with shutting Tiger

2. Should be the full flex J fare (all inclusive) plus the "budget J" unbundled fare with bag included as the default.

3. This should be in combination with point 1. The "basic economy" fare could be named in a similar theme to its current Tigerair LCC.

4. Agree with maintaining other Y bundles

5. Agree with that one, however I do recall it was Short Haul Int'l is where the bigger losses are (plus HKG due to startup costs PLUS the failing JV with HX), whilst LAX was pointed out on another forum (airliners) as "barely breaking even".
LAX and HKG are tied in their partnerships with VS/DL, and with the upcoming VS JV, aren't likely be cut anytime soon. In addition, as pointed out the 77W fleet (except 1) is owned, whilst the A330 fleet is leased.

What could be done is revising the DL/VA USA JV when it comes up for renewal. Depending on fleet availability on Delta's end, one example could include VA concentrating on 2 of the major routes (e.g SYD/BNE (or MEL)-LAX) whilst passing off MEL (or BNE) to LAX to DL.

6. It would be a while before NZ and VA will be working with each other again. Plus some at NZ at the time of the NZ/VA bust-up between CL and JB may had agreed with Luxon's alleged demands to "give up all international" and feed everything into NZ.
All of the other shareholders of VA at the time of course told Luxon to "take a hike".

One of Luxon's last directions as someone posted here previously was integrating NZ's FF with QFs, ensuring that the QF/NZ codeshare agreement runs the full 5 year term until the end of Q3 2023.

 

[Tallfont]

I totally agree. In my instance I make 10-12 flights PER>BNE>POM return per year in J.

VA was always A330 between Perth <> Brisbane, it's now B737. BNE<>POM was B737, now it is an Alliance F100.

I agree that the VA Business product (at least on the A330) is far better than QF A330 in seating, service and food and beverages.

 

[Bagpuss]

What could be done is revising the DL/VA USA JV when it comes up for renewal. Depending on fleet availability on Delta's end, one example could include VA concentrating on 2 of the major routes (e.g SYD/BNE (or MEL)-LAX) whilst passing off MEL (or BNE) to LAX to DL.

When Virgin pulled off MEL <> LAX so it could have daily BNE <> LAX, SYD <> LAX and SYD <> AUH there was a rumour that Delta was going to fill in the MEL <> LAX route.

Instead we have the current scenario of VA B777 flying.

I wouldn't be surprised if the issue centres around both airlines wanting to fly into SYD.

 

[Saab34]

I fly Syd to Cairns a bit and the last one I did was a Monday night Cairns to Syd. This is a trend I’m also seeing often. Jetstar went out with 210 bodies at the same time and Virgin only 75. Largely our flight was corporate travellers only. There was essentially nobody seated past the exit rows. This is the lost traffic they need to claw back, it’s the leisure passenger. How do they do it? Well Alaska and JetBlue are shortly launching it. Delta has it. It’s the Economy Basic Product and is about $20/$25 cheaper per leg.

Tiger is a large distraction from the core business when taking into account its earnings potential. Even when looking at potential long term earning potential it’s just token.

 

[juddles]

Pulling back from the specific focus on things like Tiger, I see in the overall Australian market the need/space for at least two real airlines. Qantas will "always" be there, so the second airline needs to do best what Qantas does least best.

I have never flown Virgin. Ever. But I get a sense that staff are a bit different - and this truly means that that component of travel - the interaction between pax and crew - seems to me to be an area that Virgin could promote.

On AFF there are endless instances of someone getting the shiites with one airline, and vowing to move. But in my experience here, this flow is about identical in each direction. In this particular case I believe in the company going hard on their strengths - not cutting weaknesses. I think that every move towards making Virgin a LCC airline are mistakes. Australia has a big dollar spend in business/corporate travel. Essentially that is the cream. Alienating those that want cream will take Virgin from being a serious competitor to QF to a shadow that is now actually competing with Jetstar, not QF.

And QF will clean them up.

 

[dajop]

I think that every move towards making Virgin a LCC airline are mistakes. Australia has a big dollar spend in business/corporate travel. Essentially that is the cream. Alienating those that want cream will take Virgin from being a serious competitor to QF to a shadow that is now actually competing with Jetstar, not QF.

I think there's room, as we see elsewhere in the world, to participate in both LCC and corporate markets with the same brand. Qantas does this with two brands, but I don't think VA have that luxury. They could introduce, as other point out, a basic economy type of fare. But they need to be smart - don't let the word "economy" anywhere near the product, call it "budget class" or " tiger class" (!) , to reduce appeal to corporate travellers.

In terms of ancilliary revenue, there's a lot more they could do too, without suffering vs Qantas. Having some good buy ups - even pre-ordering business class type meals for a fee on longer sectors could add to the revenue stream and appeal of flying VA (just print "Sky Cafe by Virgin" on the tax invoice, not "Virgin Australia", so corporate travellers claim it as a meal expense not an add-on to the flight) . I also wonder if they've ever contemplated putting some superior cooked-to-order/ pay-for-dining options into lounges (probably as concessions), to supplement earning and enhance the product.

 

[Saab34]

They can’t go back to the LCC world it’s too late. They have spent too much getting to this point and going back would cost ALOT. Companies like Target, Myer, Bigw have learnt the hard way of multiple transformations over the past decade resulting in no result and billions wasted.

Cost cutting, fare class overhaul, and repositioning of network is about all they can do.

Short Haul International 737 is a problem. I understand it’s quite hard to admit defeat but half the Tasman needs to go it’s just red ink.

 

[juddles]

BTW, the single most important reason I have never dabbled in Virgin is that IMHO, any airline that is not in a world alliance is a peanut. I assume many have reasons for it not happening - I post as an acknowledged armchair warrior here, but how the F can Virgin think it will be the competition to QF when they are not in Star Alliance?? That reality would be a huge change.

 

[jase05]

BTW, the single most important reason I have never dabbled in Virgin is that IMHO, any airline that is not in a world alliance is a peanut. I assume many have reasons for it not happening - I post as an acknowledged armchair warrior here, but how the F can Virgin think it will be the competition to QF when they are not in Star Alliance?? That reality would be a huge change.

From a purely selfish POV no to Star Alliance. If VA does join an alliance please let it be SkyTeam

 

[juddles]

From a purely selfish POV no to Star Alliance. If VA does join an alliance please let it be SkyTeam

Reasons? I ask this as someone who due to their travel patterns has only ever considered One World and Star Alliance. Who are the significant Skyteam players that have flights to Australia?

 

[jase05]

Reasons? I ask this as someone who due to their travel patterns has only ever considered One World and Star Alliance. Who are the significant Skyteam players that have flights to Australia?

We are regular travellers to Bali and Garuda is our best option to DPS. We have flown with China Airlines and Vietnam Airlines several times and have even had a couple of flights with China Eastern and Xiamen. Delta and Korean also fly to Australia.
SkyTeam gives us a good mix of airlines to get to Asia which is where the bulk of our International travel is

 

[juddles]

We are regular travellers to Bali and Garuda is our best option to DPS. We have flown with China Airlines and Vietnam Airlines several times and have even had a couple of flights with China Eastern and Xiamen. Delta and Korean also fly to Australia.
SkyTeam gives us a good mix of airlines to get to Asia which is where the bulk of our International travel is

At the end of the day I think Virgin (or any other airline) is always going to be playing sheer survival without membership of one of the major alliances.

 

[jase05]

At the end of the day I think Virgin (or any other airline) is always going to be playing sheer survival without membership of one of the major alliances.

Tend to agree but I have no idea what the cost would be to join an alliance or even if they would be accepted into one. You also have too many owners with fingers in the pie that are looking after their own self interests.

 

[juddles]

The fact that Virgin has not nailed an alliance membership is a specific point, but in business I tend to believe in experts opinions far more than my own gut feelings. And the opinions of those experts is always reflected in a single detail - share price. Using this metric alone, the writing is not just "on the wall", but it is in huge capitals. QF is doing well. VA is a basket case in palliative care.

 

[HS-TQE]

BTW, the single most important reason I have never dabbled in Virgin is that IMHO, any airline that is not in a world alliance is a peanut. I assume many have reasons for it not happening - I post as an acknowledged armchair warrior here, but how the F can Virgin think it will be the competition to QF when they are not in Star Alliance?? That reality would be a huge change.

Virgin Australia's only choice of Alliance is SkyTeam of the moment, VA burnt bridges with Star Alliance with the NZ breakup. Alliances also cost a lot of money to join, which VA doesn't have.

On top of that, VA's USA JV partner (and BFF) is DL which is reason enough for UA to use their veto/block rights. NZ would also use their veto rights in the (unlikely) case of VA sending in application for many reasons.

And VA very recently applying for a JV with VS (in addition to their existing Delta JV, making Star Alliance very unlikely.

If anything there's a better chance of VA becoming "Delta Australia" with Delta getting major control than VA joining Star Alliance

The major shareholders sometime back told NZ to take a hike after NZ management allegedly demanded VA "go back to being a domestic feeder for NZ and *A.

 

[pauly7]

The major shareholders sometime back told NZ to take a hike after NZ management allegedly demanded VA "go back to being a domestic feeder for NZ and *A.

Which doesn’t sound like such bad advice now actually . VA would probably be in a far stronger position.

And also NZ left under their own steam, they weren’t ‘told to take a hike’. Their parting gifts were introducing even more complication into the VA share registry and an alliance with QF