Virgin buys 20% of Air Asia X

Discussion in 'Open Discussion' started by stuartfaz, Aug 10, 2007.

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  1. stuartfaz

    stuartfaz Active Member

    Jan 9, 2007
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    It's been speculated for quite a while, and made official today.

    Bloomberg.com: U.K.

    I am led to believe that the airline will be marketed as a Virgin Group airline, and may even be renamed (Virgin Asia?)

    I wonder what implications (if any) this has on the other Virgin airlines.
     

  2. futaris

    futaris Established Member

    Jul 21, 2006
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  3. benhadi

    benhadi Member

    Jul 9, 2007
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  4. BiziBB

    BiziBB Member

    Aug 14, 2006
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    I wonder when fares will be available? The Air Asia / X websites don't have OOL as an option yet or any mention of Australian destinations, despite the stories in the news media.

     
  5. NM

    NM
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    Aug 27, 2004
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    Because Jetstar and Virgin Blue employ a significant number of Australian staff and pay them Australian wages. And I am not just talking about cabin crew - the labour costs for Jetstar and Virgin Blue will be significantly higher than those of Air Asia X, resulting in a higher cost base.

    And its not just labour costs that are higher for a company based in Australia than for one based in say, Malaysia. There is the cost of providing office space and associated professional services (such as IT) etc.

    Can you image the outcry if Jetstar or Virgin Blue tried to move their call centre to Malaysia, or if they tried to move all their back-office staff and facilities off-shore, or tried to employ 100% of their cabin crew from a low-cost labour market?

    Thankfully those things are unlikely to happen. But we need to understand that opening up more competition from foreign carriers may have the effect of providing lower fares, but for our local carriers to compete with these new low fares they need to reduce their baseline costs as well - and that generally will result is the removal or reduction of services we have previously enjoyed.

    Competition from foreign airlines from low-cost labour markets is not always a good thing in the long term.
     
  6. benhadi

    benhadi Member

    Jul 9, 2007
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    I think that is only partially true. In order for a foreign airline (or any other foreign business) to be given permission to enter the local market, they need to satisfy certain requirements, more specifically it needs to be beneficial to the local economy. In this case, it needs to create certain number of local employment opportunities. The overheads for that would be the same as for local-based carriers. Granted that foreign-owned and operated airlines do have a lower overhead, they are also operating largely in their own local market, thus income-expense for them would be the same ratio as a local company i.e. Jetstar and Virgin. They spend less in their home market, but the earn less too.

    I am of course over-simplifying it. I'm no economist, but it seems logical. If my hypothesis is correct, Airasia X should earn a lot more money from their western-destinations compared to what Jetstar can from their asian-destinations.

    Anyone have any opinion on that?
     
  7. d15.in.oz

    d15.in.oz Member

    Nov 28, 2006
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    #7 d15.in.oz, Aug 10, 2007
    Last edited: Aug 10, 2007
    i.e. CASA Civil Aviation Safety Authority regulations, just like Australia's airlines.
    Only if they want to fly into SYD, MEL, BNE or PER! i.e. foreign airlines wanting to operate to; e.g. OOL, NTL, AVV, ADL - do not have red tape to struggle through. (*Free Trade Agreements may also effect decisions, e.g. Singapore, Thailand, NZ.)

    We need to wait and see if it CAN survive?!!

    (Just ‘cause Sir Richard gets involved, doesn’t mean instant success for an airline – Virgin Express is no longer with us & Virgin Atlantic might not be either, if Singapore Airlines had not bailed it out! Perhaps, we can speculate about the fate of Virgin Blue, had Ansett not collapsed!)
    Someone might want to mention that to Malaysia Airlines & Velocity!
     
  8. pauly7

    pauly7 Established Member

    Dec 8, 2004
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    Well Virgin Blue already have some of their call centres overseas, in the phils i think if you haven't guessed by some pretty funny accents when you try and change bookings with them etc....
     
  9. stuartfaz

    stuartfaz Active Member

    Jan 9, 2007
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    I've never had a funky accent ringing Virgin Blue.

    I think their guest contact centre is based in Bris Vegas, with the rest of the company. Jetstar's is outsourced to a Melbourne call centre company (SalesForce) and I'm not 100% on Qantas but I think theirs is in Melbourne too.

    The only accents I've had are trying to ring local offices of US airlines. I needed to replace my UA MP Card and it sounded like i got connected to Bangalore.

    One thing in these articles that caught my eye

    Is this Sir Richards idea or DJ's idea? Or maybe something for Virgin Aqua? Because surely DJ moving to AVV is anything but a good idea...
     
  10. fortymilliondaggers

    May 1, 2007
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    ...now bring on the ticket sales!
     
  11. jakeseven7

    jakeseven7 Active Member

    Sep 9, 2005
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    Virgin Blue definitely has most of its calls serviced in Australia but yes it does send some calls overseas, somewhere in Asia (can't remember where specifically).

    I thought QF had a centre in Tas actually...
     
  12. dajop

    dajop Senior Member

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    I've read in the Virgin Blue magazine (staff profiles section), one of the staff members being interviewed stating one of her best experiences with the airline was helping to set up the Virgin Blue call centre in the Philippines. From what I gather it is for overflow calls (can't remember where I read that), and I have definitely spoken to staff on the Virgin Blue line with a distinctive Filipino accent (an Asian type accent with an American twang).
     
  13. Standby

    Standby Active Member

    May 25, 2006
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    DJ overflow calls gor to Manilla.this was confirmed to me after I hung up on their res agent because he couldnt understand me (one of the reasons i gave Citibank the flick).I rang back and definitely got a BNE based res agent who openly,although embarrased ,that they sent calls outside OZ.
     
  14. futaris

    futaris Established Member

    Jul 21, 2006
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  15. JohnK

    JohnK Veteran Member

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    I have been trying to look for cheap airfares and I still don't see any mention of Australia destinations on the website.

    If flights are due to start in October this does not leave a lot of time to purchase in advance.
     
  16. fortymilliondaggers

    May 1, 2007
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    They mustn't have gotten the paperwork in on time :p
     
  17. moa999

    moa999 Senior Member

    Jun 23, 2003
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    and no doubt trying to avoid the embarrasing (and expensive) Viva Macau situation


    underpromise and overdeliver
     
  18. JohnK

    JohnK Veteran Member

    Mar 22, 2005
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    Speaking of Viva Macau, what has happened?

    I have been looking at some of their airfares MFM-SYD return and it prices well over A$1200 for travel just before Christmas returning around Easter. For the same dates BA WT+ BKK-SYD return is around A$1400.

    The choice seems very simple. If not for sale airfares then LCCs appear to be as expensive as full service carriers.
     
  19. fortymilliondaggers

    May 1, 2007
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    I agree - I looked at VM's prices for a Jun/Jul 08 roundtrip and not too appealing.
     
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