Virgin thrown a lifeline for delayed launch of Tokyo-Haneda flights

HS-TQE

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Not that surprised, but will they be able to source some second-hand 787s for lease as Bain previously floated?

And the IASC remains lenient on when the airlines pick up those Tokyo flights, with a spokesperson telling Executive Traveller "the Commission will consider any further requests from Qantas and Virgin to extend the date of utilisation of their capacity allocations on the Tokyo-Haneda route beyond 31 October 2021 having regard to all relevant information before it at that time."

In other words, Virgin's placeholder at Tokyo remains safe for now, rather than being in a 'use it or lose it' situation.

A Virgin Australia spokesman told Executive Traveller that the airline "has retained its capacity allocation in Tokyo Haneda with the intention of commencing Australia-Japan services in the future."

 

henrus

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Not that surprised, but will they be able to source some second-hand 787s for lease as Bain previously floated?
It's clear Virgin has some interest if they're still trying to hold onto the slots. They wouldn't spend money submitting to the ACCC if they didn't see a benefit in doing so. Hopefully the IASC gives a blanket slot extension to 31 October 2022 (Northern Winter schedule start) which would almost give all parties a year to grow towards operating using all slots.

Regarding 787s who knows... Worth pointing out that some of the 777 and A330's are still lurking around in VA colours so there may be an opportunity to get them back at cheaper prices.

At least all the VA signage (check in/boarding etc) is still at Haneda airport ready to be used 😂
 

HS-TQE

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There are 2 VA liveried A330 left in Australia. XFD is in storage and likely be returning soon, and there's the story of VH-XFE been stuck in PER for a long time and basically unflyable atm.

There's 2 VA 77Ws left but that's in long term storage and registered to a shell company of VA.
As there's no crew (unless if the bank/mortgagers are planning to take it back), chances of the 2 remaining 777 being reactivated is very low.
 

AustraliaPoochie

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Would it be cheaper for them to lease a/two A350/B787 whereby they don't have to pay any "ownership" charges, ie, they just pay the owner hourly use charges, and fuel expenses, cost of lease, etc, (like people who work in contracting, not actually being employees of a place, but still having access to a place, and still indirectly being paid from a place).
Maybe in the past, VA was too ambitious, in going to too many places, AUH/LAX/etc, ...
Maybe if this time, they just did HND, and fed their flyers onto NH (ANA) to fly to other parts of Asia close by... oh, and hopefully that if they do this, that they will give at least a 3 hour time slot for transit from their incoming int pax to get to NH Japan domestic flights.
 

odysseus

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Would it be cheaper for them to lease a/two A350/B787 whereby they don't have to pay any "ownership" charges, ie, they just pay the owner hourly use charges, and fuel expenses, cost of lease, etc, (like people who work in contracting, not actually being employees of a place, but still having access to a place, and still indirectly being paid from a place).
Maybe in the past, VA was too ambitious, in going to too many places, AUH/LAX/etc, ...
Maybe if this time, they just did HND, and fed their flyers onto NH (ANA) to fly to other parts of Asia close by... oh, and hopefully that if they do this, that they will give at least a 3 hour time slot for transit from their incoming int pax to get to NH Japan domestic flights.

The economies of scale of doing a single international airport are problematic. You then have the fixed overhead of international operations just for one port, and cost of dedicated crew trained on that aircraft type but get very low utilisation from it. It's a variation on the old issue of having two many different aircraft type in your fleet. (You can also completely wetlease the aircraft and crew, which avoids the crew training cost, but then your operating expenses become very high, you lose brand identity, and you still have the other fixed costs on top, hence why no other airline does this as a permanent approach.)

And that's also aside from the market detriment of just having a single international port - you're not top of mind from most customers as they're not aware of international operations and don't get much benefit from international code-share and partner agreements so it's a struggle attracting customers. This was part of the issue with HKG where they were going against two stronger competitors; HKG residents preferred Cathay, Australians defaulted to Qantas and VA had to market heavily to try to win them over. Which they were doing well in, but still had a disadvantage. With Japan, Japanese will still favour ANA, Australians will still favour Qantas, and VA will have to compete against those established competitors who have network, loyalty program and size advantages.
 

HS-TQE

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Would be expensive to set up for one daily long haul a day with 1 (or 2) Widebodies.

LAX worked for most of its tenure, as one it was a Joint-Venture with Delta (started from the Brett Godfrey CEO era) and both carriers shared the costs and profits across their flights (4x Daily overall), and second, this was due to VA having multiple flights across 2/3 cities (2.5 dailies) on their 5 77Ws.

LAX was only finally optimised when they made SYD and BNE daily to LAX (Also replaced/right-sized PER-HKT and SYD-NAN with 738s), and axed the short lived MEL-JNB due to lack of ETOPS330.
 
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jakeseven7

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. This was part of the issue with HKG where they were going against two stronger competitors; HKG residents preferred Cathay, Australians defaulted to Qantas and VA had to market heavily to try to win them over. Which they were doing well in, but still had a disadvantage.

VA1 were not doing well in HKG, it never made any money.

Honestly I think VA2 should just forget any international long haul and just concentrate on signing up as many good FF partners as possible to create the best virtual network they can.
 

HS-TQE

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I would think the current management would learn from JB/SQ/EY et al's mistake of 'allegedly' declining partnerships in favour of their own businesses, which is understandable as former part-owners, but at the detriment of everyone else, as per the reported 'insider' stories across the forums of AC and NH approaching VA mk 1 for partnerships but having to decline per SQ/EY's 'orders'.

Fortunately for the pre-SQ/EY/et al FF partnerships/JVs (e.g DL, VX, etc) they are already grandfathered arrangements.

By the time VA mk1 were able to form partnerships outside of SQ/EY's influence they are largely scrappy at best.
 

odysseus

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VA1 were not doing well in HKG, it never made any money.
Doing well in building passenger numbers in. Money would come subsequently.

But then it had the independence protests which put a dampener on things, and the loss of the network partner there.
 

eastwest101

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Doing well in building passenger numbers in. Money would come subsequently.

But then it had the independence protests which put a dampener on things, and the loss of the network partner there.
Yeah major political protests and the Chinese government crackdown before Covid hit - absolutely no one was making money flying anywhere to and from HGK even before Covid hit, not really a VA problem, more of a HKG domestic problem that affected all carriers (including CX).

I suspect that QFi will never return to HGK (except for maybe freight?), and it looks like CX is going to be about a quarter to half of the size that it was pre 2019 so pretty sad story all round there.
 

eastwest101

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It's clear Virgin has some interest if they're still trying to hold onto the slots. They wouldn't spend money submitting to the ACCC if they didn't see a benefit in doing so. Hopefully the IASC gives a blanket slot extension to 31 October 2022 (Northern Winter schedule start) which would almost give all parties a year to grow towards operating using all slots.

Regarding 787s who knows... Worth pointing out that some of the 777 and A330's are still lurking around in VA colours so there may be an opportunity to get them back at cheaper prices.

At least all the VA signage (check in/boarding etc) is still at Haneda airport ready to be used 😂
Probably right there about Bain/VA spending a little bit of money submitting the the ACCC as it costs them almost nothing compared to handing over an entire market share to Qantas, and just more grist to the mill of getting the JAL/QF partnership nixed by the ACCC, which it did.

The remaining flyable A330 fleet and B777 fleet might be seen now as too small for economy of scale and seeing as they have let all their pilots go I think that with the rest of the world reopening they will have lost those crew for good to either QF/overseas carriers and other careers. Even if they got new leases tomorrow for A330s at zero cost with the aircraft all painted and configured and the leasing companies agreed to that haircut, they still have nowhere to use A330s at the moment anyway due to all state borders being shut, and no pilots, and no cabin crew so they would be in storage anyway. If international borders are re-opening in Dec/Jan (and that's a very big if) they have probably missed their window to rehire/retrain/familiarise and do maintenance on any A330s or B777s already. Imagine trying to recruit and retrain a pilot group when you can't even cross state borders in Australia yet? Not going to happen.
 

AustraliaPoochie

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Never knew HGK airport code, can also be HKG, more used to HKG.
Edit: maybe there is something in the works *dreamingly* re: NH, them doing HND - SYD/NRT - PER, and VA doing HND - BNE.
Maybe one day, the Japanese would come back to us, and visit en masse, ie, come down from Japan with NH from NRT/HND, and go back to Japan via BNE.
 
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ozstamps

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I suspect potential huge traffic to and from Olympic Games Tokyo was behind Plan A - announced many moons ago. :D

They'd be insane to start any long hauls now.

It will be a major miracle if they survive 2021even domestically sadly.

Bain must be close to tossing in the towel as it has been a sea of red ink since they signed on.
 

henrus

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Bain must be close to tossing in the towel as it has been a sea of red ink since they signed on.
Curious how you or anyone knows this other than the odd leak we've had.
 

ozstamps

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Curious how you or anyone knows this other than the odd leak we've had.


I know this forum is awash with armies of starry eyed Virgin Groupies but if ANY of them think Bain has made one cent since they took over, let's hear them. Bain are opportunistic asset strippers and flick merchants. Buy, build it up fast if possible, and flog if fast for more than they paid.

Virgin are not a publicly listed Australia airline, and need tell no-one anything about their losses.

QANTAS is however - and gee whizz - fancy this result - who can believe an airline loses money - a mere 20 BILLION during COVID - and more to come -


''Qantas estimates that the pandemic has so far cost it around $16 billion in lost revenues over the past two financial years, with that set to rise to $20 billion by the end of this calendar year.

"This loss shows the impact that a full year of closed international borders and more than 330 days of domestic travel restrictions had on the national carrier," Qantas chief executive Alan Joyce said.

"The trading conditions have frankly been diabolical."

For now, Qantas is assuming that current domestic border closures will remain in place until early December, which will wipe about $1.4 billion off its top-line profit numbers for the current half year.''
 
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HS-TQE

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Too bad that Virgin Australia has very minimal if any assets left since the administration. Considering the previous owners has already mortgaged/encumbered the entire 'owned' Boeing fleet plus leased their Bowen Hills HQ during that era. (was originally owned under Virgin Blue)

Fortunately for Bain they were able to inform the banks that they will not be paying the mortgage on certain aircraft during the administration process and were able to offload the oldest 'owned' 738s and the 77Ws to their mortgagers/banks.

A bunch of VARA Fokkers, the sole 20+ year old legacy Skywest Airbus (has since been sold) and Velocity are their only unencumbered assets left.
 

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