What will Virgin look like now?

17 replies

johnaboxall

Virgin Australia - Velocity Rewards

Member since 24 Aug 2011

Total posts 384

Originally Posted by nix584

Originally Posted by dm12

I don't know what Virgin will look like now, but if it was up to me I would get a right-size strategy. Stop trying to be teenage Qantas and find their own market niche and value proposition. Don't go head-head with Qantas unless a profit can be turned (i.e don't chase them to Haneda because they went there), and if they do try and make it a unique offering.

INTERNATIONAL -

1. Keep the 777's and fly to LAX and/or SFO from BNE and/or MEL. The route is profit making (I believe) and they own the jets so work them. Don't bother going head-head with QF out of SYD as well, they need a different approach.

2. Join Star Alliance and use them for most international connections. Use United over LAX/SFO to access north america. Air NZ can handle New Zealand for now, but for the unique routes like BNE-Dunedin, maybe try CBR-AKL to access a new market. Singapore/Thai/ANA for Asia and Euro connections.

3. If there's spare 777's then back to HKG. Star Alliance airlines (Air China/Shenzhen) for connections into China. Abandoning HKG was a bit short-sighted but not surprising given the financial pressures. If they can turn a profit on that route, and its a popular route needing a none-OneWorld carrier, then they should run it. They could make HKG into a Star alliance hub with connections on Egyptair, Lufthansa, SAS, Swiss and Turkish.

4. If they're still a Virgin brand (or even if they're not) connect with Virgin Atlantic at HKG/SFO/LAX for London flights, and SFO for Manchester (assuming VS is still around and flies there)

DOMESTIC

1. bye-bye A330's. Its a shame but they're leased and financially they have to go. They can bring back domestic wide-bodies in the future if warranted.

2. leased 737's back to the lessor, fleet size down to the 40 or so that they own. Sure they'll have a reduced network and frequency, but they should concentrate where they can make money and on city pairs not served by QF.

3. Do a JetBlue and come up with a top notch busi product for some 737's and put them on the transcon, longer haul and red-eye routes. Maybe some extra leg room economy seats too.

4. Regional - its a mess. They've scuttled the original regionals (Skywest etc) and spread them too thin across the country. Concentrate on QLD and WA i reckon. How are there only 8 ATR-72's left?!



I'd say 777's yes, for LAX. VA have looked at SFO and it wasn't going to work. They'll need A330's to stay for HND, and I'd guess SYD/MEL-PER. I don't see how reducing the 737's would be a benefit, they need to keep up capacity to be competitive against QF.

Joining (or initially, being invited into) an alliance may come down to the new investors and/or owners. Wouldn't be surprised to see Virgin Group increase it's stake.

I suspect International will be gone, there's no reason for it to exist. The only profitable runs (LAX) were slowly going unprofitable due to lack of outward forward bookings (dropping exchange rate kills AU>US tourism), and lack of inbounds as not enough yanks know about VA, plus the freight issues on the 777s. Now you don't want travel in either direction until this virus is beat.

We imagine the new airline will most likely focus on slowly gearing up using the golden triangle and other profitable routes with a single aircraft type (737-series) - and not as an LCC. Then grow slowly if the market and business allows. International with 737 could return if it's ok to fly to NZ (etc) and there's a business case for it.

dm12

Member since 08 Feb 2018

Total posts 102

Originally Posted by nix584

Originally Posted by dm12

I don't know what Virgin will look like now, but if it was up to me I would get a right-size strategy. Stop trying to be teenage Qantas and find their own market niche and value proposition. Don't go head-head with Qantas unless a profit can be turned (i.e don't chase them to Haneda because they went there), and if they do try and make it a unique offering.

INTERNATIONAL -

1. Keep the 777's and fly to LAX and/or SFO from BNE and/or MEL. The route is profit making (I believe) and they own the jets so work them. Don't bother going head-head with QF out of SYD as well, they need a different approach.

2. Join Star Alliance and use them for most international connections. Use United over LAX/SFO to access north america. Air NZ can handle New Zealand for now, but for the unique routes like BNE-Dunedin, maybe try CBR-AKL to access a new market. Singapore/Thai/ANA for Asia and Euro connections.

3. If there's spare 777's then back to HKG. Star Alliance airlines (Air China/Shenzhen) for connections into China. Abandoning HKG was a bit short-sighted but not surprising given the financial pressures. If they can turn a profit on that route, and its a popular route needing a none-OneWorld carrier, then they should run it. They could make HKG into a Star alliance hub with connections on Egyptair, Lufthansa, SAS, Swiss and Turkish.

4. If they're still a Virgin brand (or even if they're not) connect with Virgin Atlantic at HKG/SFO/LAX for London flights, and SFO for Manchester (assuming VS is still around and flies there)

DOMESTIC

1. bye-bye A330's. Its a shame but they're leased and financially they have to go. They can bring back domestic wide-bodies in the future if warranted.

2. leased 737's back to the lessor, fleet size down to the 40 or so that they own. Sure they'll have a reduced network and frequency, but they should concentrate where they can make money and on city pairs not served by QF.

3. Do a JetBlue and come up with a top notch busi product for some 737's and put them on the transcon, longer haul and red-eye routes. Maybe some extra leg room economy seats too.

4. Regional - its a mess. They've scuttled the original regionals (Skywest etc) and spread them too thin across the country. Concentrate on QLD and WA i reckon. How are there only 8 ATR-72's left?!



I'd say 777's yes, for LAX. VA have looked at SFO and it wasn't going to work. They'll need A330's to stay for HND, and I'd guess SYD/MEL-PER. I don't see how reducing the 737's would be a benefit, they need to keep up capacity to be competitive against QF.

Joining (or initially, being invited into) an alliance may come down to the new investors and/or owners. Wouldn't be surprised to see Virgin Group increase it's stake.

With respect, that was the issue with VA, not able to actually change anything because of (reasons). Their measure of success was how well they competed against QF, not how much profit they were making. For example, in my view, they abandoned HKG and went for HND simply because they didn't want QF to get both HND slots. I don't think HND was ever going to be profitable for them as there was going to be too much capacity coming on, and HKG needed a non-Oneworld carrier and would recover demand post-riots. With the 737's, well now they don't have a choice. A capacity competition with QF caused much of their financial issues. They need a different approach whether its a niche, different city pairs, focus on BNE and MEL rather than Sydney or joining an alliance, or all of the above. Same old is not an option.

Jack&Jill

Member since 29 Apr 2020

Total posts 1

Originally Posted by nix584

Originally Posted by dm12

I don't know what Virgin will look like now, but if it was up to me I would get a right-size strategy. Stop trying to be teenage Qantas and find their own market niche and value proposition. Don't go head-head with Qantas unless a profit can be turned (i.e don't chase them to Haneda because they went there), and if they do try and make it a unique offering.

INTERNATIONAL -

1. Keep the 777's and fly to LAX and/or SFO from BNE and/or MEL. The route is profit making (I believe) and they own the jets so work them. Don't bother going head-head with QF out of SYD as well, they need a different approach.

2. Join Star Alliance and use them for most international connections. Use United over LAX/SFO to access north america. Air NZ can handle New Zealand for now, but for the unique routes like BNE-Dunedin, maybe try CBR-AKL to access a new market. Singapore/Thai/ANA for Asia and Euro connections.

3. If there's spare 777's then back to HKG. Star Alliance airlines (Air China/Shenzhen) for connections into China. Abandoning HKG was a bit short-sighted but not surprising given the financial pressures. If they can turn a profit on that route, and its a popular route needing a none-OneWorld carrier, then they should run it. They could make HKG into a Star alliance hub with connections on Egyptair, Lufthansa, SAS, Swiss and Turkish.

4. If they're still a Virgin brand (or even if they're not) connect with Virgin Atlantic at HKG/SFO/LAX for London flights, and SFO for Manchester (assuming VS is still around and flies there)

DOMESTIC

1. bye-bye A330's. Its a shame but they're leased and financially they have to go. They can bring back domestic wide-bodies in the future if warranted.

2. leased 737's back to the lessor, fleet size down to the 40 or so that they own. Sure they'll have a reduced network and frequency, but they should concentrate where they can make money and on city pairs not served by QF.

3. Do a JetBlue and come up with a top notch busi product for some 737's and put them on the transcon, longer haul and red-eye routes. Maybe some extra leg room economy seats too.

4. Regional - its a mess. They've scuttled the original regionals (Skywest etc) and spread them too thin across the country. Concentrate on QLD and WA i reckon. How are there only 8 ATR-72's left?!



I'd say 777's yes, for LAX. VA have looked at SFO and it wasn't going to work. They'll need A330's to stay for HND, and I'd guess SYD/MEL-PER. I don't see how reducing the 737's would be a benefit, they need to keep up capacity to be competitive against QF.

Joining (or initially, being invited into) an alliance may come down to the new investors and/or owners. Wouldn't be surprised to see Virgin Group increase it's stake.

Competing with QANTAS was what got them in the position. They need to create their own market not take another carriers.

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