Tag Archives: Virgin

Follow your own Sheep, Airline Style

You do wonder what sort of credentials you need to run an Airline, it is very difficult, in fact it is one of the worse sort of businesses to do business, there are so many factors in the fact that can send you broke on a weekly basis, some can be the changeable climate of the traveling public, others are anything from hijackings to tsunamis, fuel shortages, volcanos, snow, pilot and ground staff strikes, computer catastrophic failures, bad press, engine explosions or the worse of all, the loss of aircraft, passengers and crew.

Airlines as a whole don’t make money, losing it is easy, making it is very difficult, so why do you want to be in this business, because it is glamorous, well maybe yes to a point, some call it the “bus service in the air”, which is a fair comment in todays highly regulated on time service environment, but there is something in that fact as flying is a still a wonderous thing to do even for people who hate it, nothing is more amazing than the fact you can circle half the globe and land within minutes of the scheduled timetable, and within the hours of a 24hour day, Sydney to London, in the time of only one day of your life, and for only $2000.00 is in anyone’s terms  a great deal.

With all these issues to face everyday you would want to minimize your losses by selecting routes that are profitable and useable, but there is a strange fact that sometimes in doing this, all reason goes out of the window, take for instance New Zealand.

Now New Zealand is a pretty country that is somewhere in the low South Pacific Ocean and at last count there was 4,315,800 people residing there, and of that  1,110, 456 of them visited Australia, and from Australia they have in the fact that 1,115,285 of them then returned the favour by going over there.

So that would seem like a pretty big market, plenty for everyone to have a slice of the travelling cake, however if you are in an airline management position this would seem to be a rainbow gold mine just waiting to be dug.

It is but a strange thing happened, for such a small country airlines have been swapping and changing around to the point that it is a lottery to seem which one will be ready for you at the airport when you get there!

Almost all have been non New Zealand Airlines and mostly come from big brother Australia, long forgotten Ansett ruled the roost for years with a massive 30% share of the cake, then Qantas in some form or the other took over the debris when the airline was grounded in 2001 and being renamed Qantas New Zealand, in 2003 Qantas created their successful LCC (low Cost Carrier) offshoot Jetstar which commenced New Zealand operations on the 1 December 2005  to Christchuch (CHC) and on the 10 June 2009 Jetstar commenced domestic New Zealand flights between Auckland, Wellington, Christchurch and Queenstown.

New Zealand has it’s own national airline called Air New Zealand which by all cases in the last decade has been a total basketcase, New Zealand as a market that is so very small for a large legacy carrier that has 6 Boeing 747-400’s always parked under the window, but under the stewardship of Rob Fyfe who was appointed in 2005 the airline has become the one to watch and now covers 27 domestic destinations and 26 international destinations, making money in a creative way which much like Singapore Airlines in Singapore, and in doing so out go the big thirsty B747’s and in come B777’s which are more suited to long thin routes, in other words good management.

Another upstart that tasted the New Zealand gold rush is Virgin Blue, based in Brisbane (BNE) , started in 2000, it had the good fortune in that Ansett dissolved right in front of them and created a market almost overnight, a LCC that was on the hunt soon dominated the Australian low-cost market and in 2003 a subsidiary of Virgin blue, Pacific Blue was heading over the Tasman Sea wanting some of the ready cash.

But in most cases you always found yourself on a Virgin Blue aircraft as the fleet was rotated around to cover the only few Pacific Blue Boeing 737’s flying, and Virgin then thought “well we are over there so why don’t we do domestic New Zealand as well”, well why not, it’s a free world.

So if you wanted a flight from Aussieland to Kiwi Land, then the choice is large, Qantas, Jetstar, Virgin Blue, Pacific Blue and not forgetting Air New Zealand, now on top of all that it is because New Zealand is where it is then most international carriers will terminate their service in either Auckland (AKL) or Christchurch (CHC), and in most case many have 5th freedoms of the air rights, which means that “they have the right to fly between two foreign countries during flights while the flight originates or ends in one’s own country”, so you can sway your way down to Sydney Airport, drop $210.00 into a Emirates passenger ticket and then rumble right along and taste the space and giantness of their double decker bus, the A380, well they are getting 90 of them so why not drop a few on the Trans Tasman route and pick a few shekels moving Australia to New Zealand or vice- versa, 460 seats is a lot to fill, Melbourne’s the same, In Brisbane you can jump on a Singapore Airlines Jet and swan over in style, and not on a cramped B737 or Airbus A320.

If there is then a saturated market it is New Zealand, with only two major ports (AKL/CHC), and as sheep following sheep its getting seriously crowded parking in Auckland with empty planes, so what happens, they lose mountains of money, and it becomes a poker game of who will hold out till the last, all of them holding their breath, fares go to bucket levels, almost coming down to stealing passengers at airports trying to board the competition, and it goes on for years, upping the frequency or adding even more ports (Gold Coast, Cairns) to get a leg over the others…..

So who gave up first…..Virgin Blue/Pacific Blue, “what the hell it’s not worth it”, so they decided that we will put our precious resources somewhere else…and that is?

Perth (PER), the resource boom of shipping the whole of Western Australia to either China or Japan is in full swing and a market just waiting to be exploited, did they learn from losing all that cash in New Zealand, “hell no”, as “thar’s gold in those W.A. Hills”

Virgin Blue decided to ship people over to W.A. wholesale, by buying a couple of large Airbus A330’s and going business class too.

Qantas not to be out done looks around and realises that Jetstar has few loose A332’s available and  so puts them on the same route, Jetstar meanwhile is a regular customer at Perth, so is Singapore  Airlines offshoot Tiger (one Dollar seats) Airlines, Strategic Airlines is also based there, Skywest too, in fact there is 12 domestic airlines based in Perth, and how many people live there?

1,659,000, less than New Zealand, in fact far less than New Zealand, oh and there are a few 5th Rights Carriers passing through there too, suicide!

And on it goes, Sheep following Sheep, Perth has not even been on the map for decades, if you wanted to fly there it cost less to fly to Hong Kong, Japan even, in fact the cheapest way was to fly to Singapore and backtrack to Perth, those were the days, going international to fly to a domestic port?

Soon it will be dollar dazzlers, free meals, face painting to fill empty seats…Suicide.

So here we go, which one will pull out first, Qantas, Nah!, Jetstar, Nah!, Virgin Blue, Nah! too much at stake, Tiger..well maybe but their numbers are low anyway.

So it’s going to be a blood bath, and coming to an airport near you.

Say, there is a good traffic going down to Antarctica, could be on a winner there, seasonal is the only problem, “could you land an Airbus A330 on the ice?”

Sheep following Sheep, Oh by the way Tiger Airlines are going to do a new route……going over the Tasman to New Zealand….

……”oh for Christ’s sake”

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How Long Can This Go On….Low Airfares

Sale Case

The losses are huge, big, enormous and it has hit every corner of the Travel Market and still it hurts, for the airlines it is Judgement day but for how long?

When Singapore Airlines are doing European specials you know life is bad, People will pay a premium to fly the smile high club so what hope is there for anyone else, British Airways have quickly dropped their premium route fare to nothing just to survive with an AUS$1444.00 fare SYD/LON, so Qantas will have to match that and these three airlines have been the big hitters on this route for decades so for them to drop it has to be the very last resort.

For Qantas their other Premium route SYD/LAX (los Angeles), has been decimated by V Australia’s close to as possible $1000.00 return fares, with United chopping fares as well for market share its going to be banging heads on the table in the offices at Mascot and not before time.

And suddenly as a break into a new market, Delta has already dealt in a sword in the ground deal of  AUD$982.00 from Syd with Air New Zealand’s counter offer of AUD $889.00 (including taxes) from Coolangatta is near as damn soil cheap as you can get.

This is a snapshot of just one aviation market in Oceania/Asia and it is being repeated though out many other markets in every part of the globe, the good side is that it has leveled fares that were overpriced on monopolised routes, Qantas’s SYD/LAX route fare $2000.00 was quite simply Sheriff of Nottingham territory and to have it halved showed the bonuses that flowed though the doors of the Geoff Dixon era, economic crisis or not that still had to happen.

So we are in the shit, so to speak and the few cashed up travellers are having a boom time, it can’t last and it won’t but it will not be all bad news.

The cheap fares are there because most Airlines are over productive with too many planes and the staff that runs them, as the airlines shred older inefficient aircraft they will create a newer tighter business, staff will go because you are not going to go and pickup and then go back to normal when the economy picks up again, today you need to be lean and efficient, and a good old shake out of the mattress will help the restructuring of almost every aspect of the Aviation Business so you can now throw out the old model and send in with the new as for the first time in its history except with a few bumps aviation is faced without its stunning growth year after year and so like any other business it will have to adapt to the current climate changes.

The cheap fares will last this year  but for the rest it should settle back down again which means many fares will rise as they have too because.

1. Airline restructuring will be completed.

2. Airlines are not public services they have to make money, break even at least.

That is the bad news…the good news is they won’t go nowhere near the old prices or will again, this is the new new for the business so SYD/LON should level out at AUS$1600-$1800 and SYD/LAX about AUS$1200 – $1300 which is still brilliant value, most domestic traffic will not push those AUS$1 a seat deals t0o hard and put on an average of AUS$20 per ticket price per sector, really low LCC (Low Cost Carriers) will have to improve their bottom lines as the likes of Ryanair (I’ll charge you), Easyjet et all, will not find profit in expansive growth anymore and will have to fall to the realities of the a real business model, and this is all in cattle class as even more changes will come in business class, but these prices do still depend on very stable Fuel costs going into 2010, if they rise then so will the fares by another 5% to 10%.

The only growth area will be in the International LCC (Low Cost Carriers), many have already failed in this new dimension to travel, but some pioneers are paving the trail like AirAsia and Jestar International but once the model is proven many others will quickly come abroad but don’t expect really stupid low international fares here, they will be cheaper than normal route fares but these carriers will want to survive and there is a boundary limit to how far down you can go down with fares as international travel is a completely different model to domestic and short haul travel (European) as you need infrastructure and personal at the other end of the route.

Another factor if it comes to pass is that many countries like Australia are being pressured to drop or reduce their heavy outbound and inbound airport taxes to encourage more traffic, and its these expensive government add-ons that can really make a biggest difference to an airfare price,and that is even domestically and should be curtailed as why should be the airlines that always have to shoulder the costs, these little termites are in many countries a bigger cancer than anything in a good tourism market and if the governments are scared of lost revenue then that is not the case as visitors will still spend more in the country if they are not robbed at the entry point.

..At the moment fares are too cheap and unsustainable and how long they will last is not very long, my guess is the Christmas/New Year 09 period and will not be as severely discounted going into 2010 as they were in 2009 and maybe a few excellent specials will still crop up in the traditionally really low periods, say March and Oct/Nov next year, so with an economic crisis or not airlines will not survive unless they do so, there is also a chance they could even rise sooner to stop the bleeding quicker and once one large influential carrier does so the rest will quickly follow, so the real push from next year for your dollar will be in super economy class with more leg room and better service and higher profitable fares for the carrier, the deals will be there but they will expect you to pay more for them so you win and you lose at the same time.

So if your going to fly on the cheap then fly now..and book quickly because fares will rise, but not enough to break your credit card limit…….

Updated 18th Nov 2009…..
I noted in the above issue that the fare to Europe would be AUS$1600.00 – $1800.00, the recent Fares for early 2010 are AUS$1685.00, and will be basically around AUS$1750.00 late 2010, but we are having the problem of very high fares coming  (USA/European Summer) to try to pull back some profit see current issue Airline passengers are back-so lets get back to work, as this is a cash in to pull back profit it won’t work except maybe in the early (May/June 2010) period, but it will scare more away than bring passengers back into their seats….

Look at this Richard. Just look at it…

No doubt you have read this, but I’ll list it here for prosperity, Great travel stories can give you day a lift…now all together

‘Look at this Richard. Just look at it’

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Virgin: the world’s best passenger complaint letter?

Here we reproduce a complaint letter sent to Sir Richard Branson, which is currently being emailed globally and is considered by many to be the world’s funniest passenger complaint letter.
Dear Mr Branson
REF: Mumbai to Heathrow 7th
December 2008
I love the Virgin brand, I really do which is why I continue to use it despite a series of unfortunate incidents over the last few years.
This latest incident takes the biscuit. Ironically, by the end of the flight I would have gladly paid over a thousand rupees for a single biscuit following the culinary journey of hell I was subjected to at thehands of your corporation.
virgin1_1246696cLook at this Richard. Just look at it:
I imagine the same questions are racing through your brilliant mind as were racing through mine on that fateful day. What is this? Why have I been given it? What have I done to deserve this? And, which one is the starter, which one is the desert?
You don’t get to a position like yours Richard with anything less than a generous sprinkling of observational power so I KNOW you will have spotted the tomato next to the two yellow shafts of sponge on the left. Yes, it’s next to the sponge shaft without the green paste. That’s got to be the clue hasn’t it. No sane person would serve a desert with a tomato would they. Well answer me this Richard, what sort of animal would serve a desert with peas in:
virgin2_1246698c
I know it looks like a baaji but it’s in custard Richard, custard. It must be the pudding. Well you’ll be fascinated to hear that it wasn’t custard. It was a sour gel with a clear oil on top. It’s only redeeming feature was that it managed to be so alien to my palette that it took away the taste of the curry emanating from our miscellaneous central cuboid of beige matter. Perhaps the meal on the left might be the desert after all.
Anyway, this is all irrelevant at the moment. I was raised strictly but neatly by my parents and if they knew I had started desert before the main course, a sponge shaft would be the least of my worries. So lets peel back the tin-foil on the main dish and see what’s on offer.
I’ll try and explain how this felt. Imagine being a twelve year old boy Richard. Now imagine it’s Christmas morning and you’re sat their with your final present to open. It’s a big one, and you know what it is. It’s that Goodmans
stereo you picked out the catalogue and wrote to Santa about.
Only you open the present and it’s not in there. It’s your hamster Richard. It’s your hamster in the box and it’s not breathing. That’s how I felt when I peeled back the foil and saw this:virgin3_1246699c

Now I know what you’re thinking. You’re thinking it’s more of that Baaji custard. I admit I thought the same too, but no. It’s mustard Richard. MUSTARD. More mustard than any man could consume in a month. On the left we have a piece of broccoli and some peppers in a brown glue-like oil and on the right the chef had prepared some
mashed potato. The potato masher had obviously broken and so it was decided the next best thing would be to pass the potatoes through the digestive tract of a bird.
Once it was regurgitated it was clearly then blended and mixed with a bit of mustard. Everybody likes a bit of mustard Richard.
By now I was actually starting to feel a little hypoglycaemic. I needed a sugar hit. Luckily there was a small cookie provided. It had caught my eye earlier due to it’s baffling presentation: virgin4_1246702c
It appears to be in an evidence bag from the scene of a crime. A CRIME AGAINST BLOODY COOKING. Either that or some sort of back-street underground cookie, purchased off a gun-toting maniac high on his own supply of  yeast. You certainly wouldn’t want to be caught carrying one of these through customs. Imagine biting into a piece of brass Richard. That would be softer on the teeth than the specimen above.
I was exhausted. All I wanted to do was relax but obviously I had to sit with that mess in front of me for half an hour. I swear the sponge shafts moved at one point.
Once cleared, I decided to relax with a bit of your world-famous onboard entertainment. I switched it on:
virgin5_1246705cI apologise for the quality of the photo, it’s just it was incredibly hard to capture Boris Johnson’s face through the flickering white lines running up and down the screen. Perhaps it would be better on another channel:
virgin6_1246708cIs that Ray Liotta? A question I found myself asking over and over again throughout the gruelling half-hour I attempted to watch the film like this. After that I switched off. I’d had enough. I was the hungriest I’d been in my adult life and I had a splitting headache from squinting at a crackling screen.
My only option was to simply stare at the seat in front and wait for either food, or sleep. Neither came for an incredibly long time. But when it did it surpassed my wildest expectations:
virgin7_1246709cYes! It’s another crime-scene cookie. Only this time you dunk it in the white stuff.
Richard…. What is that white stuff? It looked like it was going to be yoghurt. It finally dawned on me what it was after staring at it. It was a mixture between the Baaji custard and the Mustard sauce. It reminded me of my first
week at university. I had overheard that you could make a drink by mixing vodka and refreshers. I lied to my new friends and told them I’d done it loads of times. When I attempted to make the drink in a big bowl it formed a cheese Richard, a cheese. That cheese looked a lot like your baaji-mustard.
So that was that Richard. I didn’t eat a bloody thing. My only question is: How can you live like this? I can’t imagine what dinner round your house is like, it must be like something out of a nature documentary.
As I said at the start I love your brand, I really do. It’s just a shame such a simple thing could bring it crashing to it’s knees and begging for sustenance.
Yours Sincererly
XXXX

Paul Charles, Virgin’s Director of Corporate Communications, confirmed that Sir Richard Branson had
telephoned the author of the letter and had thanked him for his “constructive if tongue-in-cheek” email. Mr
Charles said that Virgin was sorry the passenger had not liked the in-flight meals which he said was
“award-winning food which is very popular on our Indian routes.”
© Copyright of Telegraph Media Group Limited 2009
Virgin: the world’s best passenger complaint letter? – Telegraph