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#936947 by VS075
28 Jul 2017, 08:57
silverwings wrote:So perhaps we will eventually see VS moving over to T4.


Can't speak for LHR, but at MAN it wouldn't surprise me if we see Air France and KLM move from T3 back to T2. This will make connection opportunities/feed onto VS flights more seamless and it's not as though all the SkyTeam airlines that use MAN are largely consigned to one terminal.

In fact, the more I think about it, the more I think this deal could be beneficial for VS and its MAN flights in the sense that not only will it make possible connection opportunities off AF/KL flights from CDG and AMS and boosting passenger numbers (particularly given the competition from Thomas Cook for the O&D market), there's also the matter of the US pre-clearance facility that's coming to MAN in a few years. Aer Lingus likes to trumpet this as one advantage of connecting via DUB, VS/AF/KL/DL could also market this as a reason to connect at MAN.

As someone said earlier, we will see what happens next as it's too soon to say.

silverwings wrote:But given they are on track for a 60-90m GBP loss this year something is still not right in Crawley Towers.


The weak pound if you have significant expense in US dollars doesn't help. I'm not sure how much of VS' costs are in dollars, but it's not exclusively a VS problem as IAG also reported this as a reason for a dent in their profits. That said, it's magnified in VS' case given that most of their business is the UK-US market.
#936948 by PaulS
28 Jul 2017, 09:11
IAG have released their figs to June and profit is up 37.5%. Unfortunately Willie Walsh proved to be right. VS despite its service levels just isnt cutting it financially. Ethiad, Cathay, Singapore and even Emirates all all reporting downturns and yet despite the perceived decline in BA their yield and profits grow. You have to ask who is really getting it right. I'm saddened as I remember the great VS from the 90's and early 00's when it was really special but now it's only 20% Virgin I expect there will be more cuts to enhance profitability. At least if they join Skyteam I might be able to spend some of the 500,000 miles I have :cool:
#936953 by gumshoe
28 Jul 2017, 10:20
PaulS wrote:IAG have released their figs to June and profit is up 37.5%. Unfortunately Willie Walsh proved to be right.


Yep. Everyone who said Alex Cruz is destroying BA and driving passengers away has been proved spectacularly wrong.

Diehard BA fans may lament his cost cutting and the loss of their complimentary G&T in economy but clearly the millennials who've grown up with Easyjet and Ryanair are perfectly happy to pay for their Percy Pigs if the fare is right.

As for VS, being part of a transatlantic joint venture with DL, AF and KL does mean they can put up more of a fight against BA, AA, IB & AY but at what cost to Virgin's brand values? And we've yet to see what effect Norwegian's aggressive transatlantic expansion will have.

Things will change, that much is certain. What and how much, we'll have to wait and see.
#936956 by jayden
28 Jul 2017, 11:08
gumshoe wrote:Yep. Everyone who said Alex Cruz is destroying BA and driving passengers away has been proved spectacularly wrong.

Diehard BA fans may lament his cost cutting and the loss of their complimentary G&T in economy but clearly the millennials who've grown up with Easyjet and Ryanair are perfectly happy to pay for their Percy Pigs if the fare is right.

As for VS, being part of a transatlantic joint venture with DL, AF and KL does mean they can put up more of a fight against BA, AA, IB & AY but at what cost to Virgin's brand values? And we've yet to see what effect Norwegian's aggressive transatlantic expansion will have.

Things will change, that much is certain. What and how much, we'll have to wait and see.


The majority of those diehard BA fans are responsible for a majority of they're revenue - i.e the AU's over there. Why do I fly BA and contribute to their pockets when you can see the cost cutting, one reason status privileges. But I agree that the majority of millennials (excluding myself and the majority of people I know!) do not care about the frills or the perks.

I think that if VS does somehow join SkyTeam of the 4 way JV allows us to have some status privileges against AF/KLM flights then VS will be able to poach a lot of corporate travelers who currently fly BA/IB/AY in Europe if the benefits are on par.

That being said, when the FC changes were made - remember there were apparently more benefits coming for Au members.... :-D
#936958 by tontybear
28 Jul 2017, 11:42
I've not looked at the IAG figures yet but when I do I'll have a look to see where the profits increased - was it at BA or IB or EI or VY? A mix? Did one part contribute more than another. A lot of people make the mistake of thinking IAG is only BA.

One figure I did see was £58m costs for the IT meltdown with likely more to come.
#936962 by gumshoe
28 Jul 2017, 12:49
jayden wrote:The majority of those diehard BA fans are responsible for a majority of they're revenue - i.e the AU's over there. Why do I fly BA and contribute to their pockets when you can see the cost cutting, one reason status privileges.


True. BA could strip out all the seats, make passengers clean the plane and charge £100 to use the loo and the diehard fans would still stick with them as long as they kept their gold card.

Plus it always amazes me how many people wouldn't consider flying with anyone else simply because it's BRITISH Airways. And as long as they've got a virtual monopoly at LHR and huge corporate contracts they'll keep raking in the cash.
#936963 by LHRrules
28 Jul 2017, 12:59
Conversely there are many on here who only fly Virgin despite there being better deals elsewhere. The days of Virgin being the underdog, 'David against Goliath' are long gone. It is run by Delta with a market cap of $36 Billion!

Virgin is just like any other huge multinational business nowadays.
#936964 by chriski
28 Jul 2017, 13:29
To be a bit more optimistic...

Maybe this will open up some reward seat/upgrade opportunities to the French/Dutch Caribbean Islands.

The LGW clubhouse may be more at risk of overcrowding .

We have been loyal to Virgin for many years and hope that the brand can continue despite the changes. Since BA seems to be continually downgrading their service levels, 'Virgin', whoever runs the operation, should maintain an overall advantage.
#936966 by tontybear
28 Jul 2017, 13:47
chriski wrote:
The LGW clubhouse may be more at risk of overcrowding .


Not sure why you would think that would happen. AF/KL/AZ don't fly from LGW!

Even if they did it does not automatically follow that their passengers would get CH access.
#936975 by slinky09
28 Jul 2017, 16:42
I am struggling to make sense of this strategically other than that having all four airlines in the JV means there's a way for DL to get a better return on revenues and its investments. It can't be about AF / KLM connectivity to VS at Heathrow given the terminal layout and really most of VS's customers are O&D. It' can't be for AF / KLM to get their hands on more slots since DL and VS have already pivoted VS heavily toward the US market from its more global (albeit limited) past. It can't be to drive increased traffic to AF / KLM. Nor do I think that it's about DL getting more control over VS, from what I hear they pretty much run the show anyway. Perhaps it's more to do with the rules on JV revenues and returns, or even perhaps it's a way for DL to invest in VS and let it acquire some more Heathrow slots to grow?
#936977 by honey lamb
28 Jul 2017, 17:43
tontybear wrote:I've not looked at the IAG figures yet but when I do I'll have a look to see where the profits increased - was it at BA or IB or EI or VY? A mix? Did one part contribute more than another. A lot of people make the mistake of thinking IAG is only BA.

One figure I did see was £58m costs for the IT meltdown with likely more to come.

Hereis an article with reference to EI's contribution
#936979 by LREDI
28 Jul 2017, 19:37
slinky09 wrote: or even perhaps it's a way for DL to invest in VS and let it acquire some more Heathrow slots to grow?


Think you've hit the nail on the head there. Remember, DL invested 10% in AF - in part funding this deal - its clear to me DL want an even greater slice of the pie. If I remember right DL cannot relinquish any slots or flying at LHR across to VS due to a pilots agreement?

I see the new JV as highlighting a couple of things:
- Requirement to still have a foothold in the EU after Brexit
- Feed from LHR-Europe and importantly, the other way - the power of the Virgin brand...
- It's a 15 year agreement, a MAJOR vote of confidence in the VS brand - its key to DL/AFKLM winning in the UK
- Costs - remember AFKLM will be a major 789 operator - synergies in terms of maintenance
- Terminal moves at LHR? Jury's out - they've just invested in the Clubhouse - will we see a continuation of KLM using small aircraft into LHR when VS could utilise a 789 or 350 to the US - Minneapolis calling...
- Further cutting back on routes to the East? Highly likely given KLMs Asia and Mid-East presence.
- Growth of regional hubs like Manchester - Yes, and it wouldn't surprise me to see VS focus on 1 Scottish airport - GLA would be my bet now UA is pulling out. Where would the planes come from - 789s following introduction of the A350s.
- SkyTeam? No. They've got the partners they want, why complicate things...

Sadly it was probably inevitable given current trends in the Industry but it means VS can keep flying and with Virgin still maintaining 20% I would bet they will be all over every branding aspect like a rash!
#936983 by TimCrawley
28 Jul 2017, 20:47
Maybe this will open up some reward seat/upgrade opportunities to the French/Dutch Caribbean Islands.


Best to start an Ex-UK thread to run alongside ColOrd's Ex-EU one :-)

We've done a few trips to SXM over the years and although it has been easier to grab the AMS/CDG direct flights it's always been cheaper to instead add on the LON-AMS/CDG element to the AMS/CDG-SXM direct flights than just take the direct flights alone ..... maybe get to spend some VS miles in future to drop the price even further?

Guess it's similar for the ABC islands (Aruba, Bonaire & Curacao) but I've usually done those with Jet Air/Sunjets direct from Belgium because of the nice package deals and last minutes on the charters.
#937022 by JCBR
29 Jul 2017, 20:33
My feeling is it is effectively a back door take over of VS by DL (I am not saying that is a bad thing).
AF-KLM have paid 220million for their stake in VS and DL have taken a 10% stake in AF-KLM which, by co-incidence, is valued at 2.2 billion, Therefore DL have effectively funded the purchase. Now I know we are talking of pounds and dollars here but I think there is more than co-incidence here.
#937074 by property1925
31 Jul 2017, 13:12
Any views on this q?

A lot of my journeys are on Sinagpore to KUL. It earns loads of TP under the current arrangement.

I fear - perhaps paranoid - that this partnership will go under the new deal.

I can't find out how long the arrangement was to last after Singapore sold its stake to Delta. And no real sense of if it would stay given AF/KL east routes



Thanks
#937075 by CommanderB
31 Jul 2017, 13:52
property1925 wrote:Any views on this q?

A lot of my journeys are on Sinagpore to KUL. It earns loads of TP under the current arrangement.

I fear - perhaps paranoid - that this partnership will go under the new deal.


I must admit, this crossed my mind too, however SQ travel is limited for me - so didn't really think anything of it.

I think we are getting a bit ahead of ourselves though... despite the buy in, its going to be quite some time until a full change of direction will take place for FC IMHO.
#937078 by SlimpyJones
31 Jul 2017, 14:23
property1925 wrote:Any views on this q?

A lot of my journeys are on Sinagpore to KUL. It earns loads of TP under the current arrangement.

I fear - perhaps paranoid - that this partnership will go under the new deal.

I can't find out how long the arrangement was to last after Singapore sold its stake to Delta. And no real sense of if it would stay given AF/KL east routes



Thanks


To be honest I doubt even the collective Virgin/Delta/AF brain has started thinking of this yet, if they will at all. Anything we may think on this board will be 100% conjecture and speculation, which doesn't really help anyone!
Even if it does, it will be years before anything happens.
#937092 by silverwings
31 Jul 2017, 19:18
LREDI wrote:I see the new JV as highlighting a couple of things:

- Terminal moves at LHR? Jury's out - they've just invested in the Clubhouse - will we see a continuation of KLM using small aircraft into LHR when VS could utilise a 789 or 350 to the US - Minneapolis calling...
- Further cutting back on routes to the East? Highly likely given KLMs Asia and Mid-East presence.


If they can get LHR to pay for the terminal move it could work (like what just happened at LGW).

Re cancelling routes to HKG/PVG/DEL then if that happens I think its the beginning of the end.
Whats then to stop more routes at LHR going to DL (some capacity already moved to dl when that capacity went to MAN) and eventually all US routs going to DL from LHR leaving only MAN/LGW. At which point is there any point paying the Virgin brand royalties? Especially with hot competition from Norwegian at LGW, BA's fleet densification and the new routs at MAN performing below target...It will be interesting to watch. But I fear that now AF/DL have the controlling stake things will be very different in a few years and the "Virgin" brand will be less and less valuable.
#937096 by LHRrules
31 Jul 2017, 20:16
DL, AF and KLM will all ferociously guard their market share and passengers. I don't see how Virgin will hope to maintain any presence surrounded by such huge self interested parties.
#937097 by tontybear
31 Jul 2017, 20:17
silverwings wrote:If they can get LHR to pay for the terminal move it could work (like what just happened at LGW).



The terminal switch at LGW was basically at the behest of Easy Jet who are by far the largest airline there and who wanted to consolidate ops in one place. And whilst LGW paid towards the costs of the switch it certainly wasn't 100%.

The situation at LHR is totally different.

When DL moved (in 2 phases) from T4 to T3 they (DL) paid for that because it was something they wanted to do rather than something HAL needed or told them to do.
#937099 by tontybear
31 Jul 2017, 20:22
LHRrules wrote:DL, AF and KLM will all ferociously guard their market share and passengers. I don't see how Virgin will hope to maintain any presence surrounded by such huge self interested parties.


But in a joint venture (which is not the same as ownership) the airlines involved agree to pool all the costs and the income on an agreed range of routes and share it out on an agreed basis.

And remember that DL and VS have an existing JV!
#937102 by gumshoe
31 Jul 2017, 20:44
LHRrules wrote:DL, AF and KLM will all ferociously guard their market share and passengers. I don't see how Virgin will hope to maintain any presence surrounded by such huge self interested parties.


As tonty says, this is a joint venture which in theory means for every passenger who flies on certain routes on DL, KL or AF, Virgin would receive a share of the revenue.

Equally, for every passenger who flies on those routes on VS, the others would receive a share of the revenue. So those four airlines wouldn't be competing with each other for passengers on certain routes, allowing them to focus on competing with oneworld (BA, AA, IB and AY already have a similar joint venture) and Star Alliance.
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