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#933844 by David
28 Mar 2017, 09:31
SlimpyJones wrote:
I won't paste the article in case of copyright, but it looks like the weak pound has led to a reduction in demand, and higher fuel costs.



There's a surprise - reduction in demand might also be down to rubbish new website and the unbelievable flight prices over the last few months :-O

David
#933898 by jayden
29 Mar 2017, 09:49
I think they will start to cut routes which DL metal also serves as they can just codeshare on that now - mainly central and east. Maybe that could mean they could also retire the A340's slowly leaving them with a more efficient fleet.

And you think the Telegraph would spring for a more upto date photo of DL livery!
#933901 by gumshoe
29 Mar 2017, 10:20
LHRrules wrote:"Virgin said it was to review its flight network as part of continuing efforts to keep a lid on costs."

I wonder where the cuts will be made?


Well we already know Manchester's losing some of the extra flights it's gained this summer.
#933908 by slinky09
29 Mar 2017, 11:58
I know from fellow V-Flyers that the weak pound has affected many of our plans for US travel since June last year. Just goes to show how, when you put all your eggs in one basket, you are prey to external forces you cannot control - Brexit has mucked things up badly for companies with VS's cost / revenue mix: mostly UK £ sales to a market in decline with significant costs in a currency that is stronger. I'll be very interested to see if BA suffers likewise with its strong dependence on NA for revenue and profit (but of course a wider global network too).

When you look at how Asian airlines are growing in Manchester and other route options open to it, maybe VS might balance the network a bit better.
#933911 by gumshoe
29 Mar 2017, 12:28
Problem is the ME3 and most long-haul Asian carriers offer a vastly superior product to VS (and BA, although they will always be protected somewhat by their short haul feeder traffic and their heritage - it's amazing, despite all the service cuts, how many people will still only travel BA "because they're British").

For VS to significantly eat into the Asian/ME market would take a huge investment in the product and an equally huge increase in routes & frequency, which it simply can't afford.

So it's stuck with its current US strategy which may well turn out to be a disaster given all that's happened over the last year.
#933932 by VS075
29 Mar 2017, 18:30
slinky09 wrote:When you look at how Asian airlines are growing in Manchester and other route options open to it, maybe VS might balance the network a bit better.


If VS started a route to Bangkok from MAN, they can potentially do very well as it's the biggest unserved route from Europe. Link: http://www.anna.aero/2017/01/24/europe-thailand-trends/

Wishful thinking they'd do that though, given that VS do not fly to Thailand at present.

Mind you, in the last couple of years, Cathay Pacific have returned to MAN with a route to Hong Kong and Hainan launched a route to Beijing (first announced by the Chinese President during his state visit) - both of these are doing very well, so it makes you wonder if VS stand to do equally as well if they launched their own routes from MAN to Hong Kong or Shanghai? The UK, and Manchester in particular, appear to be popular with Chinese tourists and business folk.

gumshoe wrote:Problem is the ME3 and most long-haul Asian carriers offer a vastly superior product to VS (and BA, although they will always be protected somewhat by their short haul feeder traffic and their heritage - it's amazing, despite all the service cuts, how many people will still only travel BA "because they're British").

For VS to significantly eat into the Asian/ME market would take a huge investment in the product and an equally huge increase in routes & frequency, which it simply can't afford.

So it's stuck with its current US strategy which may well turn out to be a disaster given all that's happened over the last year.


Another factor about the ME3 is that the amount of capacity they put (or dump?) on certain routes means they can undercut other airlines, including those who fly a given route non-stop or 1-stop via their own hub. VS are already up against this on other routes and without knowing what VS' prices were vs the ME3 + others, I hazard a guess this is one reason why SYD was axed. Going eastbound from MAN, the default option these days is one of the ME3 given their frequencies and prices, though SQ, Cathay Pacific, Hainan, Oman Air and Turkish are also available, plus BA/AF/KL/LH.

For what it's worth, AMS is the most popular European hub for MAN passengers.

I agree with your last comment that the recent US-centric approach could backfire given that events of the last 12 months have changed things.
#933949 by David
30 Mar 2017, 07:39
slinky09 wrote:I know from fellow V-Flyers that the weak pound has affected many of our plans for US travel since June last year. Just goes to show how, when you put all your eggs in one basket, you are prey to external forces you cannot control - Brexit has mucked things up badly for companies with VS's cost / revenue mix: mostly UK £ sales to a market in decline with significant costs in a currency that is stronger.


Agree.

The bit I don't understand is, if planes are flying with lighter loads, why are the prices, especially in Upper, the highest they have been for years with "lowest" prices starting around £2800.

These prices don't encourage anyone to take a hit on the exchange rate and still travel west.

Apart from the small amount of catering costs and the extra fuel required to carry more passengers, surely the rest of the costs are fixed.


David
#933951 by SlimpyJones
30 Mar 2017, 08:16
nguba wrote:
SlimpyJones wrote:I'm sure the £1million BA will be paying to Virgin later this year will help out some.


Why does BA have to pay VS £1million?


After Delta bought SQ's 49% stake in VS in 2012, the BA CEO-at-the-time made a remark that the Virgin brand would be gone in five years. Branson told him to put his money where his mouth was and a £1million bet was agreed. It'll be time to collect later in the year. I'm sure that'll go down well with BA's current cost-cutting approach.
#933996 by VS075
31 Mar 2017, 21:19
VS075 wrote:
slinky09 wrote:When you look at how Asian airlines are growing in Manchester and other route options open to it, maybe VS might balance the network a bit better.


If VS started a route to Bangkok from MAN, they can potentially do very well as it's the biggest unserved route from Europe. Link: http://www.anna.aero/2017/01/24/europe-thailand-trends/

Wishful thinking they'd do that though, given that VS do not fly to Thailand at present.

Mind you, in the last couple of years, Cathay Pacific have returned to MAN with a route to Hong Kong and Hainan launched a route to Beijing (first announced by the Chinese President during his state visit) - both of these are doing very well, so it makes you wonder if VS stand to do equally as well if they launched their own routes from MAN to Hong Kong or Shanghai? The UK, and Manchester in particular, appear to be popular with Chinese tourists and business folk.


Quoting myself because I saw over on a.net today that Cathay Pacific are upgrading their MAN-HKG route to daily from December.

This is great news for MAN and evidence that the MAN-China/HK market is buoyant right now. If VS want to further grow their presence at MAN, they ought to be looking east.
#934004 by mitchja
01 Apr 2017, 09:49
Don't forget though that a lot of the far east airline routes are all part of bilateral agreements so it's not just as straight forward as picking a destination and starting to fly there.

Both governments have to get involved as part of the negotiating etc.
#934006 by gumshoe
01 Apr 2017, 10:04
VS075 wrote:This is evidence that the MAN-China/HK market is buoyant right now.


Is it though? It certainly suggests that CX believes the HK-MAN market is buoyant, but not necessarily the other way round.

Since VS dropped SYD the LHR-HKG flight usually has space even when BA & CX are full. The recent closure of the HKG Clubhouse suggests to me there is no long-term commitment to serving it.

I just can't see a sustainable market for a British airline serving MAN-HKG (or, frankly, MAN to any long-haul business destination). If there was, BA would already be flying it.
#934023 by VS075
02 Apr 2017, 12:18
gumshoe wrote:
VS075 wrote:This is evidence that the MAN-China/HK market is buoyant right now.


Is it though? It certainly suggests that CX believes the HK-MAN market is buoyant, but not necessarily the other way round.

Since VS dropped SYD the LHR-HKG flight usually has space even when BA & CX are full. The recent closure of the HKG Clubhouse suggests to me there is no long-term commitment to serving it.

I just can't see a sustainable market for a British airline serving MAN-HKG (or, frankly, MAN to any long-haul business destination). If there was, BA would already be flying it.


I was referring more to the market between the two places in general rather than a specific direction. In terms of direction, I agree that a lot of the demand appears to be from the HK/China end which is a good thing.

One thing BA and CX have on the London-HK market that VS don't is codeshares and connectivity at both ends via oneworld, whereas VS presumably have to rely on a lot of O&D traffic, so my question to that sort of scenario is how many passengers on those BA/CX flights are O&D and how many are connecting?

As for the MAN market in general, whilst I agree it'll never have as much demand as London, I don't agree with your analysis about MAN never sustaining long-haul flights to business destinations. Whilst connectivity no doubt contributes, MAN has various foreign carriers serving such destinations and Emirates sends up to 3 A380's per day for the MAN-DXB route. Then there's the aforementioned CX route.

I wouldn't really pay much attention to what BA has done at MAN over the years. They were quite happy to ditch all long-haul flying outside London years ago and if BA's business plan and route strategy are gospel then VS and the others are clearly wasting their time serving the regions. Any long-haul flying that does exist at MAN BA have been quite happy to let other oneworld airlines such as AA run them instead in return for codeshares. To an extent, it made sense for the current AA-operated routes from MAN to be operated by AA as BA do not have a crew/aircraft base at MAN (though the hard product AA offers on the MAN routes leaves a lot to be desired) in a similar way it made sense for VS to take over MAN-ATL/JFK from DL.

I'm not going to argue the fact that London is a much bigger market than MAN, but I think there's sometimes a bit of an underappreciation of the potential market from MAN and other parts of the UK.
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