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#948515 by ColOrd
07 Feb 2019, 10:52
https://uk.reuters.com/article/uk-thoma ... KKCN1PW0I9

Not totally unexpected development!

Could this be the strengthening of the VS superhub at Manchester and further consolidation at Gatwick. TCX long haul is all 330 ops now so very easy to integrate.

Obviously purely speculation but if VS bought it would they only want the Long Haul or would they go for the whole bang? Would VS&DL know what to do with the short haul holiday flights?
#948518 by Joshl257
07 Feb 2019, 12:31
In my eyes this is a no brainer for VS. Solidifying your position at MAN as the number one airline while gaining valuable LGW slots. This deal would probably make more sense than the Flybe one on paper. The short hall fleet would pose a question, although Delta is building out their A321 operation in the U.S so it cannot be a bad aircraft to have. Think VS would only be interested in the Thomas Cook UK business not the group as a whole.
#948581 by Dobbo
09 Feb 2019, 17:17
The acquisition of TCX may provide a opportunity for VS to significantly grow their MAN operation and get quickly towards an economy of scale. However, the value of acquiring TCX depends on a number of factors, specifically what VS/DL have planned for MAN, and whether whatever TCX are selling fits that objective.

I am assuming that VS would only be interested in the Long Haul business, and not the short haul part of the business.

To me, the obvious upsides are:

1 - removing TCX and acquiring its customer base would make VS the dominant carrier at MAN, particularly on TATL. Overnight, it would give VS a far larger Carribean network at MAN, and scale on the US routes. You could see double daily JFK, at least daily LAS, over double daily MCO, 5x weekly LAX, 3x weekly SFO and SEA.

2 - the scale would have synergies with the proposed Connect Airways venture, giving a larger network for that to feed into at MAN.

3 - the scale would make it easier for VS/DL to route India-USA traffic over MAN in conjunction with Jet Airways. For example, it would likely strengthen the business case for BOM-MAN to increase to daily, and also a new route between MAN-DEL.

4 - the scale might also permit DL/VS to route traffic between the USA and South Africa over MAN.

5 - VS buying TCX prevent another competetor purchasing it and competing at MAN with a ready made network.


The downsides are that it is obviously a huge commercial risk, and requires a significant capital injection to work. For example, I'm not clear that the fleet is necessaraly what VS want to operate in large numbers. Even if it was, the fleet requires rennovation. Who knows if the TCX contracts are what VS wants - they might want their staff on the same terms as VS, which they might not be able to achieve without significant payments of money.

The other issue is what Thomas Cook Holidays would want (if anything) in terms of guaranteed seat capacity to certain destinations . I dont know if that would apply on long haul, but it would be unusual for Thomas Cook to put customers on Virgin Atlantic flights - and I dont know what Virgin Holidays would think about this either.

Interesting times, it would certainly be a major story if this came to pass.
#950286 by Dobbo
03 May 2019, 09:04
Deadline set for 7 May expressions of interest in the airline business (or businesses depending on how they propose to manage the sales process).

VS not mentioned, I think the only bit they’d potentially be interested in is the UK based long haul operation - which is a relatively small subset of the overall business.

https://uk.reuters.com/article/us-thoma ... KKCN1S749X
#950355 by FLYERZ
09 May 2019, 20:58
Whilst I see the benefits (and clearly so do VS execs) clearly of similar aircraft, destinations that VS current/previously serve across Mexico, US and Caribbean I think all of this would be too much in one go for VS:

1) Flybe
2) Air France-KLM relationship
3) TCX Acquisiiton

I fear that all of this going on at the same time could bring troubles for VS. Just think of the number of airlines/other businesses that have collapsed over the years after trying to grow too big, too fast!
#950358 by evanspa1
09 May 2019, 23:54
https://news.sky.com/story/virgin-atlan ... e-11715547

Interesting that under Shai VS is more aggressive in terms of acquisitions and new routes
Last edited by mitchja on 10 May 2019, 05:17, edited 1 time in total. Reason: Merged with existing thread
#950364 by Fuzzy14
10 May 2019, 11:35
mitchja wrote:I’ve merged these into one thread.

Thanks, I had a look but couldn't see it (because I looked under Departure Lounge).

TCX have got such a complicated operation with leased aircraft and variable cabin standards, the devil is going to be in the detail. What exactly would VS be getting for the money and could they do it themselves for cheaper?
#950365 by VS075
10 May 2019, 13:17
Fuzzy14 wrote:
mitchja wrote:I’ve merged these into one thread.

Thanks, I had a look but couldn't see it (because I looked under Departure Lounge).

TCX have got such a complicated operation with leased aircraft and variable cabin standards, the devil is going to be in the detail. What exactly would VS be getting for the money and could they do it themselves for cheaper?


Focusing specifically on the long-haul part that VS are interested in, they will get routes to destinations that they don't currently serve, remove a competitor out of MAN in particular and be able to take more VH destinations "in house" by being able to offer flights on VS aircraft which they can't do at present such as the Dominican Republic. If Thomas Cook continue to book its passengers on VS flights to its former destinations, that's a guaranteed revenue stream and less risky compared to launching a route by itself.

Additionally, some of the Thomas Cook A330's are almost 20 years old and a few of them were first delivered to Airtours (anyone remember them?) and remained in the fleet during the MyTravel era and after its subsequent merger with Thomas Cook. When you factor in the native A330's, it gives VS buying power with Airbus and Boeing as there will be approx. 20 aircraft that will need replacing instead of 10-14 at present. I can see an RFP being issued in the next year or so. The long-haul crew will already be type-rated for A330's which will cut down the amount of additional training needed during the integration process plus costs. Finally, their A330's have RR engines like the native -300's which will help with maintenance costs and spares commonality.

I expect one of the first things they will do is refit the aircraft to make the product in line with the rest of the native VS fleet. I believe some of the A330's that were first built for Airtours had toilets under the main cabin. Does anybody know if they still have these?
#950392 by CHill710
11 May 2019, 18:00
VS075 wrote:
I expect one of the first things they will do is refit the aircraft to make the product in line with the rest of the native VS fleet. I believe some of the A330's that were first built for Airtours had toilets under the main cabin. Does anybody know if they still have these?


Yes they are still in the air. A colleague went to Cuba on one a few months ago. Said it was weird the toilets were downstairs
#950397 by Dobbo
12 May 2019, 10:45
I’m slightly sceptical as to the compatibility of the TCX fleet with VS, and whether it is a bona fide asset in any sale. If this proceeds (and possibly in any event) I’d not be surprised to see VS top up their orders of B789 and A35K (rather than order A330 NEOs).

I suspect the main assets of of interest to VS would be instant scale and customer base at MAN (LGW and GLA to a lesser extent) particularly on some of the leisure heavy routes to Florida, the Caribbean and Vegas. It is symbiotic to the connect airways acquisition - in the sense that the one makes the other more attractive and vice versa.

Whether they will take the opportunity to increase frequency to JFK, or reopen SFO, or open historically strong VS routes like MIA and SEA from MAN remains to be seen. The main question I have is will they then look east...
#950421 by VS075
14 May 2019, 12:29
Dobbo wrote:I’m slightly sceptical as to the compatibility of the TCX fleet with VS, and whether it is a bona fide asset in any sale. If this proceeds (and possibly in any event) I’d not be surprised to see VS top up their orders of B789 and A35K (rather than order A330 NEOs).


I expect any sale to include aircraft whether they are owned or leased. I agree that additional 787-9's and A350-1000's seems the obvious and logical replacement, but considering there's the native fleet to consider a new RFP will at least encourage competitive pricing. At least with A330neo's there should be less training involved than converting A330 crew to A350 and especially to 787. I guess it will depend on pricing and availability.
#950437 by Dobbo
14 May 2019, 21:38
VS075 wrote:I expect any sale to include aircraft whether they are owned or leased. I agree that additional 787-9's and A350-1000's seems the obvious and logical replacement, but considering there's the native fleet to consider a new RFP will at least encourage competitive pricing. At least with A330neo's there should be less training involved than converting A330 crew to A350 and especially to 787. I guess it will depend on pricing and availability.


Good point.

Whether it makes sense to have a future hypothetical widebody fleet (assuming the arbitrary figure of 50 airframes) of:

17x B789
12x A35K
21 x A330neo

Or

20x B789
30x A35K

Or some other division of the above will depend on the higher costs of having an additional fleet type versus the costs of having a more expensive fleet type and the short term costs of crew training.

If the Thomas Cook long haul acquisition comes to pass it will be fascinating to see how it all fits in with Connect Airways, their plans at MAN etc.
#950439 by djack8
15 May 2019, 10:16
Interesting to read in the following article that there has been mention of a cash injection into LIAT, who are based in the Caribbean. I cannot see the sense if this was true, given the size of LIAT's network, very low feed to the VS network out of the Caribbean and of course, massive losses being made by LIAT. This coupled with the political interference of certain Caribbean governments, I personally think it's a recipe for disaster.

I have used LIAT numerous times and have always found them to be good, however you read very different experiences to my own.

https://www.google.co.uk/url?sa=t&sourc ... oebNub02Wl
#950458 by Dobbo
16 May 2019, 09:01
Two points / thoughts:

1 - I wonder if the investment in LIAT might be part of a wider strategy (eg - for VS to become a more dominant player in bringing people to the various Caribbean islands).

2 - Thomas Cook group (as distinct from the airlines) reported a £1.4bn loss (£1.1bn of which is a paper write down). Even if VS’s bid for the long haul section does not succeed, there is reason to believe VS can grow into their shoes anyway. This likely puts VS in a strong bargaining position.
#950460 by tontybear
16 May 2019, 11:02
I read that article. VS is over 30 years old. Does that still make it an 'upstart'? lol

Thos Cook I could see as being a good acquisition - especially the LH business if they could get just that. Short haul could be too much of a distraction especially immediately after the FlyBe purchase.

LIAT - never heard of them. KLM has a few of Caribbean routes as does AF so perhaps that's the reason for the investment and it may be politically easier for VS to get involved rather than KL and AF due to the Dutch and French Governments stakes
#950462 by djack8
16 May 2019, 14:53
tontybear wrote:I read that article. VS is over 30 years old. Does that still make it an 'upstart'? lol

Thos Cook I could see as being a good acquisition - especially the LH business if they could get just that. Short haul could be too much of a distraction especially immediately after the FlyBe purchase.

LIAT - never heard of them. KLM has a few of Caribbean routes as does AF so perhaps that's the reason for the investment and it may be politically easier for VS to get involved rather than KL and AF due to the Dutch and French Governments stakes


Good point re. KLM/AF routes to the Caribbean. I never even gave that aspect a thought.

Dan
#950531 by Dobbo
22 May 2019, 12:21
Based on media reports it is possible that Thomas Cook could become a distressed sale.

The cash flow of TCX seems okay, but much has been made of the write down of goodwill following an historical acquisition (a paper loss). This seems to have set tongues wagging so let’s see how VS play their cards on this.
#952189 by VS075
13 Sep 2019, 15:00
Dobbo wrote:Seems like we are approaching crunch time with Thomas Cook. If VS are interested in the long haul from MAN, the time may be now (if the price is right!)...

http://travelweekly.co.uk/articles/3426 ... ing-to-1bn


To be honest, I know the airline side of things is reported to be profitable, but if Thomas Cook really are teetering on the brink it could be argued that VS and other potential suitors should wait until they collapse before going in for the bits they want instead of taking on a bigger chunk or the whole lot. We saw this with Monarch after they collapsed with slots, routes, aircraft and crew being snapped up by those who wanted them. Additionally, VS (or specifically the consortium they had a stake in) are probably still digesting Flybe and only a due diligence process would reveal what state Thomas Cook are in and what's needed to turn them round.

All that said, I do feel for the staff working across the business as nobody really knows what's happening next.
#952196 by Dobbo
14 Sep 2019, 09:31
Agreed - if VS think TCX are going to go to the wall and there are no other interested buyers, they might as well wait for it to collapse and pick up the bits they want (if any).

If VS think TCX will survive in some way shape or form, agreeing a price for a profitable part of the TCX business is going to be tough. TCX will want to realise a capital return (cash) but VS won’t want to pay over the odds for something they can compete with buy acquiring more airframes (which they are doing anyway) and which wouldn’t block a new market entrant.

That said - it’s taking ages for any tangible Connect or MAN S20 news. I think the clubhouse was handed over to VS for fit out this week so maybe official News is coming soon...
#952206 by ColOrd
14 Sep 2019, 21:00
I don't understand why they wouldn't be publicising the opening of a CH? The last new CH that opened was LAX and that was announced months and months in advance and the same with the latest DL Skyclub in Haneda. Im not saying you're wrong, but it goes against what they have done previous.
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