VS's future

[Scrooge]

After reading a couple of threads and doing a little thinking I am left wondering where VS is heading in the near future.

With BA expanding it's network as can be seen HERE and HERE and VS cutting back as can be seen HERE what does the future hold ?

Is VS relying on it's history to support itself during these troubled times and will it come back to haunt them in the few years ?

Should they have picked up the QR 343 HERE to help with a mild expansion as BA is now doing with a spare T7 ?

Should any routes be dropped in favour of what we see as routes where there is higher demand and more money to be made ? or do we wait until the 788's arrive ?

A lot of questions I know, but it should make (fingers crossed) for some spirited debate.

[mitchja]

I really dont think VS have anything to worry about. I think they are just keeping things as stable as possible at the moment.

I just think BA are now seeing the potential of leisure and holiday routes. VS with help from VH, spotted this a long time ago and it's done very well for them.

The BA holidays side of BA never really seems to have done as well as VH.

It really doesn't bother me that VS are not announcing new routes. Yes, it would be nice but I think VS are doing the right thing in the current climate and just concentrating on their existing route network.

I personally think BA are taking big risks by starting new routes especially when they are making record loses.

Regards

[Neil]

VS really don't need to take any risks at the moment, they are the ones who have just announced increased profits, where as BA have announced record losses, a decrease in premium pax numbers, so they have to do something to turn that around.

I don't think we will see Virgin do anything major at all in the next couple of years. The next big thing for Virgin will be the arrival on the 787's, then it will be interesting. The current 747 fleet will be getting on a bit by then, and with the holding off of the LGW re-fits it seems to suggest Virgin are looking to replace them. Also with the number of a/c on order, they must have plans for some new routes otherwise there is going to be a lot of a/c not doing very much.

I know Virgin have been slated for a lot of things on here, but I honestly think that they offer a very good premium (J) product, with food being the major concern still, PE is still right up there with the best, and Y, is well Y, if you want to pay 300 for a seat then in my opinion you can't expect much more than the basics.

I think Virgin just need to keep doing what they are, we can't forget how tough the time are for the industry at the moment, and I would much rather see Virgin stay as they are, with a few small cut backs, and be here when it all calms down, then see them take unnecessary risks and things go belly up.

Neil

quote:Originally posted by Neil
VS really don't need to take any risks at the moment, they are the ones who have just announced increased profits, where as BA have announced record losses, a decrease in premium pax numbers, so they have to do something to turn that around.


The difference in profits was due to the use of different accounting standards and exceptional items. From what people who actually looked beyond Virgin's triumphant press release have established, Virgin is doing no better than BA.

http://www.ft.com/cms/s/0/c1d79142-49c8 ... abdc0.html

Also, Virgin does not publish detailed monthly passenger statistics like BA does, so no-one really knows how its doing in terms of premium numbers.

At the moment, I don't think you can expect Virgin to do anything more than tighten its belt and bunker down. BA's expansion into new routes is pretty marginal stuff in the grand scheme of things.

Long term, I think the problem for Virgin is that competition between airlines is increasingly on the basis of alliance membership. Star Alliance and Oneworld are expanding and status on member carriers is a big benefit.

Also, at the moment Virgin can only expand at LHR by acquiring slots from other airlines, and the cost of this has surged post Open Skies.

There is the chance of a deal with BMI (if Lufthansa want to do a deal), but as they lost nearly 100m last year, I think that could be a very high risk.

Having flown Virgin many times over the last few years I agree a fantastic PE product, Y is Y and hopefully when i get to experience my Upper Class, which frankly I can't wait for! I dont think BA will do so well with regards to the holidays it doesn't fit with the BA product.

Having read on here there are quite afew cut-backs in the virgin product as a whole, I havent experienced any, but well see what happens when I travel in (Z). I think playing it safe is the better option if there are opportunites for Virgin to take advantage, which SRB mentioned thinking one big airline in the recession will go bust and then Virgin a smaller airline can expand.

I also agree with the arrival of the 787's it will be interesting to see what happens along with the a380 something i'm looking forward to seeing a virgin tail on.

Also British Airways is obviously becoming more desperate SALE with the 100 off wt and 200 off cw and now new routes something isn't making sense. Will the UK government be drafted in to save them like the banks? [V]

Virgin just keep giving better customer services and the 'sparkle' and be a stronger airline ready to increase when the time is right.

The interesting future will of course will Virgin need to finally be established in an alliance? [?]

Alex

[Nottingham Nick]

quote:Originally posted by Leo1977
...The difference in profits was due to the use of different accounting standards and exceptional items....


Throughout the history of the Virgin empire - clear and open accounting has never featured prominently. [;)][:D]

I tend to agree with James and Neil - much though the recent cuts on all levels have been hard to take - they are clearly trying hard to secure the long term future of the airline.

Now isn't the time to start flashing the cash again IMHO. Another period of consolidation then, when the time is right, (that's the difficult bit) start doing things to woo back any customers lost in the difficult days and reward those frequent pax who remained loyal during this time.

This is where he crystal ball come is useful. [}:)]


Nick

You know, y'all are very kind about VS but year on year I pay more for my tickets and get less and it's beginning to irritate me.

So, airlines are having a hard time, people can book far in advance and take the yields down with sale fares. I usually book in the short term for business at J / D or W fares and I can tell you - it's costing me more for less. And don't get me started on VS's rip off surcharges!

Why should I wait for VS to invest in service when I see others doing it all around them. And Neil, smoke and mirrors with accounts means nothing, even VS stated that traffic plummeted in their Q4.

For those who travel once a year, you may not care or notice the changes, for those of us who travel at vast cost monthly and more we do notice. What am I - a charity for VS's benefit? See my comment in the The Clubhouse about draining my VS goodwill!

Rant off.

Sorry [B)]

[mitchja]

Why keep flying with VS then Slinky?

Regards

quote:Originally posted by mitchja
Why keep flying with VS then Slinky?

Regards


You know, it's a point I have begun to ponder deeply [:?].

A very interesting subject.

I'm afraid I disagree with most but do have much sympathy with slinky.

Now is (almost) exactly the time to invest. The opportunities are there but they will rapidly disappear when the upturn comes. SRB should be ideally placed to fish the bottom of the market.

Costs of LGW refits will never be lower - both the cost of getting the work done and of aircraft out of service. Same with an extension of the CH network. It must be sometime this year or the beginning of next - just a question of when.
When someone in the industry decides the slow-down is over there will be a very rapid change. Is VS going to drive that change or be led by it? VS offer a premium service over the charters, at a premium price - but they can only succeed in this if they maintain the edge over that competition. This is the bread & butter for Virgin; they have successfully maintained load factors on their main routes, but if the image changes further they could make major losses. Anyone reading The Dibb can see just how fickle that market is.

The jam comes from the LHR routes. VS have successfully competed in the business sector. CH and service have continued to attract bookings. But as slinky's post shows, they cannot afford to let service slip.
Other airlines have cut prices and made losses. What happens if they use this opportunity to match (or exceed) the VS offer?

The airline business IS Risk!
VS need to look in the long-term as well as the short-term.
Anyone who thinks they can play safe will surely fail.

So VS must take risk and invest in order to survive - but the big question for SR & SRB is When?
I just hope they still have the balls to make their move in time!

[ChuckC]

So, everyone, if you were to give VS advice as Bill has done, regarding the question Scrooge has posted, what would you advise?

Chuck-

I agree with Bill - investing in a down turn means you can be first to benefit from an upturn.

Being purely selfish - some sort of CH at MAN would be nice.


quote:Originally posted by ChuckC
So, everyone, if you were to give VS advice as Bill has done, regarding the question Scrooge has posted, what would you advise?

Chuck-

quote:Originally posted by slinky09
quote:Originally posted by mitchja
Why keep flying with VS then Slinky?

Regards


You know, it's a point I have begun to ponder deeply [:?].


Gotta say I'm with you on this one Slinky.

The days of looking forward to ths VS flight experience have all but evaporated for me: quite frankly, I'd rather stay at home.

H

[Darren Wheeler]

'"Review the business top to bottom'

Not just to save costs as that is what every business should every single day

I think we covered some of this in another topic and it was mentioned there many of the things that could be done that cost nothing which would help a lot of the issues now - greeting by name at the door, saying hello to golds - in ALL cabins, a change in the terms and conditions of the companion vouchers or an odd clubhouse invite etc, etc

But VS IS needing to spend money - if only on the lgw fleet if nothing else.

After arriving in MCO yesterday on Barbarella, yes one of the 'old' 'knackered' planes, it really is clear that the interiors are worn out. I have no problems with the mechanical maintainence of these things, yes they are relatively new but you mst assume that although they are well used, they are looked after well in the mechanical department.

The biggest gripe we all continually hear is about the interiors. The few mutterings that you used to hear are now a daily, if not an hourly ocurrance.

The leisure market appears to be holding up reasonably well - certainly our flight was chocka to bursting and the others looked pretty full as well - this was one of these special days when the jumbo's at Orlando nearly outnumbered the jumbos at Gatwick.

Its time now to complete VS's strangle hold on this market by updating the interiors, the days of saying P/E seats in the bubble are very comfortable even if they are not the new purple leather ones are over - these seats have done their duty and should be retired.

The entertainment, whilst being as steady as a rock in Nova form is also dramtically needing replaced.

I am sure that the contracts for these would be very keenly priced at the moment.

Yes VS, you need to invest now, but there is also many many things you could do which would make us, as passengers feel much happier that would cost you nothing !

David

[buns]

I do like the PE seats on the LGW fleet, but I have to agree that the interiors do get an awful lot of bashing and could well do with sprucing up[:(]

I remember the time when VS was the innovator with individual screens, free headphones (that you could keep[:0]) and the PE product itself. The market has caught up and in some instances is easing ahead VS[V][V]

[RichardMannion]

Insert auto-repeat answer #2:

It's one thing to attract/entice a customer (usually with a low price), but it's a whole different game to retain a customer (loyalty).

Another interesting 'change' I did hear about the other day is that you can only contact Customer Relations via phone if you are FC Au, otherwise its the trusty letter or e-mail.

I would advice that its time to take the risk and come out of the recession stronger. As many of you say Id refit the LGW fleet and maybe install water fountains on them, thus reducing the crew workload to ease the pressure. Go back to basics and sort out the little things that matter. With less flights now the airline ahs more time to spend on refresher courses for crew and staff to introduce new service features and alike. Also maybe get a cheaper extra A/C to launch some new leisure or leisure/business routes like BA are to capitalise on the need for Holidays. Even if the flights arent particularly busy now, its a great time to make a name for yourself.

[Nottingham Nick]

I think the VS of old - the risk taking, innovative, brand leading company that used to be run by an Entrepreneur with a flair for publicity and an apparent Midas Touch; may have taken the risks and spent the money.

The current hum-drum 'just another airline' run by beancounters and grey suits? I somehow doubt it. [;)][8D]

Nick

I find it hard to justify buying a PE seat now - its just a little more legroom, but the same food and virtually the same treatment. With flights being half empty, if you have your wits about you, you can get a row of Economy seats, and lay out flat for a good sleep. something you cant do, while paying double the $ in PE, with the fixed armrests. Its got to be full UC or Economy for me, in between is worse than either.

basically the problem is this: I would RATHER be stretched over 3/4 seats of Economy, than my single PE seat, with its fixed armrests, every time, regardless of cost. VS have to do something about that fact, like making upgrades for Au folks from PE to UC much more frequent, OR make PE to UC upgrades easier to buy with miles, with no restrictions.

They should try that for 3/6 months and see how it works. Happy regular flyers bleat about it to all their friends and increase your business all round.

I can assure you that the Virgin crew are crying out for the LGW/MAN aircraft to be refurbished - especially on the IFE front (but closely followed by the PE cabin, given that Virgin Holidays use their main PE pictures of the purple LHR fleet PE seat).

I am also told that the management response to these pleas for some TLC on the LGW/MAN fleet is generally silence (on the VS internal staff intranet / discussion board).

Apparently the management seem to believe that if the crew smile non-stop, then passengers will continue to come back. (Despite all the cutbacks in service, dodgy IFE, old/worn out PE product etc)

James

[Nottingham Nick]

quote:Originally posted by Kraken
Apparently the management seem to believe that if the crew smile non-stop, then passengers will continue to come back. (Despite all the cutbacks in service, dodgy IFE, old/worn out PE product etc)

That really does seem to sum it up. There is a massive break down in communication somewhere along the line. The crew on the LGW / MAN planes are doing their level best, and at the same making their feelings known about the faulty IFE etc. Then somehow, as the message is passed up the management chain, everything in the garden is rosy and the long term future of the airline is secure. [?]

Nick

[Scrooge]

quote:Originally posted by Kraken

Apparently the management seem to believe that if the crew smile non-stop, then passengers will continue to come back. (Despite all the cutbacks in service, dodgy IFE, old/worn out PE product etc)

James


The sad thing is, your right, the sadder thing is, nothing will be done until the pax loads go through the floor for an extended period and with VH pumping people into seats will that happen ? Probably the only way is if the VS reputation goes to hell in the main stream public's eyes.

Can anyone remember when the leases are due on the LGW fleet ?

[Darren Wheeler]

I do recall reading somewhere that they were renewed very recently. Can't find where though.

[Scrooge]

Yeah, for some reason I am thinking it was last year, leased for another 5 years.

I am also wondering when they are due a C/D check which will be the time to get this stuff sorted.

As the 789's are not due into the fleet until 2013 and there is no sign of any T7's the LGW fleet will have to just keep going.