Rumour: More Virgin-Delta route swaps

Hi all,

I've heard from a few people a rumour that Virgin and Delta are going to swap another route, like the LA and Atlanta swap.

The two possible routes for VS to give up that I've heard are SFO or MIA.

I doubt VS would want to give up either of these routes! But apparently Delta are putting a lot of pressure on the subject.

Anyone else heard anything along these lines?

I would be very surprised from this from VSs point of view. LA happened, or so I thought, because they have x2 daily flights. I really couldn't see why VS would accept replacing a x1 service to SFO or MIA (both which are very popular) for a DL route. After all this would mean that VS metal would stop serving one of these destinations. Looking at the LHR DL routes this would be Seattle, Minneapolis or Detroit. All of which IMHO are much weaker yielding routes

Yes Detroit or Minneapolis is what I've heard. It seems that Delta want to gain something in the short term from their investment in VS.

I think I understand business pretty well, but as a 49% owner of Virgin Atlantic I am very surprised at how much they seem to be able to dictate to VS. I understand that over time we may expect to see VS align with DLs hubs but it just seems a bit aggressive DL swapping with VS routes. It seems particularly unfair as the VS routes are to stronger markets e.g. MIA, SFO, IAD .etc whereas Deltas hubs barring NYC and ATL are far inferior in terms of demand. And actually to me it doesn't make sense. This would see DL no longer serving London from one of their hubs, instead taking over at a destination with far fewer if any connections namely MIA.


Whilst I love VS and continue to strongly if this is true I strong object. Whilst the x2 swap to x1 LAX, I can live with, VS leaving markets and handing them over to DL I don't like the sound of. And from what I can see VS is the one that will lose out. As the much smaller airline in terms of passengers, routes .etc pulling out of some of the strongest UK-US markets is a joke! When did you last hear a Brit saying 'next Easter we're saving up to go to Detroit' or the same with Minneapolis or Seattle. I'm not questioning your credibility but to me it doesn't make sense.

No it doesn't make sense. And it's only a rumour. That's why I was asking if anyone else has heard anything.

[preiffer]

It's sad that we even think it's a possibility - rumour or not.

VS now has a flat, dull, CEO and are also married to an airline who fly to some, to put it politely, rather "unglamorous" locations (and are clearly forcing those destinations upon them).

Despite all the glitz and fun around the 30th Anniversary (interesting seeing Craig K's awkward body language when set against the showmanship of SRB) it just feels like the shine is now gone.

I hope I'm wrong - but the fact I'd put 50/50 odds on the above being true really is a bad sign in my view.

I really do hope that VS aren't strong-armed into giving up their SFO flight as it's my most frequently used route making the trip over to Tahoe a couple of times a year since my first VS flight in 2002.

It sounds like a really bad idea for VS, but I would be surprised if a 49% shareholder (where the other 51% is all held by one other shareholder) would have the power or influence to force this through if the deal wouldn't make financial sense for Virgin.

Out of curiosity, may I ask where these rumours might be from?

I think the shareholder split can be confusing especially when the larger half has been performing very badly financially. I remember reading somewhere that it's was Deltas stability and financial clout that allowed VS to raise the finance for the aircraft.

I fear that unless Vs really starts to make serious money that DL will be calling the shots more and more

Whatever the working relationship is between the 2 companies, the temptation for Delta to do this kind of thing must be big.
They are one of the big 3 in the US, the name of the game is to have the maximum share of the main transatlantic routes.

When they operate the secondary routes it is because they cannot get any more penetration of the key routes.
They must see Virgin as a niche player,the word niche in this case probably means holiday routes and "niche" destinations.

Out of curiosity, may I ask where these rumours might be from?

Crew and airport staff. 1 from VS, others not.

Losing direct flights to places like SFO or MIA, such a key part of VS's history, would indeed be very sad.

But we are where we are. VS is still losing money and however "flat and dull" you may consider Craig Kreeger to be, he has to turn the business round. Which he is.

Detroit and MSP may not be sexy destinations for the average Brit, but that misses the point. It's all about providing connections across the US and beyond, and for the first time the JV with DL allows VS to do that effectively and compete a little more evenly with BA/AA.

I believe Craig Kreeger and DL understand very well how important it is for VS to be a bit different. They're investing in new planes and Clubhouses for a start. But they also know that to survive in an increasingly competitive market, VS can no longer be just a British holiday airline, which many still perceive it as.

It needs above all to attract more American passengers, and to do that it needs to be seen as "Delta's sexy British cousin", offering flights to London from DL's main hubs.

I think the other thing that keeps being missed is that the transatlantic is a joint venture so profits are shared - and that means operating in the interests of all pax on the routes. Looking after British pax may come a very poor second.

This could come to a very bloody end.

Avid readers will know what I do for a living... and one of the most important aspects about an airline operating under a UK AOC (Air Operating Certificate) is that it must be 'effectively owned and controlled' by UK nationals (although there is flexibility about EU nationals).

Now if DL keep doing this sort of nonsense, someone in the CAA is going to question who has effective control. If I was in the CAA, I would have already asked some awkward questions about that LAX/ATL swap, that seems to make no commercial sense for VS...

Well, things have clearly changed and DL is bringing a lot more to VS than the share purchase - one thing I've no doubt they are brining is data, data that to them shows that if VS flies instead to one of their hubs, then seats and yields will increase. With a proper airline businessman running the airline that is more compelling perhaps than VS's 'legacy'. If profit is number one, and we assume it is, wouldn't you shift your assets to where you can make more money.

That said, SFO and MIA are not really DL's strongest airports so they in turn may find it difficult to compete.

I do hope it is not true though. My first VS flight, booked in PE and op upped to Upper was to SFO many years ago and I would be extremely sad to see VS leave. I thought the second flight last year was a great addition, for VS to disappear from there especially with onward connections on VX would be a real blow and a significant step to shifting allegiance away from VS/DL.

If it does come down to ditching SFO or MIA, difficult to say which they'd go for.

SFO seems the busier route - busy enough to justify 2 daily flights in the past - and has a Clubhouse and 9 or 10 DL routes - yet it's presumably considerably more expensive to operate and requires two 747s to maintain a daily service, which as we know are going next year.

MIA is cheaper to operate as it can use the A330, the rotation can be done in 24 hours (so in theory only needs one aircraft) and - I think but ISTBC - the VS5 just comes within the 9.5 hour cut-off that determines whether the crew are down route for 1 night or 2. On the other hand it has very few DL connecting routes and would arguably be adequately covered by MCO which is relatively close and has plenty of spare VS capacity outside school holidays.

Difficult call.

I think the other thing that keeps being missed is that the transatlantic is a joint venture so profits are shared - and that means operating in the interests of all pax on the routes. Looking after British pax may come a very poor second.

That also, of course, means it is not in DL's interests to increase their own profits at the expense of VS. It is in their joint interests for both airlines to maximise their profits.

I can't see VS dropping SFO or MIA.

I have no insider knowledge and it is just my speculation, but if anything I would expect DL to start a second frequency to those destinations to compliment the VS service. Likewise VS starting service to MSP or DTW. DL seem to have a liking to buying LHR slots so I guess anything is possible.

I can't see VS dropping SFO or MIA.

I have no insider knowledge and it is just my speculation, but if anything I would expect DL to start a second frequency to those destinations to compliment the VS service. Likewise VS starting service to MSP or DTW. DL seem to have a liking to buying LHR slots so I guess anything is possible.

I completely agree with you. It only makes sense to consolidate e.g. DL joins VS in SFO and MIA or VS joins DL in MSP or DTW, though I would've thought UK demand for MSP/DTW is much lower than US for SFO/MIA -LHR

I can't see VS dropping SFO or MIA.

I have no insider knowledge and it is just my speculation, but if anything I would expect DL to start a second frequency to those destinations to compliment the VS service. Likewise VS starting service to MSP or DTW. DL seem to have a liking to buying LHR slots so I guess anything is possible.

Your guess assumes that DL or VS can acquire a pair of slots at attractive times to do this, and they are v v v expensive. I don't think that will happen. More likely is that DL and VS look at their slot allocation, route network etc and work out which makes the most dosh. Hence, changes not additions.

I read somewhere - or it may have been the man in the pub - that VS are reducing their flights which require a longer stopover for crew.

The thing is, VS lost a shed load of money in recent years, so the set up they has wasn't working. A lot of that was due to high costs. I think we are seeing an effort to minimise those costs.