Sunday Times reporting LR to close

I have just got off the LHR MAN. The crew say they have called VS who say it is not true but they think it is a little strange to say that little red will close.

Would be a shame if they do go some of the best flights I have been on have been little reds.

(Waves to gumshoe upstairs!)

Waves back!

Yes the crew (presumably the same as yours) seem as surprised as everyone else - they've certainly not been told anything and say it's business as usual as far as they're concerned.

I really do hope the Sunday Times are wrong. But they're obviously confident in their sources - a respected Sunday business section doesn't win credibility if its lead stories turn out to be wrong.

Really hope this turns out to be just some poor quality reporting - with the move to T2 LR is the ideal way to connect to/from Star Alliance flights - I've got some trips planned onto SQ with them in the coming months!

I feel very sorry for Virgin as regards this. I've been in a similar position at an airline I worked at.

Bottom line is that this story will harm bookings - it's bound to. VS need to say something formally, but it really is one of those 'have you stopped beating your mother' things - saying something, even denying it - adds bandwidth. What they need to do, if this story has not a grain if truth, is to sue for damage to the business (which with a year of trading is pretty easy to calculate, or at least estimate).

If VS stay quiet, then this story has some truth - it may be that they do intend to close LR but not for a year or so - but fighting a defamation case means VS may have to disclose strategy.

Silence from VS will not be golden.

The Telegraph has picked up the story now - again, though, no named sources and very few facts other than out-of-date CAA load statistics.

http://www.telegraph.co.uk/finance/news ... rline.html

I have just got off the LHR MAN. The crew say they have called VS who say it is not true but they think it is a little strange to say that little red will close.

Would be a shame if they do go some of the best flights I have been on have been little reds.

(Waves to gumshoe upstairs!)

Waves back!

Yes the crew (presumably the same as yours) seem as surprised as everyone else - they've certainly not been told anything and say it's business as usual as far as they're concerned.

I really do hope the Sunday Times are wrong. But they're obviously confident in their sources - a respected Sunday business section doesn't win credibility if its lead stories turn out to be wrong.

I really do hope the Sunday Times is wrong too. The LR crews (certainly out of Manchester) are simply fantastic. I know like others, I am a regular and know most of the crew by name and likewise they do with me, but they have consistently provided a great experience compared to some of the long haul flights with VS.

What is needed is a very strong denial and within the next 24hrs or I fear this story will run.....which clearly is the worst possible news.

From what I know loads are have grown and are growing - EDI is way above expectations and MAN has earned a great reputation as gumshoe says, as contributing the most connecting pax onto the long haul network.

I really hope this isn't true but I will back on board on Wednesday so hopefully we will all know more by then.

Jon

The Times has a follow-up story this morning. The only new line is that "industry sources say Virgin has been discussing options for Little Red with partners and suppliers", one of which said "closure is on the cards and looking likely".

Sounds to me like the story's come from Aer Lingus. But ending the wet lease partnership with them wouldn't automatically spell the end - maybe another partner with smaller planes and an existing UK route network would work better for VS ...

The Telegraph has picked up the story now - again, though, no named sources and very few facts other than out-of-date CAA load statistics.

http://www.telegraph.co.uk/finance/news ... rline.html

And again, another report which along with mentioning dire load factors, then mentions how important bmi was to VS before it fell into the hands of IAG.

So does VS need Little Red or not?

I find that booking EDI-LHR at 4-8 weeks out, VS-LR is always cheaper than BA. Sometimes by a lot.
The base fare for the route has increased a little, from £88 rtn to £97. But I think the market would tolerate a little more, esp with BA pricing higher as far as I can see.

This story has now been picked up in about 150 publications, online and in print. Virgin need to say something NOW otherwise this is going to be a self-fulfilling prophecy. Stories like this hammer forward loads and (forgive me for the technical geek speak) airlines live in negative WIP. Hit your forward loads and the manure looms.

They have posted on their FB page:

"Hi Rebecca,
No changes have been announced on the Little Red network and all flights are operating as normal. We've received great feedback about Little Red, particularly the quick and hassle free connections to our long haul flights from Heathrow. In response to the speculative story, all we can say is that we look at Little Red through the same lens as the rest of our business, it must deliver on performance along with financial and strategic contribution. Little Red is still in its growth phase and it is therefore too early to comment.
Howard"

[honey lamb]

My understanding is that VS are pleased with the growth on the LR routes and while review is ongoing between VS/EI there is nothing to suggest closure at present

They have posted on their FB page:

"Hi Rebecca,
No changes have been announced on the Little Red network and all flights are operating as normal. We've received great feedback about Little Red, particularly the quick and hassle free connections to our long haul flights from Heathrow. In response to the speculative story, all we can say is that we look at Little Red through the same lens as the rest of our business, it must deliver on performance along with financial and strategic contribution. Little Red is still in its growth phase and it is therefore too early to comment.
Howard"

Not exactly a 'smack down' of the story is it?

The Facebook response leaves it totally open. The end is nigh I fear.

I agree... "no change has been announced" is not a confirmation that would fill me with any confidence.

I am a fan of the LR service, having used it a couple of times so far (and am/was planning on using it more in the future). I really hope that the rumours aren't true!

Could it be possible that Virgin are trying to reduce the fee they pay Aer Lingus to operate with the threat that they will close it if they don't. Might link into talk of extending for a further 2 years.

It's quite unusual timing, the Scottish independance poll is next week and might be a game changers as a yes vote would result in a lowering of passenger air duty for Scottish flights. There may certainly be scope for negociation with the Scottish government over 'sweeteners' to provide an alternative to BA. They should wait at least until 18 September before making a decision as it could be a game changer.

Can't see that. If (and it's a big if) VS are considering chopping LR, it will be for reasons of yield and load. The last thing any carrier is going to do is to put a huge question mark over routes, since that hammers the bookings. Note the way VS kills off routes like BOM, YVR, CPT etc - bang, gone. No 'oh we're considering the future'. That's the way the industry works, and VS is behaving in a standard way on this.

They won't be trying to get a better deal by making vague threats in the public domain unless they are idiots - and for all my reservations about VS, their customer service, strategy and their product, the people who make the key decisions are far from being idiots.

It's quite unusual timing, the Scottish independance poll is next week and might be a game changers as a yes vote would result in a lowering of passenger air duty for Scottish flights. There may certainly be scope for negociation with the Scottish government over 'sweeteners' to provide an alternative to BA. They should wait at least until 18 September before making a decision as it could be a game changer.

The reduction of APD is a policy aspiration of the SNP and not the YES campaign. The two are not the same.

It does not automatically flow that if there is a YES vote that APD would be reduced. It would depend on who won the 2016 Scottish Parliament elections and what their policy was.

Even then it would only affect flights from Scotland. Flights from rUK would still have the existing rates of APD applied.

My understanding is that VS are pleased with the growth on the LR routes and while review is ongoing between VS/EI there is nothing to suggest closure at present

They're hardly going to invite EI to raise the price of the lease by looking desperate to keep LR flying! LR has been in its growth phase ever since it came out of its launch phase. It would be good to know when the growth phase is expected to end and a decision to continue with or without EI can be made; but why should an airline risk alienating its forward bookings and/or the confidence of its "shareholders"?

The reduction of APD is a policy aspiration of the SNP and not the YES campaign. The two are not the same.

It does not automatically flow that if there is a YES vote that APD would be reduced. It would depend on who won the 2016 Scottish Parliament elections and what their policy was.

Even then it would only affect flights from Scotland. Flights from rUK would still have the existing rates of APD applied.

Correct, this is in the white paper under the section what will happen if the current government is reelected in 2016, and even then it's only a 50% reduction at first with full abolition "to follow".

But with 2/3rd of LR flights flying to/from Scotland I thought it significant.

And I could go very off topic about likelihood of anybody else being returned to power in 2016!

[honey lamb]

My understanding is that VS are pleased with the growth on the LR routes and while review is ongoing between VS/EI there is nothing to suggest closure at present

They're hardly going to invite EI to raise the price of the lease by looking desperate to keep LR flying! LR has been in its growth phase ever since it came out of its launch phase. It would be good to know when the growth phase is expected to end and a decision to continue with or without EI can be made; but why should an airline risk alienating its forward bookings and/or the confidence of its "shareholders"?

Sorry but that's the most I'm allowed to say - that the review of the VS/EI service is on-going. I didn't say anything about the price of the lease so I don't know where you got that from