Some of the scope I hearedVirgin America

[tiktak]

Hi guys
some of the rumors I heard and have confirmed with some guys in Australia flying for Virgin Blue. I am flying in Asia right now and at my last flight check in Hong Kong I went out with the Virgin Blue pilots for a few beers. Man can they drink.
They gave me quite some off the scope.
I am not quite in the loop of all the small talk
1. The research and exploratory team is working in New Jersey.
2. A/C type is not yet decided but they lean towards 737/800 with winglets. They use those airplanes in Europe at Virgin Express and in Australia at Virgin Blue and they have still 85 on delivery schedule with options for more.
3.Interviews for 737 NG TRI's and TRE's already. (Rishworth Aviation is looking for Faa Licensed 737 Check airmen's in Australia, where any US certificate is worthless?)
4.Key mgmt in training in Australia at Virgin Blue.
5.Rumors are Mgmt is looking into the option of buying a Regional Carrier for the certificate and weak Union Contract.
The reason why they might be interested in buying a regional carrier is for the departure slots and then dumping the mayor US carrier.
So then Virgin America would purchase from its regional subsidiary the departure slots, let it fly the low revenue routes, let it loose money, and disappear.
All Employees work on a 3 or 5-year renewable contract. So forget Alpa.
Any regional jet you can sell in Asia for 105 to 115% of value. So they would not loose any money in breaking the aircraft leases.
The question is how difficult it would be to purchase a regional airline, disassemble it and retire it.
6. Business model calls for only to Hire 737 NG typed crews (those type ratings are about 15k, 10k if you can find a deal)
7. Looking to match pay scale to European and Australian Operations.
In Australia
Fo 87k aus$
Ca115k aus%
60% and you got the amounts in US $
In Europe
Fo 45k Euro
Ca 70k Euro
108% and you got the amount in US $
But the benny package is big.
So I do not know what they want to do pay scale wise in the US but I can guarantee it will be low.
They had problems with prime time departure slots out off Melbourne and Sidney and basically had to sell halve of the company to an Australian group, who were the major holders of Ansett remaining asset to fix this problem. Doing very well and expanding into Timor, Bangkok, Singapore, New Zealand and some Micronesia Islands.
In Europe there bases are Brussels and Rome.
The big government owned bankrupt carriers are loitering the prime departure slots. Take off and landings are limited in major airports by environmental reasons.
Brussels is virgin territory and the load factors are good and profitable.
Rome is an other story and Alitalia is loitering prime takeoff and landing spots to high revenue destinations.
Hope this answered some questions

If you know any thing else throw in your 2 cents

 

[Hose A. Jiminez]

Duz aney won no were thu spel chek butun iz ?

 

[tiktak]

La Migra, la migra

After my breakfast martinies my spelling is not so good.

 

[Hose A. Jiminez]

Una mas cerveza?

 

[General Lee]

Can anyone tell me how Virgin has done in each LCC arena? In Australia they have done very well, primarily because they had no LCC competition, Ansett--the number two national airline--had gone Chap 7 bankrupt, and Qantas was the only one left with high airfares. Virgin Blue was destined to do well. Now this is reversed in Europe, where Virgin Express has NOT done very well, and has retreated from a lot of the routes. The reason is because there are a lot of LCCs in Europe. It might be "hip" to fly on an airline with the "Virgin" brand name, but not in the Bible belt. Virgin will run into a lot of competition here----let's list some of the competition with LCC's---Southwest, Jetblue, Airtran, Frontier, America West, Spirit, Song, the new ACA, ATA, United Starfish, Hooters Air, Sun Country, and Midwest. ( I probably left a couple out, sorry) It will be interesting if they try to enter this arena over here.

Bye Bye--General Lee

 

[tiktak]

For Capt El Burrito
There is no spell checker and I got back from a 5 day trip in China.
In China you fly with real low time FO's who sat for 2 years in the jump seat observing.
They are not authorised to fly below 10000. and both auto pilots are Mel'd. Was a hard week.
Heading right now from Zuhai to Macao for dinner and to meet some friends
For General Lee
They had problems with prime time departure slots out off melbourne and sidney and basicly had to sell halve of the company to an australian group, who were the major holders of ansett remaining assests to fix this problem. Doing very well and expanding into Timor, Bankok, Singapore, New sealand and some micronesia Islands.
In Europe there bases are Brussels and Rome.
The big goverment owned bankrupt carriers are loitering the prime departure slots. Take off and landings are limited in major airports by enviromental resons.
Brussels is virgin territory and the load factors are good and profitable.
Rome is an other story and Alitalia is loitering prime takeoff and landing spots to high revenue destinations.
Hope this answered some questions.

 

[General Lee]

Tiktak,

And you expect them to get prime landing slots here? Where? At LGA? Nope. How about DCA? Nope. EWR? Probably not. Tell me where they can compete? Where is there room with new gates? Maybe COS. Give me your best guess.

Bye Bye--General Lee

 

[Heavy Set]

Securing sufficient gate space at popular airports is a huge challenge - as AirTran has found out (limited ATL space until the new terminal). You can bet that Branson has his work cut-out for him on this continent.... Buying ACA, if he could do it financially, would be one option given its gate-space in IAD and its existing infrastructure - BUT - Branson would rather start from scratch (his method) - good luck with that.... Hey, I'd like to see it work out in order to bring more pilots back on line but I am not sure about the odds.....

 

[tiktak]

I am flying in asia right now and at my last flight check in hong kong I went a out with the virgin blue pilots for a few beers. man can they drink.
They gave me quite some off the scope.

I am not quite in the loop of all the small talk.

The reason why they might be interrested in buying a regonal carrier is for the departure slots and then dumping the mayor US carrier.
So then Virgin America would purchase from its regonal subsidary the departure slots, let it fly the low rev routes, let it loose money, and disapear.
All Employees work on a 3 or 5 year renewable contract. So forget Alpa.
Any reg jet you can sell in asia for 105 to 115% of value. So they would not loose any money in breaking the aircraft leases.
The question is how difficult it would be to purchase a regonal airline, disassemle it and retire it.

 

[General Lee]

I just don't think many US pilots would agree to that, and there might be a revolt. Those Ausies might be different there, because we all know they just love to surf, eat shrimp on the barbie, and receive Australian kisses---which are French kisses---but down under.

Bye Bye--General Lee

 

[tiktak]

look at the fist post I compiled and edited it.
Richard is a tight guy.
I think it will happen and the light on the end of the tunnel is the freight train comming at us.
I work in Asia, low pay, lots of time off, great commuting benefits.

 

[General Lee]

Tiktak,

Ok, great? What? There is too much competition here for Virgin. There are too many LCC's--like in Europe, where Virgin Express has NOT done that well---they are a small time player in the LCC arena---and the only reason they might be doing ok in Belgium is because Sabena tanked, and all they compete against now is SN Brussels Airlines--which goes for the business pax.

Bye Bye--General Lee

 

[46Driver]

Buying a regional for slots? Didn't United do that to West Air and then dump them?

 

[Heavy Set]

Tiktak,

We appreciate your enthusiasm and interest. However, the US market is a lot more competitive than the Australian market. Branson will have immediate competition that will not promote huge margins. Attempting to compete with Southwest, JetBlue, Song or AirTran will yield low margins. Tell me what Virgin America could do to differentiate itself? Nude flight attendants would be nice - but not likely. Hooters Air is already doing that.

How would Virgin differentiate itself? I'd like to hear your thoughts. Either it does something entirely unique (like JetBlue with its TV entertainment and low fares) or it buys an existing carrier - but we know Branson doesn't like to do that and would rather start from nothing.

Australia was a good target market becuase Qantas was the only game in town as Ansett sank - the U.S. market is full of LCCs - a different ball game...

Cheers

 

[tiktak]

Hi General Lee
To copy an exsisting buisiness model would be for a recepie for failure.
In the Atlantic area he has Virgin Atlantic. In the Pacific it is Singapore Airlines.
I do not know, but it could be a feeder for those long haul carriers.
In Hong Kong he is involved with dragon air.
Any thought on that.

 

[schafjet]

General Lee,

I keep seeing you refer to a LCC. Question for you, what is an LCC? I worked for Sun Country and you refered to them in a previous post as a LCC. I am under the impression SCA is a LLC which stands for Limited Liabililty Corp (or something close to that). I am just wondering if we are talking about the same thing and how does it make these companies more competitive? I thought it just made the big shots less vulnerable(sp) if the company was to go bankrupt(can't go after personal assets). Just wondering. Thanks.

 

[airgator]

LCC= low cost carrier

 

[schafjet]

Thanks guys, that clears it up. I guess we are talking about two different things.

 

[General Lee]

Tiktak,

I can see what you mean, but a feed for Virgin Atlantic wouldn't really make sense since Virgin has less than 10 flights a day to the United States from London. I didn't know that Branson had an interest in Dragon Air----I thought the Swire Group had a majority interest, with the Gov't of China owning the rest.... I think the Virgin brand name is a good name, but the Low Cost Carrier competition in the United States---probably more intense than any other country or continent---might be too much for a new entrant. Sure, he could buy a regional airline and get some slots, but I don't know how it would work out. I guess we will just have to watch and see.

Bye Bye--General Lee

 

[center]

Dragonair is majority owned by CNAC, and CITIC Pacific. Both are Red Chip companies. ie-Chinese Government. Swire Pacifc has a small ownership, with Cathay owning another small share. (Even though Swire has a ownership in Cathay, both companies own minority stakes in KA (Dragonair)

Cathay is also majority owned by mainland Chinese companies, with Swire maintaining a so called management roll, with a 46% shareholding.

Cheers,