Virgin America Info?

[Tomct]

IMO, Virgin, in its present form, will NOT make it.

Why?

1) No air carrier in history has been successful over the long term by making its labor force bear the costs of the operation. READ: Extremely low pay helps propel the airline to the next level but eventually that poor treatment of employees in a service industry translates to the frontlines and the product suffers.

2) You can't make money in this high oil environment by charging $88 a seat out of SFO. It simply can't be done. Eventually Branson's investors, along with the emloyees, will stop subsidizing people's air travel and stop supporting management's rather uncreative business plan. Reference JBlu... they cannot make money as an airline because their business model is built on cheap fares. You can't continue to lose money forever. In a capitalist society, profit always prevails over all else. Creative destruction results in weaker businesses and industries failing which supports the stronger more innovative models.

3) The training and recruitment costs for any airline are enormous. $30-$50,000 per pilot depending on the carrier. If you create an environment where professional aviators use your company as a revolving door (read: training center) the constant turnover will cost you millions on an annual basis. By this I mean pilots join VA to get the 320 type and flt time then move on when a better opportunity comes along. If you don't pay enough for the retention of your most skilled labor group, it is going to be financially painful in the long run. Couple this with the added dynamic that low-fare/ start-up carriers pay higher salaries to new-hires than the legacy carriers, and one could make the argument that indeed recruitment and training are higher-than-average costs for the start-ups.

All that said, shouldn't this thread be on the LCC boards?

Kind of sounds like the argument of why Southwest's Business model will NEVER WORK! Analysts like yourself lose site of the big picture!
1) Branson has been waiting years too get into the American market. He will do and spend whatever it takes to keep the airline going. Don't forget that it is his 3rd airline...all of which are doing very well.
2) He has the LARGEST WAR CHEST of any airline EVER started!
3) The pilot cost is nearly ZERO due to the fact that he is getting the training from Airbus FOR FREE!!!
4) His bigger picture is too change the face of domestic airtravel...using the JetBlue model and amping it up another notch.
5) Don't forget about Virgin Galactic. That is right, the space travel is just the tip of the iceberg.
Virgin America is going to force every airline in the US to UP THE ANTEE with their domestic product or fall by the way-side! Only time will tell, but judging from his other ventures I dare say he will have continued success in the Airline business.

 

[skiandsurf]

2) He has the LARGEST WAR CHEST of any airline EVER started!

But remember, its NOT Bransons airline or money. Yeah right.

 

[Tomct]

Fairly certain it was around $90-95 an hour, I applied when they first started advertising on the internet in Jan/Feb of 2000 for pilots and vaguely remember that number.

Adjusted for inflation, $90 an hour in 2000 would be $114 an hour today, 1st year pay.

Once things get going over there, you can bet that the money will follow. When SWA started they were not the Highest Paid...Now they are, but not before they had massive growth. Plus if you look and the 5 and 6 year timeframe, they are not far off from all of the other carriers that fly the same equipement!

NW 130 131
UA 124 125
AWA 127 129
US 116 117
F9 133 136
B6 121 127
Spirit 127 129 (A321 rates)
USA 3000 120 122
VIRGIN 115 120
Not too far off.

 

[Tomct]

But remember, its NOT Bransons airline or money. Yeah right.

I know and I am with you...yet it IS! Branson has always said that one of his biggest mistakes that he made in the business world was not being part of JetBlue. Who knows...in the long run that could end up being a merger.

 

[Lear70]

Once things get going over there, you can bet that the money will follow. When SWA started they were not the Highest Paid...Now they are, but not before they had massive growth. Plus if you look and the 5 and 6 year timeframe, they are not far off from all of the other carriers that fly the same equipement!

NW 130 131
UA 124 125
AWA 127 129
US 116 117
F9 133 136
B6 121 127
Spirit 127 129 (A321 rates)
USA 3000 120 122
VIRGIN 115 120
Not too far off.

Ummm... not sure where you're getting your numbers. 1st year Virgin CA pay is $95 an hour, goes up $5 per year to year 6 max.

As far as not being "too far off", it's *only* by 20%, or around $20,000 per year ($24.75 less than the industry average times 900 hours of flying per year on a 75-77 hour monthly credit average which is WAY low).

Or, about the amount of your mortgage. Depends on how you look at it.

/sarcasm

 

[BigMeat]

5) Don't forget about Virgin Galactic. That is right, the space travel is just the tip of the iceberg.

Is that what Branson is telling you. Is he promising you guys the stars? Hey future Galactic traveler have some respect for yourself and and wait for a respectable airline to hire you other than Virgin and Skybus. You want to ride a rocket ship visit a porn shop. This is a real profession that we are trying to up hold and return to at least a glimmer of what it used to be.....

 

[FIREMAN]

Is that what Branson is telling you. Is he promising you guys the stars? Hey future Galactic traveler have some respect for yourself and and wait for a respectable airline to hire you other than Virgin and Skybus. You want to ride a rocket ship visit a porn shop. This is a real profession that we are trying to up hold and return to at least a glimmer of what it used to be.....

This from a King Air driver!

 

[Tomct]

Is that what Branson is telling you. Is he promising you guys the stars? Hey future Galactic traveler have some respect for yourself and and wait for a respectable airline to hire you other than Virgin and Skybus. You want to ride a rocket ship visit a porn shop. This is a real profession that we are trying to up hold and return to at least a glimmer of what it used to be.....

Glimmer...are you on CRACK? Have you witnessed the amount of service lately here in the US? Obviously not! Here is an example....(hi, have a crappy snack pack full of SH!T or better yet...NOTHING for the next 4-6 hour flight.) Yeah...we are bringing it back to a glimmer alright. Not to mention that the ole hag handing you the food is already receiving Social Security. Nice try...go back to flying your little King air!

 

[Tomct]

Ummm... not sure where you're getting your numbers. 1st year Virgin CA pay is $95 an hour, goes up $5 per year to year 6 max.

As far as not being "too far off", it's *only* by 20%, or around $20,000 per year ($24.75 less than the industry average times 900 hours of flying per year on a 75-77 hour monthly credit average which is WAY low).

Or, about the amount of your mortgage. Depends on how you look at it.

/sarcasm

The numbers are from APC. Notice that I said the 5-6 year time frame. I agree that first year pay blows, but for a start-up...what do you expect. They make as much or more than US, Spirit. Again, that is 5-6 year pay. The highest paid (Frontier) is losing money.

 

[JJET44]

Not that it matters much, but it's John Ornstein.
Either way he's a POS!!!