Virgin must make changes to retain U.S. citizenship

[redflyer65]

Well said FirstThird. It's the same reason SWA is in Dulles. To have a presence there and to compete head to head instead of having a low cost carrier come in to compete against the other distant SWA hub (ie, BWI or OAK)

Just my opinion, but I think VA operates on only one premise..

That Branson has a foothold in the US for what he hopes is a complete Open Skies agreement. Once that's gone, he will combine the UK, Australian and US components into one. He doesn't mind losing money for the final goal. Then he can use whatever nationality of pilots that will be the cheapest.

 

[jayme]

It isn't depressing yields if you make money and pay a good wage.

No, it's depressing the yield if the yield is depressed. Period.

 

[firstthird]

No, it's depressing the yield if the yield is depressed. Period.

You are right about that. I overstated my case. It isn't depressing OUR yield. If someone else has a higher cost structure or more overhead to cover, then a price point that makes SWA money may very well lose that other airline money.

Admittedly, the cost advantage for SWA has decreased a bunch recently. I'm hoping that the airlines that lost their pensions and saw work rules gutted during the recent spate of bankruptcies can start to get some decent contracts again, for all of our sakes.

 

[jonjuan]

You are right about that. I overstated my case. It isn't depressing OUR yield. If someone else has a higher cost structure or more overhead to cover, then a price point that makes SWA money may very well lose that other airline money.

Huh? It is depressing YOUR yield. You may still be making money, but not as much if there was no competition. It affects your profitability and in turn how much your company shares with you at the end of the year.

 

[firstthird]

Jonjuan,

I was replying to Jayme who said "No, it's depressing the yield if the yield is depressed. Period." the debate is whether or not VA is depressing yields on the west coast. I say they are. a VA supported argued that SWA also depresses yields. I countered that we aren't depressing our yields, since we're still making money. but I overstated.

the whole argument is sort of silly and I'm sorry for getting into it. the fact remains that SWA returned to SFO for a reason, and I doubt that reason was that we missed the delays or needed more of a bay area presence (with OAK and SJC already). it was because VA was starting.

I guess we'll see in the end how it all works out. Branson has deep pockets but he is also notorious for being an unsympathetic boss when it comes to losing money. he makes the hard decision and gets out if necessary (virgin nigeria anyone?). it is tough times all around for the industry, no arguing that.

 

[redflyer65]

He'll wait until the Open Skies are "Open".