Virgin USA - 100 Airbus A/C

[General Lee]

B6busdriver,

Well, if USAir does tank--that would also give the LCCs extra aircraft NOW to expand if they chose. As far as bringing aircraft out of the desert for DL---the only flyable ones we still have are the 11 MD-11s---the 727s and L1011s are too old and need major maintenence. If USAir does drop---which would be unfortunate for all of their pilots etc----I wonder who would take up the slack at each hub? SW would go for PHL---but what about CLT and PIT? Mesa might go for PIT, and maybe ATA at CLT. I don't know--but it will be interesting.......Good luck to all.

Bye Bye--General Lee

 

[ThomasMore]

The Virgin menace

A few thoughts on Branson.

Virgin Atlantic is pretty successful against British Airways, and Virgin Blue only has one other competitor to speak of, Qantas. Both compete very well against high-cost legacy carriers in their markets.

Virgin Sun is defunct, and Virgin Express's performance is at best mediocre, in a European market where there is lots of competition and several other low-cost carriers are in the fray.

On that 50% track record, and considering Virgin US (or Virgin Red, or whatever it will be called) will compete in a US market which has even more cutthroat competition and more LCCs than Europe, I see no guarantee that it will be a big success (nor do I count it out).

Unlike Kelleher at Southwest or Neeleman (sp?) at jetBlue, Branson is not a hands-on manager. He hands off day-to-day management to others, and checks in from time to time. Branson's forte is brand-building and marketing. He is highly visible and gives his products a definite character. But that doesn't mean that the bottom line is always a success (ref. Virgin Sun, Virgin Express).

As for cabotage, it depends what the business relationship between the US company and the others is. United helped found the Star Alliance, which allowed cross-border marketing and ticketing a long time ago. I didn't hear many complaints about cabotage then. Similarly, Northwest and KLM have (or at least, had) cross-ownership internationally. Based on that background, an airline which carries a foreign brand identity but is mostly US-owned does not strike me as all that bizarre or threatening in principle.

Finally, a new competitor is usually bad news for incumbents, at least in the short term. It usually is NOT bad for the health of the industry as a whole. But if you are employed by a competitor that doesn't know how to compete, it could be very bad for you.

Due to the nature of our jobs and the seniority method of advancement, we crave stability in what is without question a highly unstable industry.

 

[320AV8R]

A merger or aquisition among the Majors is highly unlikely; hence, the (NWA, CAL, DAL) Codeshare. The majors have their hands full servicing their present debt loads, & the Finnancial Markets would turn down any requests for increased debt.

The LCCs, on the other hand, have low debt & access to increased finnancing. The likelihood of them combining is more plausable. A JetBlue / Frontier matchup would be very feasable.
Or SWA & Alaska; AWA & Alaska, etc...............

The major moving pieces in the equation are USAir, Independence Air & Virgin USA. These three will make things interesting.

 

[skippy767]

UM who are his partners?????

last time I checked you need to be a US citizen to receive approval to run an airline here in the US. So that means he could only owe 49% of Virgin USA. So who are his partners that are going to invest 51%???????

 

[B6Busdriver]

I think the max foreign ownership is 25%. Anyone?

 

[limodriver1]

it is 49%

it is 49 %

 

[SDF2BUF2MCO]

That 25% may be a good number. However, with the DHL/ABX/"Astar" gig, it looks like there is potential wiggle room to "relax" foreign ownership definitions. Globalization may be good for worldly businesses but it will be the common man who eventually pays the price.

 

[zonker]

Re: it is 49%

it is 49 %

It's 25%.

Here's an editorial from todays WSJ:



Jurassic Flight

By LOYOLA DE PALACIO
May 10, 2004; Page A16

The next few days are critical for the fate of the world's largest aviation merger ever: the creation of a fully fledged trans-Atlantic aviation marketplace. As the United States and the European Union reach make-or-break point in our year-long "Open Aviation Agreement" negotiations in Washington this week, it's time to set out exactly what is at stake.

The EU has been pushing for trans-Atlantic aviation to be treated like any other international industry for years. Removing the raft of trans-Atlantic restrictions that hinder healthy competition between, and international investment in, our airlines would breathe much-needed life into an ailing but essential sector of our economies.

At a time when this industry is still feeling the 9/11 fallout through higher costs, heavy security burdens and the inevitable fall-off in passenger numbers, the need for an ambitious trans-Atlantic deal has never been greater. Benefits could include 11 million extra passengers traveling on airlines each year. Consumers stand to benefit to the tune of an annual $5 billion; and 16,000 new jobs could be created with a yearly $8 billion going to related industries. The tourism and leisure sectors could do with this boost, too.

Top of our hit-list in these negotiations are the "Jurassic" restrictions on air services that fly in the face of consumer demand. Today, only four British and American airlines can fly to and from the U.S. to London's Heathrow Airport, the EU's most valuable gateway. U.S. negotiators' zest for prizing open this and other restricted markets is understandably strong. But the zest disappears when it comes to delivering on their side of the bargain by opening up the U.S. domestic market to foreign airlines. While a U.S. airline can carry passengers and cargo from any major EU capital to another, this right is denied to EU carriers between major cities in the U.S. "That's off limits," we are told.

I don't get this attitude. What is the U.S. afraid of? The time has surely come to do away with the sclerotic trappings of a bygone protectionist age and unleash the full potential of this most globalized and globalizing of industries. Let's let airlines fly where they want, when they want.

It's been over a decade since we successfully removed all barriers within the EU, bringing healthy competition between airlines and creating a vibrant passenger market for consumers. Today, U.S. cargo planes flown by U.S. pilots working under U.S. rules, operate freely within the EU. Our pilots and airlines are understandably unhappy that our generosity is not reciprocated by the U.S. By its dogmatic refusal to consider opening its market, the U.S. is shooting itself in the foot, denying its own consumers a freedom of choice and passing up the opportunity to create much needed new jobs. It is time the U.S. thought again.

Foreign investment is the key to the future health of the trans-Atlantic airline industry. Until now, any EU company seeking to invest in the U.S. domestic air-transport market, to create American jobs and offer American consumers choice, has hit a brick wall. U.S. law precludes them from holding any more than 25% of a U.S. airline. Richard Branson, an entrepreneur much admired stateside -- and who is planning to invest in the U.S. airline market -- is being pilloried for having the temerity to threaten the future of inefficient companies by injecting some good ol' American competition into the mix!

The U.S. position on investment is untenable. It's just plain protectionism to continue blocking such investment and denying the jobs that would result. It is indefensible to protect the inefficient companies Congressman John Mica rightly branded "dinosaurs," at the expense of U.S. consumers and taxpayers. Lifting all investment restrictions will allow the lifeblood of globalized airlines to flow freely. Leaving them in place will only lead to even more heartache.

I urge America to join us and aim high to build a common Trans-Atlantic Aviation Area bridging people on both sides of the "pond." There is still time to strike the deal we need. If we succeed, we will both gain. If we fail, we will allow to slip through our fingers a golden opportunity to set the ailing airline industry on the right flight-path for the future. Time is running out. Preserving Jurassic Flight is not an option.

Ms. Palacio is the EU's transportation commissioner.

 

[b757driver]

25% or 49%??

It can be confusing - even among media reports. having followed this story for over a year and having in my possession many of the reports, it seems like it's49% of the equity and 25% of the voting rights. There is a difference.

Also of note, Branson has repeatedly said (both on and off the record) that he would prefer to "start from scratch, backed by deep-pocketed U.S. investors" in addition to his own money. He is not interested in inheriting someone else's debt and other baggage. If he is to succeed, it will require some pretty savvy business strategies and some innovative marketing. He is the expert in that field. The interest is clearly out there and he can afford to do this. The big question is whether it will succeed long-term.

Either way, Branson is going to put the cat among the pigeons or be the dog with his tail between his legs. One thing we are all agreed on, is that it will be interesting times ahead.

 

[storminpilot]

http://icnorthwales.icnetwork.co.uk...us-aiming-to-fly-high-in-japan-name_page.html

Airbus aiming to fly high in Japan May 12 2004




By David Jones Daily Post


AIRBUS is aiming to triple its Japanese market share after its top salesman admitted the company had failed to keep pace with front-running rival Boeing.

The European aircraft manufacturer has been jolted into beefing up its sales push after All Nippon Airways placed a big order with its American competitor last month.

Its 15% slice of the market in Japan contrasts sharply with the situation in China where its has about 50% of sales and the USA where it has 45%.

Chief commercial officer John Leahy said that the ANA order for 50 Boeing jets underscored the problem Airbus faced in Japan where long-established ties to Boeing and close US-Japan business links generally had proved difficult to break.

"They bought those planes without looking at us. They didn't even ask for a brochure," said Mr Leahy. "We didn't spend enough time there early enough and that was maybe wrong.

"I believe that over the next two or three years we can get the Japan market share up to the level it is in the US."

He said Airbus had faced a similar challenge in China a decade ago but had made deep inroads after making a point of visiting the airlines there every week.

Airbus' continued success in winning share in the low-cost airline market in the West was underlined yesterday when American carrier Spirit Airlines became the latest to sign a firm order.

Florida-based Spirit is buying 15 jets from the Airbus A320 Family and is taking up to 50 options. It will help secure employment at Airbus' Broughton aerospace complex where a workforce more than 6,000-strong build the wings for all Airbus jets.

A new customer for Airbus, the low-cost operator will buy 11 A319s and four A321s and will lease four A321s.

It has already announced it will lease 20 Airbus aircraft from American company International Lease Finance Corporation.

Airbus said the order - worth potentially more than £2bn - could grow to 65 purchased aircraft and 24 leased.

Richard Branson's Virgin Group is believed to be on the point of placing a massive order with Airbus for a new low-cost US airline due to launch next year.

 

[jws717]

Ok now to the real question;
Will Virgin USA hire super hot flight attendants, like Virgin atlantic?
And will mandatory retirement for all FAs be 30?

All joking aside, most of Bransons products are alot of hype and not much quality, the cell phone plans are a rip off, after converting cost of living 747 pilots make CRJ pay. Seems like alot of customers and employees, fall for the hype and make Branson rich.

 

[b757driver]

jws717

In answer to some of your questions, the FAs will most likely have a similar uniform. Don't be surprised to see red as a color. Also, check out the uniform his Australian LCC, Virgin Blue has.

Yes, there is a lot of hype and that's a part of the overall package - similar to the hype SWA generates. As for value for money, well, as someone who has commuted many times on VS across the pond, I am in a position to say that they DO deliver a quality product. Keep in mind several decades ago they took on the might of BA in the British High Court and won a landslide victory. They have are very innovative and were the first to bring out seatback TV screens for long-haul flights and serving ice cream, not just in first class, but also economy.

Yes, not all of his companies have been successful. You left one out - Virgin trains. But compared to the over 150 companies he has a holding in, that's not a bad percentage. Even Warren Buffet, the investment guru has made bad choices in the past which he openly admits. It's part of doing business, no one's perfect and you have to accept the downside as well as the upside.

Finally, most of the employees I have come across seem reasonably happy - at least the flight attendants smile !!!
Also, I believe their staff turnover, including, pilots is pretty low. You don't see VS pilots interviewing for BA jobs, but you do find retired BA Captains on VS flight decks.

Hope that puts things into perspective for some.