Borghetti blames 'uncertainty and conservatism' for sluggish trading

[Melburnian1]

I like JB of VA, because it must be very difficult competing against a behemoth in QF. It's also good in the attached that he's announcing VA flights to HKG although no exact date is available.

Even though QF keeps devaluing its frequent flyer scheme and redemption can be extremely difficult depending on the route and class, many locals are 'wedded' to it.

However, in blaming 'uncertainty and conservatism' among local travellers for sluggish trading in the attached (see below), JB is on the wrong tram.

Given household debt levels among up to 50 per cent of Australians, it is rational that many are not travelling much - or at all - for leisure. These Australians cannot afford to, and if any are, it's at the cost of even higher taking on of personal debt.

While unusual, passenger numbers on the important MEL - SYD - MEL sectors (for all airlines combined) dropped 0.3 per cent in the month of December 2016 according to BITRE.

Annual passenger growth among all the domestic airlines appears to be declining. In the month of December, it was 1.7 per cent, basically matching population growth, and yet we hear QF boss AJ boasting that there has been a huge rise in mainland Chinese travellers coming to Australia and taking two to three flights each. So there is some decline among local travellers, and it's not all due to the Queensland and WA resources slowdown.

'The Australian' article is headed (I cannot attach a link as the paywall defeats that):[h=1]Virgin Australia lands in Asia with Hong Kong flights[/h]

There is of course an existing thread on the HKG flights issue:

http://www.australianfrequentflyer....lia-velocity/va-hkg-mid-2017-where-76561.html

Isochronous sure was on the money when he predicted 'MEL' by the sound of things in the latest article.

 

[yohy?!]

you're right in highlighting the the symptoms of the "uncertainty and conservatism" in terms of household debt and the flow-through to travel from a squeeze on disposable incomes.

there's a few more factors i think that come in to play also, namely:

-complete failure from government to pursue bipartisan reforms (vis falling wages and living standards, rocketing public debt)
-prioritisation of property investment over investment in start-up businesses to drive employment and trade (vis asset bubbles, mammoth household debt, rising part time employment)

it doesn't look like great conditions for any airline to operate in who will facing rising costs and competition amidst a falling amount of dollars available for spend on leisure travel (hence why JB is so keen to defend and grow the business spend on VA).

 

[Melburnian1]

yohi?!, I agree with what you suggest. Is another factor in 'sluggish demand' how VA lacks (but with its part mainland Chinese ownership is trying to slowly rectify) much of an 'own metal' VAi network - and hence given the perceived uncompetitiveness of holidays within Australia for locals compared with that jaunt to southeast Asia (Bali, Thailand, Philippines) or even north Asia (Japan), VA is at a disadvantage compared to foreign airlines or QF?

 

[Dannyism]

This article by ABC is pretty good. Skip past the santos, VA at the bottom.

Santos narrows loss to $1.4b, Virgin dives into the red - Business - ABC News (Australian Broadcasting Corporation)

 

[Bagpuss]

This article by ABC is pretty good. Skip past the santos, VA at the bottom.

Santos narrows loss to $1.4b, Virgin dives into the red - Business - ABC News (Australian Broadcasting Corporation)

I really get bored of hearing "game changer" not just limited to coming from VA.

 

[grubbidok]

If they're concerned about revenue you'd think they'd at least try to make it possible to book a flight with them.

Most of my bookings with VA tend to be in spite of their booking system, not because of it. And I often travel with their partners on their codes more than VA if there is a connecting flight (even if there is a VA codeshare) because it is almost impossible to book anything but the most basic of overseas itineraries on their website or without spending considerable time on the phone with them (I'm all for returning to 80s/90s level service - but keep it in flight not at the booking stage!!).

 

[Melburnian1]

If they're concerned about revenue you'd think they'd at least try to make it possible to book a flight with them.

Most of my bookings with VA tend to be in spite of their booking system, not because of it...

grubbidok, while it's the subject of a separate thread so I will only go briefly off track, VA's Velocity Rewards website is also poor with some major destinations like Manila not even featuring in the dropdown selection menu. While reward availability appears to be better than for QF, one has to spend quite some time on the phone to VA call centre staff including sometimes that annoying procedure where one briefly explains what one wants and is then inexplicably transferred to another section.

You really do wonder at VA's priorities: it's competing with a giant in Australia, and many overseas airlines for its far more limited VFi own metal offerings, so a passenger friendly booking and FF redemption online presence should be in its top five goals.