New business class for VA 737 [deferred]

[Boof1]

If it reverts back to a recliner, I'll actively seek out the QF A330 options.

You (and many others, please don't think I'm pointing the finger directly here) assume that QF will keep the A330's on the east-west flights but we already know that the widebody transcon flying is reducing. QF are putting the A330's on the SYD-AKL route twice daily as a result of the EK A380 being removed. That removes 2 Perth rotations from the network. The next asian destination they launch, whenever that may be, will take out 2.5 transcon rotations per day. As markets shift so will QF's use of the A330's.

It could end up being that all of the QF transcon services are either 737 or the 787 int'l tag flights such as QF9 and unless there is a mass exodus of QF flyers to Europe the 787's could be a challenge to get seats on.

as Virgin already has lie-flat on east-west A330s, and Qantas has the same – and with a much larger fleer of domestic A330s – would it be considered a backwards step if Virgin went for a luxe 'regional business class' recliner, even something rather 'Minty' in finish? I suspect most of the market would see it that way, and I suspect that it'd play right into Qantas' hands.

It's only a backwards step if they change the seat and nothing else. VA need to redefine the product offering across the board for domestic J, not just transcon, and this could be the chance to do it properly on all the 737 services and shift all the A330 flying internationally. The A330 product is great, the 737 not so much. Here is a chance to get some balance.

And there's your case in point David. We humans don't like nice things being taken away from us.
A precarious conundrum for the Men in Grey Suits around the Shiny Table.

That depends on what it is being replaced with...

I also agree that the flat-bed seats are a bit of overkill on the transcon flights but a recliner like what VX have would be a big step backwards. An angled lie-flat seat in a 2x2 configuration is more than enough and having a subfleet of the 737s just servicing the transcons makes sense. Having them on flights less than 3 hours would be absolutely ridiculous!

VA can't afford a subfleet. To do so would be driving further costs into the business that they cannot afford right now. Jetblue had this exact issue with Mint and hence the expansion. Sure Robin Hayes (B6's CEO) says that he wishes they had more Mint seats in the A321's and that they are expanding it due to the success but it is also about expanding the reach of the product to lower the overall operating costs of the subfleet. As the Mint fleet gets bigger the costs drop.

Unless VA want to roll this out to the Tasman fleet, and to NAN as they do with the A330's on weekends, they will be stuck with a small fleet in a fluctuating market. Why else would QF have reconfigured all of the A330's? You don't need a lie-flat between SYD-MEL but they have them as they need the whole seat count on the route.

Just remember where QF were heading before VA introduced their Coast to Coast service.

I think that without a doubt, domestically QF would be still on 2-2-2 38" pitch for the foreseeable future if not for VA's introduction of the ex EK and later 332's being 2-2-2; Qantas upped the ante with 1-2-1 which VA matched.

Spot on. VA didn't need to do the 1-2-1 domestically and clearly this was a move to get the A330's configured for intl routes same as QF did.

 

[Pleb Status]

VA can't afford a subfleet. To do so would be driving further costs into the business that they cannot afford right now. Jetblue had this exact issue with Mint and hence the expansion. Sure Robin Hayes (B6's CEO) says that he wishes they had more Mint seats in the A321's and that they are expanding it due to the success but it is also about expanding the reach of the product to lower the overall operating costs of the subfleet. As the Mint fleet gets bigger the costs drop.

Unless VA want to roll this out to the Tasman fleet, and to NAN as they do with the A330's on weekends, they will be stuck with a small fleet in a fluctuating market. Why else would QF have reconfigured all of the A330's? You don't need a lie-flat between SYD-MEL but they have them as they need the whole seat count on the route.

As the ongoing aircraft, crew, maintenance, fuel, airport (and almost every other) costs will be exactly the same between the 73H 'sub fleet' with the new J seats and the 73H without the new J seats, my (uninformed) opinion would be that the additional operating costs of the 'sub fleet' would be very minimal (or even measurable to any level of accuracy).

 

[clipped_wings]

Re: Easy fix for VA - new 737 J class!

Disagree with any day, any flight bit. For 3-5 hrs (which is the context of this thread, obviously) yes I agree. For a 12 hour overnight flight not so much.

Sorry, I was referring to domestic options. Long Haul is a whole 'nutha Oprah.

 

[Boof1]

As the ongoing aircraft, crew, maintenance, fuel, airport (and almost every other) costs will be exactly the same between the 73H 'sub fleet' with the new J seats and the 73H without the new J seats, my (uninformed) opinion would be that the additional operating costs of the 'sub fleet' would be very minimal (or even measurable to any level of accuracy).

Direct operating costs of the specific aircraft against others will be near the same, it's the fixed and variable costs to the business that will increase by having a sub-fleet. Lie Flat's won't fit in the current J class area on a 737 so less Y seats mean the CASM will rise for the sub fleet and overall slightly. In addition things like scheduling, maintenance, inventory, inflexibility to use as a substitute or if they are used the displacement costs of the Y pax that are shifted, are all impacted when a small fleet is introduced.

Remember we aren't talking about an Airbus narrow body fleet where wide body seats will fit, this is the benefit that AA has with the A321T's as these seats are used in other aircraft. AA also has 17 aircraft in the A321T config which is a sizeable fleet in itself.

 

[Pleb Status]

Direct operating costs of the specific aircraft against others will be near the same, it's the fixed and variable costs to the business that will increase by having a sub-fleet. Lie Flat's won't fit in the current J class area on a 737 so less Y seats mean the CASM will rise for the sub fleet and overall slightly. In addition things like scheduling, maintenance, inventory, inflexibility to use as a substitute or if they are used the displacement costs of the Y pax that are shifted, are all impacted when a small fleet is introduced.

Remember we aren't talking about an Airbus narrow body fleet where wide body seats will fit, this is the benefit that AA has with the A321T's as these seats are used in other aircraft. AA also has 17 aircraft in the A321T config which is a sizeable fleet in itself.

You agree that the difference in overall operating cost (not on a CASM basis) is very minimal, so how is this not 'affordable' to VA?

The 'sub fleet' should be at least 15 aircraft to cover all existing PER-East Coast services as 1.56 73H will be required to replace each 332.

 

[suze2000]

Re: Easy fix for VA - new 737 J class!

We humans don't like nice things being taken away from us.

The ridiculous thing is that that my biggest concern while reading this thread is that the A330s are going from transcon on VA. Which is OT I know, but the vast majority of travellers can not afford and do not fly J.

I like J as much as the next person, but it's almost always Y for me, and 737 Y on VA is not going to cut it when I can get A330 Y on QF. And if enough of us catch on to that, VA's transcon 737 will not be viable no matter what seats are in J.

Also for me, I would definitely accept (not quite prefer) a cradle seat with good padding, elevated knees, and recline for sleeping than what passes for a flat bed on most airlines. They are flat, sure. But I tried a few last year and found them hard and unyeilding, with mechanisms that are pretty much exposed sticking into your hip or elbows or back.

 

[Justchecking]

Re: Easy fix for VA - new 737 J class!

The ridiculous thing is that that my biggest concern while reading this thread is that the A330s are going from transcon on VA. ....and 737 Y on VA is not going to cut it when I can get A330 Y on QF. And if enough of us catch on to that, VA's transcon 737 will not be viable no matter what seats are in J.

This is true. The big losers here are actually the Y pax. Y on a dual aisle is vastly more comfortable than a single aisle for long flights. More stretching space and toilets make all the difference. Also entertainment system makes the flight pass more easily not to mention the bonus if you happen to be in the middle row of 4 with only one other seat mate or none others. Ah......a comfy bed.

Maybe the real reason for the aircraft downgrade is to make people buy XY....

 

[ozstamps]

Better use up some platinum upgrade fast. SYD-PER is the only savvy use of them. (Although did I read you could use them to Fiji on weekend A330 flights?)

Any educated guesses as to when the 737 refits will start to appear on transcon?

 

[ozstamps]

Re: Easy fix for VA - new 737 J class!

.... what passes for a flat bed on most airlines. They are flat, sure. But I tried a few last year and found them hard and unyeilding, with mechanisms that are pretty much exposed sticking into your hip or elbows or back.

Clearly you have never flown in "The Business". The last version makeover was very nice. Flew it this month and food and seat were better than many foreign long haul carriers. No idea what you are referring to.

WA is screwed economically and has been for a few years.

VA rolled out the widebodies almost as the Carnival Was Over. Unfortunate timing. Trying to fill them up with $149 Happy Hour passengers makes no money. BNE-PER was insane.

 

[Boof1]

You agree that the difference in overall operating cost (not on a CASM basis) is very minimal, so how is this not 'affordable' to VA?

The 'sub fleet' should be at least 15 aircraft to cover all existing PER-East Coast services as 1.56 73H will be required to replace each 332.

No, I agree that the operating cost of the aircraft will not change. It makes no difference if you have 1 or 180 seats in a 737, with a standard set of crew (2 tech, 4 cabin) the actual $$$ to fly from point A to point B will be the same.

The problem here is that VA can't afford to lift their costs anymore than they already have and a lift in CASM is a problem as they cannot charge more to compensate. Let's be honest, they aren't rolling in cash at a time when the competitor is. It's for that reason they cannot afford to run a sub fleet of 737's just for the transcon services, but worse still they really don't have the cash to actually set this up and do it properly. If this was for all 737's and the net effect was zero on the CASM then I'd be all for it but it won't be that. It will add layers of complexity to the business that will increase costs. VA just can't have either of these occur.

Out of curiosity how do you arrive at 15 in the sub fleet? Given 14 services each way each day from SYD/MEL/BNE they would need about 9 to cover this amount of flying. A straight 1.56 x 6 A330's is 10 as you can't have .36 of 737, and the A330's currently aren't used to the full capacity on transcon flights and haven't been for as long as they have had them as they are either parked for a large chunk time at great expense especially over the weekends, or have been used elsewhere such as weekend services to NAN.

 

[suze2000]

Re: Easy fix for VA - new 737 J class!

Clearly you have never flown in "The Business".

Yes I have - it is excellent - far superior to QF's offering.

 

[serfty]

Re: Easy fix for VA - new 737 J class!

...
I like J as much as the next person, but it's almost always Y for me, and 737 Y on VA is not going to cut it when I can get A330 Y on QF. And if enough of us catch on to that, VA's transcon 737 will not be viable no matter what seats are in J.
...

As posted up thread, don't think for one second that Qantas won't start pulling their 330's off coast to coast as soon as VA do.

 

[Pleb Status]

The problem here is that VA can't afford to lift their costs anymore than they already have and a lift in CASM is a problem as they cannot charge more to compensate. Let's be honest, they aren't rolling in cash at a time when the competitor is. It's for that reason they cannot afford to run a sub fleet of 737's just for the transcon services, but worse still they really don't have the cash to actually set this up and do it properly. If this was for all 737's and the net effect was zero on the CASM then I'd be all for it but it won't be that. It will add layers of complexity to the business that will increase costs. VA just can't have either of these occur.

Out of curiosity how do you arrive at 15 in the sub fleet? Given 14 services each way each day from SYD/MEL/BNE they would need about 9 to cover this amount of flying. A straight 1.56 x 6 A330's is 10 as you can't have .36 of 737, and the A330's currently aren't used to the full capacity on transcon flights and haven't been for as long as they have had them as they are either parked for a large chunk time at great expense especially over the weekends, or have been used elsewhere such as weekend services to NAN.

Once again, the cost of operating the 73H fleet is effectively the same, sub fleet or not. So, as a whole, there is NO effective operating cost increase to consider if they were to proceed with this upgrade. The added 'complexity' of having a slightly different configured aircraft for a small number of your fleet is negligible at best and I would guess almost immeasurable. Even JQ (and other LCC) operate two (or more) aircraft types in their domestic fleet (320 and 321), so the additional cost cannot be very onerous.

On the revenue side, assuming a reduction of 6 Y seats (TBC) due to the J upgrade, there is NO reduction in revenue (not a single cent) unless every single one of the remaining Y seats is sold on a particular flight. In the current two airline market, if VA find that they are that successful on transcon services that they could sell those six seats on most of their flights, they most likely could raise fares to cover the lost revenue in that case.

My ball park estimate of 15 refurbished 73H is based on ten 73H to replace the six 332, say two 73H to replace the 73H that are concurrently used with the 332 on transcons (particularly PER-BNE v.v) and say three additional 73H to allow for maintenance, delays and overall scheduling requirements. The number of aircraft required needs to based on peak usage, even if that occurs rarely. Until recently, on Sunday nights for instance, all six 332 would be in the air at the same time according to FR24.

As an aside, one of the current AFF myths is that the domestic arm of VA is not making money and the A330 transcon services are 'bleeding' cash. The domestic arm has been making reasonable money for years and for FY16 made a profit of $162M. The VA group is losing money overall however due to interest on their debt and 'restructuring' costs.

 

[pauly7]

Re: Easy fix for VA - new 737 J class!

As posted up thread, don't think for one second that Qantas won't start pulling their 330's off coast to coast as soon as VA do.

Qantas will pull them off if/when they find a more profitable place for them. I think they'll probably pick up some business actually from VA exiting the wide bodies but will it be enough $ to keep their 330's ping ponging back and forth v other alternatives we shall all see in due course.

I do agree with the post a few back - won't someone please think of the Y pax! We have all been talking J, but now any personal Y travel trans con I won't be looking at any other airline apart from Qantas. Loath the 737/A320 on that route regardless of operator.

 

[Boof1]

Re: Easy fix for VA - new 737 J class!

Once again, the cost of operating the 73H fleet is effectively the same, sub fleet or not. So, as a whole, there is NO effective operating cost increase to consider if they were to proceed with this upgrade. The added 'complexity' of having a slightly different configured aircraft for a small number of your fleet is negligible at best and I would guess almost immeasurable.

If you remove seats that same operating cost is spread over less seats. When CASM lifts and RASM doesn’t margin is eroded. VA can’t lift prices to compensate, and will have less seats to sell. That is a problem.

Put it another way: It costs $70 to fill a tank of fuel in an average car. Just because you can afford to fill up a Range Rover doesn’t mean you can afford to buy one. VA can’t afford a second hand Barina with new seat covers at the moment.

Even JQ (and other LCC) operate two (or more) aircraft types in their domestic fleet (320 and 321), so the additional cost cannot be very onerous.

Adding the A321 lowered JQ’s CASM as the increased costs of fuel and the extra FA are more than offset by the 20%+ lift in capacity resulting in a net lower CASM. VA aren’t getting bigger 737’s (that we know of) to do this.

On the revenue side, assuming a reduction of 6 Y seats (TBC) due to the J upgrade, there is NO reduction in revenue (not a single cent) unless every single one of the remaining Y seats is sold on a particular flight. In the current two airline market, if VA find that they are that successful on transcon services that they could sell those six seats on most of their flights, they most likely could raise fares to cover the lost revenue in that case.

It can be spun anyway you like, the reality is if you have less seats to sell your revenue at some point will be impacted. The back of the bus is price sensitive, why else would JQ be in the market?

My ball park estimate of 15 refurbished 73H is based on ten 73H to replace the six 332, say two 73H to replace the 73H that are concurrently used with the 332 on transcons (particularly PER-BNE v.v) and say three additional 73H to allow for maintenance, delays and overall scheduling requirements. The number of aircraft required needs to based on peak usage, even if that occurs rarely. Until recently, on Sunday nights for instance, all six 332 would be in the air at the same time according to FR24.

Thanks for clarifying. I came to 10 as the 14 daily services will need about 9 aircraft to operate plus the additional peaks on the MEL-PER Mon & Fri services. Remember that all 6 A330’s haven’t been used exclusively on the transcon services and that often when a 737 is flying transcon an A330 is parked, hence why I don’t think 15 are needed.

As an aside, one of the current AFF myths is that the domestic arm of VA is not making money and the A330 transcon services are 'bleeding' cash. The domestic arm has been making reasonable money for years and for FY16 made a profit of $162M. The VA group is losing money overall however due to interest on their debt and 'restructuring' costs.

Totally agree with you that VA Dom is making money but VAH as a group is not and any erosion of profit from the Dom division through a lift in CASM will impact the whole group.

Let’s move this away from costs and revenue though as we both know that VA will do whatever they want, regardless of the cost.

VA need to look at the whole product position and as a few have commented the back of the bus needs a look at as well, hence why I suggested taking the HA approach which is a better level of comfort throughout the Y and Y Extra cabin, and a happy medium that fits the bill for almost all J class services. The beds really aren’t needed and if VA can nail the brief they may be able to win a few customers through having some great products pre, during, and post flight in both J and Y.

 

[DavidFlynn]

Re: Easy fix for VA - new 737 J class!

Agreed. So perhaps the defining factor would be the soft product? An excellent FA and memorable food can trump an upmarket bed and lousy host any day, any flight.

Sadly, you can't 'sell' that and investors won't buy it. It really only works once the traveller has experienced it and then it works only by word of mouth, which is admittedly powerful but lacks the reach, scale and high impact of mainstream advertising and also of course relies on travellers for whom the same "X trumps Y" maths works.

 

[DavidFlynn]

Re: Easy fix for VA - new 737 J class!

As posted up thread, don't think for one second that Qantas won't start pulling their 330's off coast to coast as soon as VA do.

One has heard that Qantas is already mulling a draw-down of A330s...

 

[clipped_wings]

Re: Easy fix for VA - new 737 J class!

Sadly, you can't 'sell' that and investors won't buy it. It really only works once the traveller has experienced it and then it works only by word of mouth, which is admittedly powerful but lacks the reach, scale and high impact of mainstream advertising and also of course relies on travellers for whom the same "X trumps Y" maths works.

Yes, it's probably naive to assume VA's financial position can be fixed with a dapper CSM and a piece of fillet steak.

However, in my early years I learned the first rule of advertising: everything can be sold, because everyone has a price. I guess it's now up to VA to decide, exactly what it is they want to sell.

 

[HeavyElectricity]

Re: Easy fix for VA - new 737 J class!

WA’s weak economy means less demand for business class seats on Qantas and Virgin flights:

https://thewest.com.au/news/wa/weak-wa-gets-smaller-planes-ng-b88528691z

 

[ozstamps]

Better use up some platinum upgrade fast. SYD-PER is the only savvy use of them. (Although did I read you could use them to Fiji on weekend A330 flights?)

Any educated guesses as to when the 737 refits will start to appear on transcon?

So no info on WHEN the 737 refits are likely?