Qatar Airways to acquire 25% of Virgin Australia

[jase05]

People use the term slots to mean lots of different things.

I assume here they mean access to an international gate. VA could certainly use an actual slot (ie, take off or landing) from its domestic ops, which is why I think they mean access to an international gate.

Likely strategy is that QR will just can the ADL-MEL flight and replace it with a new VA service direct from MEL, and they probably didn't want to start with that in case that wasn't popular with the regulators. I find it hard to believe MEL couldn't squeeze in a new service for VA.

I would imagine they want to run 3 daily’s into MEL.

 

[ozstamps]

It is still a long way until all these final hurdled are jumped and the OTHER government regulators sign off on it.

It is early DECEMBER now.

 

[henrus]

It is still a long way until all these final hurdled are jumped and the OTHER government regulators sign off on it.

Yes but the benefit is they can now start selling the flights (and intend to do so from 11 December), if for some reason one of the hurdles isn't passed then anyone who has booked is protected with full refunds (including any other prepaid non refundable expenses covered) or moving to other services.

 

[Layslow]

Virgin is in desperate need of a capital injection, not overseas flights. Their lounges need updating and expanding (looking at you Sydney), they need more and different planes (one plane does not suit all routes) and their web/app product needs a serious overhaul. According to the Financial Review - "Bain Capital, has pulled out more than $1 billion from the airline since it rescued the carrier". Time for some of that cash to be invested back into the carrier's operations....

 

[WilsonM]

Virgin is in desperate need of a capital injection, not overseas flights. Their lounges need updating and expanding (looking at you Sydney), they need more and different planes (one plane does not suit all routes) and their web/app product needs a serious overhaul. According to the Financial Review - "Bain Capital, has pulled out more than $1 billion from the airline since it rescued the carrier". Time for some of that cash to be invested back into the carrier's operations....

But, why? They're a 'value carrier' (whatever that actually means), but they're definitely not a full service carrier looking to compete with Qantas directly. We've seen this before.

Their streamlined fleet and relative lack of expensive ground operations such as lounges help keep their costs low.

The new status changes should reduce the number of people in lounges, so they'll spend less on those and they'll get less crowded (or alternatively, people will spend more on VA).

Even their website is fit for purpose for the majority of people, who want to search SYD-OOL return or something similar.

Frankly, I can only see the next few years as a slow grind, with partnerships being the route to expansion, especially since the cost of living crisis isn't tipped to improve (so their revenue drops).

 

[ben95]

Their lounges need updating and expanding (looking at you Sydney)

Sure, I expect that’ll happen as furnitures age and the Sydney lounge will get a refresh in the coming years just like Adelaide and Melbourne. It’s relatively inexpensive and they don’t need a capital injection for that.

they need more and different planes (one plane does not suit all routes

And VA has been getting more and different planes. 7M8 and M10 are coming, more leases 738, and QR wet leases 777. Are you suggesting VA needs to be given billions of dollar and put in huge wide body orders because that’s clearly not happening nor a sensible business decision.

their web/app product needs a serious overhaul.

What? The website and apps are both fully functional, looks good and works well. I’d like some new VFF features such as booking fly ahead online but again, developing a new feature on a website doesn’t need a capital injection. VA have been actively shipping changes to the app and website for the last few months.

Your examples on why VA need a capital injection are neither factually valid nor sensible business decisions.

 

[Layslow]

Sure, I expect that’ll happen as furnitures age and the Sydney lounge will get a refresh in the coming years just like Adelaide and Melbourne. It’s relatively inexpensive and they don’t need a capital injection for that.

And VA has been getting more and different planes. 7M8 and M10 are coming, more leases 738, and QR wet leases 777. Are you suggesting VA needs to be given billions of dollar and put in huge wide body orders because that’s clearly not happening nor a sensible business decision.

What? The website and apps are both fully functional, looks good and works well. I’d like some new VFF features such as booking fly ahead online but again, developing a new feature on a website doesn’t need a capital injection. VA have been actively shipping changes to the app and website for the last few months.

Your examples on why VA need a capital injection are neither factually valid nor sensible business decisions.

You have misread my comments. Their lounges don't just need new chairs, they need to be seriously expanded and new ones built (Hobart, Cairns etc). Sydney is a disgrace and a couple of new chairs won't do anything for the capacity issues it faces.

Also on the planes, they need smaller planes for the regionaly routes they fly. Having a 180 seat 737 flying into most of the regional centres, doesn't make commercial sense. It needs capital to buy or lease new, right-sized planes for these smaller markets.

Updating IT isn't a small deal. Having been caught in one of their IT snafus earlier in the year - it needs more than a new colour added to the site.

 

[elanshin]

You have misread my comments. Their lounges don't just need new chairs, they need to be seriously expanded and new ones built (Hobart, Cairns etc). Sydney is a disgrace and a couple of new chairs won't do anything for the capacity issues it faces.

Also on the planes, they need smaller planes for the regionaly routes they fly. Having a 180 seat 737 flying into most of the regional centres, doesn't make commercial sense. It needs capital to buy or lease new, right-sized planes for these smaller markets.

Updating IT isn't a small deal. Having been caught in one of their IT snafus earlier in the year - it needs more than a new colour added to the site.

You are asking for things Virgin Australia (the airline and company) would like to have. This thread and by and large whats happening is more in line with what Bain wants to do.

Only has Bain finished offloading (which was their goal all along) would we likely see real medium to long term investment in VA the airline.

 

[BrianQQ]

The new status changes should reduce the number of people in lounges, so they'll spend less on those and they'll get less crowded (or alternatively, people will spend more on VA).

Doubt. AMEX card holders having unlimited willy-nilly access is gonna keep lounges crowded on VA's side.

 

[tmdl]

Doubt. AMEX card holders having unlimited willy-nilly access is gonna keep lounges crowded on VA's side.

Im curious on how many pax are AMEX guests in VA lounges?

 

[RooFlyer]

Virgin is in desperate need of a capital injection, not overseas flights. Their lounges need updating and expanding (looking at you Sydney), they need more and different planes (one plane does not suit all routes) and their web/app product needs a serious overhaul. According to the Financial Review - "Bain Capital, has pulled out more than $1 billion from the airline since it rescued the carrier". Time for some of that cash to be invested back into the carrier's operations....

Capital injection and (new) overseas services are not mutually exclusive.

A multiplicity of airframe types is bad for profitability, but I don't think there's been any suggestion that they are trying to have one plane that suits all types? Certainly not on the new DOH route.

Lounges - sure, are crowded but hopefully the new status hurdles will fix some of that.

Lack of Hobart (my local) lounge a function of the tiny terminal and HBA's owners greed in charging. I'm not sure VA will have a lounge in the new (slightly expanded) terminal, for much the same reason.

Im curious on how many pax are AMEX guests in VA lounges?

I would venture not a great proportion. Might be a higher proportion of those on AFF, but AMEX types more likely to be on the other mob.

 

[ben95]

You have misread my comments. Their lounges don't just need new chairs, they need to be seriously expanded and new ones built (Hobart, Cairns etc). Sydney is a disgrace and a couple of new chairs won't do anything for the capacity issues it faces.

I have not and I understand what you mean. Sydney’s lounge has got a fine foundation. It just needs to have some interior design changes made to better utilize the space and I’d expect a 15% capacity increase is totally possible using the existing space with just adjustments to the floor plan - demolition of a few internal walls and build new kitchens etc doesn’t cost an arm and a leg. Nor does VA need more money to build a few lounges in other cities - it can afford them if it wanted to build them.

Also on the planes, they need smaller planes for the regionaly routes they fly.

No it doesn’t when it could just cop the higher average per seat cost. Makes very little sense to have another fleet type and all the support/maintenance around it just for the few regional routes you fly.

Updating IT isn't a small deal. Having been caught in one of their IT snafus earlier in the year - it needs more than a new colour added to the site.

Agreed it’s not a small deal, but you also don’t rip out everything and just throw money at the problem when it comes to IT. You’d need a stream of work that fixes things bit by bit and those works combined lead to an improvement. 10x the number of investment into IT doesn’t guarantee 10x the outcome or reduce to 1/10 of time it takes. What’s exactly the problem with VA’s IT? It’s largely a Sabre GDS and some overlay on top which is fairly common in the industry. The issue from earlier this year IIRC was crowstrike and not a VA system issue.

As others have pointed out, it’s not that VA can’t afford those investments and need external monies to enable them. It’s simply its owner Bain doesn’t want it to.

 

[Mattg]

Doubt. AMEX card holders having unlimited willy-nilly access is gonna keep lounges crowded on VA's side.

Those credit card holders may well be more profitable for the Virgin Australia Group than people who fly a few times per year and get status through family pooling, flybuys etc.

 

[Bagpuss]

As others have pointed out, it’s not that VA can’t afford those investments and need external monies to enable them. It’s simply its owner Bain doesn’t want it to.

Think we are going off topic.
But the reality is Virgin Blue was almost days from collapsing, but Ansett collapsed first.
It was unprofitable for a very long time prior to voluntary administration.
There was comments from Qatar years ago on Virgin Australia that it was a good airline but a bad business.

As based on recent comments, they can't make the mistakes of the past. They really need to invest into critical areas.
They aren't going to build more lounges and they're not going to invest into new aircraft except the new E-Jets and the B737-MAX for domestic and shorthaul international operations.

The care factor is about maintaining a profitable airline.