So what routes will VA cut ?

[juddles]

And let's not forget the Recession.......

 

[Plutonus]

Perhaps load factors for routes will give a hint.

The NSW Domestic Aviation Performance report has the following load factors and passenger numbers, albeit for all airlines, for intrastate during the year ended September 2018:

- Ballina 434,000 83.2%
- Coffs Harbour 344,000 72.3%
- Albury 224,000 70.8%
- Tamworth 176,000 66%
- Port Macquarie 188,000 78.3%

For interstate, Hamilton Island looks bad at 66.6%.

Report available here https://www.destinationnsw.com.au/w...03/domestic-aviation-performance-sep-2018.pdf

This is just one part (NSW) of the bigger picture though.

 

[ozfflyer]

Perhaps load factors for routes will give a hint.

The NSW Domestic Aviation Performance report has the following load factors and passenger numbers, albeit for all airlines, for intrastate during the year ended September 2018:

- Ballina 434,000 83.2%
- Coffs Harbour 344,000 72.3%
- Albury 224,000 70.8%
- Tamworth 176,000 66%
- Port Macquarie 188,000 78.3%

For interstate, Hamilton Island looks bad at 66.6%.

Report available here https://www.destinationnsw.com.au/w...03/domestic-aviation-performance-sep-2018.pdf

This is just one part (NSW) of the bigger picture though.

load factors tell you nothing about yields. A full aircraft at low fares, might yield less than a 50% load factor at high fares. There's a lot of matching other airlines fares(in some form) going on right now.

 

[Stealthflyer]

forgot about Tassie. Is it still part of OZ or an international flight ?

Ha! Yes, last time I looked, Tasmania was still part of Australia.

If they cut Tasmanian flights it’ll be after the peak summer season. Qantas is putting on extra flights to Tassie over summer so the demand must be there.

Even now, all my VA Hobart - Melbourne flights have been full lately apart from the 9.45pm ones. However, this last one feeds the late (as in midnight/1am) Singapore and Etihad Melbourne departures, so there would be pressures to continue beyond Virgin’s own operating network. I’ll often board an SQ flight in Melbourne and spot many of my fellow Tassie passengers. On a slightly related topic, it’ll be interesting to see how things change once Hobart is opened up to international flights in a few years.

 

[Saab34]

Why don’t they fly the ATR Mildura?

 

[jakeseven7]

I bet someone at VA is just wishing they could have got the ATR strategy right, they are perfect for skinny routes and can fly profitably at low load factors.

I get the whole fleet streamlining and all the engineering issues they ran into, but it is going to mean those routes get gobbled up by QFLink and even JQ who have a rock bottom cost base.

 

[Bagpuss]

Kununurra (if they still fly there)

This year they added more seasonal flights between Perth to Kununurra and modified the Friday flight to be morning to not conflict with the seasonal Air North schedule.
Off season they drop the Tuesday service.

Next year they are starting Mellbourne - Kununurra which is seasonal with Alliance F70. Though this would be subsidized service.

 

[theblank]

Bali will go. Very low yield surely.

Thats interesting, where do you get these figures from?
I fly to or from Bali at least once a year for many years (mostly from, the red-eye flight to BNE is a great time), and its always fairly full.

 

[ozfflyer]

Thats interesting, where do you get these figures from?
I fly to or from Bali at least once a year for many years (mostly from, the red-eye flight to BNE is a great time), and its always fairly full.

full doesn't mean making any money. A 50% load factor might make more money, if fares higher. The big question is, can they use the aircraft somewhere else for better return, or will they reduce fleet size, ie. when some 738s come off lease, not replace them. The maxs have already been deferred.

VA pilots seem to think the A330s are going.

Have no idea of when maintenance is required on aircraft, but would assume perfect time for Bali flights would be Saturday pm (which is quiet domestically) to DPS & come back straight away to be back for Sunday pm rush, assuming the aircraft that can do Bali, can do OZ domestic (there are a few different AOCs & there was something a whole ago, with Tiger not having the right AOC or something like that)

 

[ozfflyer]

I bet someone at VA is just wishing they could have got the ATR strategy right, they are perfect for skinny routes and can fly profitably at low load factors.

I get the whole fleet streamlining and all the engineering issues they ran into, but it is going to mean those routes get gobbled up by QFLink and even JQ who have a rock bottom cost base.

yes that's the catch 22, if VA pull off a route or reduce capacity, then JQ or QF might replace at 50% or less of what VA reduce by.

 

[ozfflyer]

Ha! Yes, last time I looked, Tasmania was still part of Australia.

If they cut Tasmanian flights it’ll be after the peak summer season. Qantas is putting on extra flights to Tassie over summer so the demand must be there.

Even now, all my VA Hobart - Melbourne flights have been full lately apart from the 9.45pm ones. However, this last one feeds the late (as in midnight/1am) Singapore and Etihad Melbourne departures, so there would be pressures to continue beyond Virgin’s own operating network. I’ll often board an SQ flight in Melbourne and spot many of my fellow Tassie passengers. On a slightly related topic, it’ll be interesting to see how things change once Hobart is opened up to international flights in a few years.

again load factors have nothing to do with yield. They might be matching the opposition sales fares to some extent. Seems to be a lot of what I've heard called drip feeding, ie.

If a flight has 90 unsold seats a long way out, release 9 every week or 2 at a sale type price, without actually advertising a sale, perhaps looking at average stay at destination & trying to not match up in both directions.

Airlines have to be very careful that the public don't benchmark a certain route/fare.

AT start of GFC both VA & DL starting flying OZ/USA & all airlines were having sales at $999 return & less for kids in middle of peak season. Still talk to people who say, we'll go to USA when fares in middle of school holidays(not end) are $999 return.

Also don't understand why internationally airlines still have child fares at all. Just charge the same for adults/kids. When any sale fares are advertised, you never see a child fare advertised. With lower taxes for kids, airlines could actually nett more for kids than adults, if fares the same.

 

[odysseus]

Also don't understand why internationally airlines still have child fares at all. Just charge the same for adults/kids. When any sale fares are advertised, you never see a child fare advertised. With lower taxes for kids, airlines could actually nett more for kids than adults, if fares the same.

The obvious one, demand. If the flight price alone is say $4000 for a family of 4, it will cause some to not go ahead compared to say $3500.

And getting 4 sales at once helps revenue a lot more than having 4 more seats going empty. Both relate to yield and load factors, but the fact you bump up your yield a few per cent against other seats by not giving a discount doesn't help your overall financial position if that yield is based on a low load factor.

 

[ozfflyer]

The obvious one, demand. If the flight price alone is say $4000 for a family of 4, it will cause some to not go ahead compared to say $3500.

And getting 4 sales at once helps revenue a lot more than having 4 more seats going empty. Both relate to yield and load factors, but the fact you bump up your yield a few per cent against other seats by not giving a discount doesn't help your overall financial position if that yield is based on a low load factor.

look at it this way, if an airline advertised a return fare from SYD to LAX for $1142(per adult). Kids are very roughly 75%, so 2a + 2c = $3997. Bet they would get many more takers if they advertised $999 (for everyone) + the power of price points is enormous. Having worked in retail for 25 years, I can tell you, $999 is about $200 or more, less than $1000, in the mind.

Maybe a good way to move seats, is to say ...

1 seat (booked at same time, same itinerary) $999
2, $979 each
3, $959 each
4, $939 each
5, $919 each
6, $899 each

or instead of dropping price, give something away, like extra ff pts, increasing for each person the more in booking.

or offer the 10th seat free. It's amazing how one person, can get 9 others to go, if he/she is getting a free ticket.

 

[clipped_wings]

I can tell you, $999 is about $200 or more, less than $1000, in the mind.

Amen to that. I've been selling signs for over 40 years as I will back this statement up with my life. Humans are such funny things. You see .99 and .95 and your brain just insists it is hugely lower.

 

[Must...Fly!]

You'd be looking at eastern seaboard reductions. GET is already gone, most of what is left ex-PER should be fairly profitable and/or lucrative to attracting passengers ex-East coast capitals.
Agree with previous posters, look toward relatively minor destinations with a single daily service. Low hanging fruit - unfortunately for those communities the price they pay will be higher to travel. Or they will have to look in to alternatives that don't involve flying.

 

[Saab34]

Subbing Tiger in won’t work on some routes. Most people don’t fly that outfit for good reasons so they will just end up with QF.

They tried this before with giving Tiger some SYD-OOL Slots. Didn’t work and Tiger pulled back and Virgin increased again.

QF doesn’t get this as bad as JQ doesn’t have such a poor image and does get 20% more flights away on time compared to Tiger.

Tiger also which is probably part of the review flies some odd routes alongside Virgin like Sydney to Coffs 5 times a week with Virgin double daily, what’s the point. It’s a route that VA would be better off serving itself with being the only Jet operator on the route.

 

[HS-TQE]

“We have made good progress in where we will continue to fly,” he said.

“You will see us pull out of some routes … some entirely. I’m not going to sugar-coat that. We will be making some of those decisions.

“There are spots in our international offering that are going really well, the USA in particular is doing very well.

“We will have to take another look at Hong Kong given the disruption that’s happening there as a destination.

“But we are focused on routes we have used for some time that have made money (across both domestic and international).”

Also focuses on yields as well. I'm sure that PS has the yields in addition to the loads when it comes to the International division (both Short Haul and Long Haul).

It seems that LAX may be the only "Safe Bet", whilst everything else internationally is under the microscope.

Source:

Virgin Australia CEO Paul Scurrah reveals changes to flight routes

Following a week of lows for Australia’s second largest airline, the CEO of Virgin Australia says it is a step closer to putting poor-performing flight routes on the chopping block.

amp.news.com.au

 

[docjames]

US routes stay and HK will get a stay of execution pending whether the VS deal gets traction and the policial unrest settles down.

It’s the short haul international where they seem to be losing the most money - expect much of the rationalisation to occur there., with the NZ crew base to be under threat as it’s no longer cheaper than Aus base.

They need to be careful not to cut domestic too tightly - part of the attraction to business (read: higher fare paying flyers) is to be able to use them to multiple destinations and not split across carriers.

Could they look at refitting the 738s with a "proper" coast-to-coast J product which was mooted some time ago (when discussing 737MAX orders) and then use a sub-fleet of 738s on BNE/SYD/MEL-PER flights (thereby ridding themselves of the 330s)? The refitting with scitmars on a sub-fleet would make sense for this lot given the flight durations.

 

[Saab34]

Could they look at refitting the 738s with a "proper" coast-to-coast J product which was mooted some time ago (

Doubtful as all projects that involve capex have been put on hold. And something like that is another 10 million.

 

[docjames]

Doubtful as all projects that involve capex have been put on hold. And something like that is another 10 million.

Yes (I had considered that) although its offset against saving from offloading the A330s;