Tokyo Haneda slot - how will Virgin Operate it?

[somewhatfreqflyer]

There is no known reason why VA would lose the route, less now than before given the plans are clear.
They'll be initially using their 737-700's (with J/Business Class) for the first 6 ish weeks due to a delay with the Max, then the Max after that.
Are you based in Cairns/North Qld?

Based in Brisbane but looking at the route prices now to connect via SYD vs. CNS (once you get over again flying the wrong direction) the pricing can't be beat on VA. Timing of landing at HND with the VA route also preferred.

 

[somewhatfreqflyer]

Not lose, but entirely possible they will pull out if they lose too much money on it. There’s only so much the QLD AAIF can help as there’s so many carriers in the program and it’s capped at 200M over 3 years.

Inaugural flight still has 5/8 J seats for sale.

QF’s increased capacity to Tokyo will put further downwards pressure on fares which will reduce the profit margin - generally you need to be selling J or freight to get by on these routes. The higher Y fares might work for now but those days are numbered.

They really need to hope for a strong ex-CNS market, as I don’t think they’ll be able to compete on price for connections from the southern states.

How long do you suspect VA would give it if they did lose money on route before pulling route? The inaugural of June is 6 months before when I'm looking for tickets in prime December season.

 

[Saab34]

How long do you suspect VA would give it if they did lose money on route before pulling route? The inaugural of June is 6 months before when I'm looking for tickets in prime December season.

At least a year or two. It is a 737 also, not a A330, I don't think it will be burning hundreds of millions like Hong Kong did, something like a $120m loss in a few short years.

I really think they are just wasting time with this one slot, even if they get a wide body, the competitors still have significantly more capacity, Virgin would be just a dwarf, like Hong Kong.

 

[HS-TQE]

How long do you suspect VA would give it if they did lose money on route before pulling route? The inaugural of June is 6 months before when I'm looking for tickets in prime December season.

As long as their QLD AAIF Contract dictates, which is typically anywhere between 18 months to 3 years. The Queensland taxpayers are underwriting part of the 'expected' losses on this route for the subsidised period.

The 'real' question is whether VA will stick around on CNS-HND once the Queensland Government Taxpayers/North Queensland Tourism AAIF subsidies expires.

 

[justinbrett]

As long as their QLD AAIF Contract dictates, which is typically anywhere between 18 months to 3 years. The Queensland taxpayers are underwriting part of the 'expected' losses on this route for the subsidised period.

The 'real' question is whether VA will stick around on CNS-HND once the Queensland Government Taxpayers/North Queensland Tourism AAIF subsidies expires.

It's not an unlimited cash cow - the whole program is 200M over 3 years (~65M/year) and that's spread over 18+ routes - many others are widebodies with far more to gain/lose than a 737 service.

They haven't published how the funding actually works, but I very much doubt it would be able to absorb continued loss over the full period of time. For all we know (and we don't, it would be commercial in confidence), there's probably a termination clause the government can pull.

 

[dajop]

I really think they are just wasting time with this one slot, even if they get a wide body, the competitors still have significantly more capacity, Virgin would be just a dwarf, like Hong Kong.

The long term success of just having one slot almost certainly depends on whether they can operate it as part of a mutually beneficial arrangement with NH. Without NH, I agree it’s doomed to fail.

 

[jase05]

The long term success of just having one slot almost certainly depends on whether they can operate it as part of a mutually beneficial arrangement with NH. Without NH, I agree it’s doomed to fail.

Agree and that’s why I think there is more to it with the VA/NH tie up

 

[HS-TQE]

The long term success of just having one slot almost certainly depends on whether they can operate it as part of a mutually beneficial arrangement with NH. Without NH, I agree it’s doomed to fail.

VA/NH could also technically apply for a JV on this corridor to 'share costs' as well, although it's unlikely VA will be doing 'JVs' for the foreseeable future after mixed experiences in both directions.

The first example is the failed NZ JV where NZ accused VA of not lifting their weight (and still VA 1.0 allegedly bled money whilst still in a TransTasman JV), and on the other end, where DL refused to operate other TransPacific flights for VA 1.0 and VA 1.0 had to do the lion's share of the LAX runs.

 

[Saab34]

If they couldn't make Hong Kong work (and bled a horrid amount of cash) with widebodies, why is Japan any different?

Similar corporate traffic, similar competitive environment, similar fuel burns/overheads. Cheap aircraft leases perhaps?

 

[Human]

If they couldn't make Hong Kong work (and bled a horrid amount of cash) with widebodies, why is Japan any different?

Similar corporate traffic, similar competitive environment, similar fuel burns/overheads. Cheap aircraft leases perhaps?

Well, there are obvious differences between Hong Kong and Japan. From memory, the civil unrest in Hong Kong (and associated worsening of the relationship between the Australian and Chinese governments), as well as the tightening of police powers, was happening at the same time as Virgin was trying to get its service to Hong Kong established. So there goes the tourist market.

Also one would think that it's easier to fill a 737 than an A330 ... not to mention that apparently the lease charges for the A330s were horrendous.

But I agree with the previous comments that Virgin needs a mutually-beneficial partnership with ANA for this to work in the long term.

 

[antycbr]

Well, there are obvious differences between Hong Kong and Japan. From memory, the civil unrest in Hong Kong (and associated worsening of the relationship between the Australian and Chinese governments), as well as the tightening of police powers, was happening at the same time as Virgin was trying to get its service to Hong Kong established. So there goes the tourist market

Correct, we flew VA and were in HKG for the million people March which kicked off the National Security Law.

Also, Hong Kong Airlines was supposed to be the partner at the PRC/HKG end, and that airline is a shadow of its former self.

 

[Quickstatus]

Looking at winter Japan visit and don't want to buy now and regret

Flying into HND is not necessarily all that beneficial if going skiing in Japan, unless planning to stopover in Tokyo first. Even then it's

 

[AIRwin]

Even then it's

It's?

 

[Must...Fly!]

Also, Hong Kong Airlines was supposed to be the partner at the PRC/HKG end, and that airline is a shadow of its former self.

The lounge they had in the satellite terminal was pretty good.

 

[antycbr]

The lounge they had in the satellite terminal was pretty good.

It certainly was a nice way to spend an hour while the airport had a ground stop due to a storm cell. Excellent mixed coughtails and noodle station. No wonder VA1 went into administration having to pay Hong Kong Airlines for that.

 

[jase05]

It certainly was a nice way to spend an hour while the airport had a ground stop due to a storm cell. Excellent mixed coughtails and noodle station. No wonder VA1 went into administration having to pay Hong Kong Airlines for that.

The coughtails were superb and I loved the beer on tap. Had one of the best showers too. Was an excellent way to spend a couple of hours before coming home. I do miss the those VA flights to HKG

 

[JasonK]

Flying into HND is not necessarily all that beneficial if going skiing in Japan, unless planning to stopover in Tokyo first. Even then it's

Why not? There's more domestic flights from HND then there is at NRT, though timing wise it's not a great time to connect to a domestic flight if arriving after 8pm.

 

[Quickstatus]

Even then it's

It's?

There's more domestic flights from HND then there is at NRT

Don't know what happened to after "it's"

But to complete:
Even then it's debatable whether HND is better than NRT for skiing reasons. IMO Trains are the preferred way to travel for skiing in Japan except for maybe Hokkaido and CTS

 

[funnybrus]

Just had a chat with a VA pilot at the footy this arvo, he reckons there's 60pax only on the 700s

 

[Saab34]

Well the good thing with that is the ability to turn the row into a bed.