Tokyo Haneda slot - how will Virgin Operate it?

[Bagpuss]

QR only has 3 of the 5 ex-VA 77Ws. 1 is already scrapped and the remaining one with the charter operator in Turkey (ex-Russian Charter).

3 would be enough to offer a couple Australia <> Doha flights. (I did say as a start and also they'd need to be maintained in Doha.)
It's a total long shot but some feasibility.

 

[elanshin]

QF applied for both, one new for SYD, and one move MEL from NRT to HND.

It only got one, so it went to SYD.

An interesting article from 2019 before so many things changed:

Qantas Squanders Tokyo Haneda Slot In Opposition To Virgin Australia

Qantas is massaging statistics to show it should receive both Tokyo Haneda slots available to Australian carriers rather than split an allocation with Virgin Australia.

www.forbes.com

I misread the original determination by IASC.

I imagine if QF was still flying a 747 sized plane (350+ odd seats) they wouldn't be using a second slot on SYD.

Still if we objectively table the current 2024 situation, unless the authorities want a 4th airline flying direct between AU and HND, it's a much tougher sell now for VA if QF argues the slot again for MEL with a330 against a 737 to CNS.

 

[SCM]

3 would be enough to offer a couple Australia <> Doha flights. (I did say as a start and also they'd need to be maintained in Doha.)
It's a total long shot but some feasibility.

I think this makes a lot of sense. QR wants more capacity into Doha, this is a very easy way to get that happening with immediate effect.

 

[Warragul]

IPO is unlikely anytime soon. Post IPO is no guarantee of a widebody fleet.

The best likely outcome is Qatar purchases 25% of Virgin Australia (no IPO). They could really repaint the VA widebodies they have back to VA (I believe the interior is unchanged) and use them to fly Australia <> Doha as a start.

The thinking was VA to AUH was going to be winner -tying up with EYs hub and all that.

 

[HS-TQE]

The thinking was VA to AUH was going to be winner -tying up with EYs hub and all that.

Hogan's EY wasn't exactly a power-house back in those days. Spending so much for little return, including stakes in numerous airlines which all generated losses and debt for them. Hogan legacy that era.

It took the subsequent CEOs to clean up Hogan's mess at EY.

 

[MooTime]

Bain just holding the slot for IPO reasons, Qld gov throwing money at it blah blah.

Next owners can deal with the intricacies of HND.

 

[elanshin]

Bain just holding the slot for IPO reasons, Qld gov throwing money at it blah blah.

Next owners can deal with the intricacies of HND.

Would they even have a slot by the time it they have new owners.

Perhaps this is the reason VA isn't looking to invest in the route right now fearing they may lose the slot.

 

[HS-TQE]

Would they even have a slot by the time it they have new owners.

Perhaps this is the reason VA isn't looking to invest in the route right now fearing they may lose the slot.

Chances of an IPO going by late 2024 would be very low at best, considering the external issues and the internal (self-inflicted) issues that bubbled during 2023.

My tip is the IPO would be early Q1 2025 at the earliest.

 

[Himeno]

QF applied for both, one new for SYD, and one move MEL from NRT to HND.

It only got one, so it went to SYD.

The QF slot was split between MEL and BNE with a 4/3 weekly split. It was shifted to SYD daily recently when QF returned to flying daily to NRT from both MEL and BNE.

The QF held night HND slot is also up for renewal in Dec.

 

[HS-TQE]

The QF slot was initially intended for MEL pre-COVID with BNE remaining at NRT.

The Queensland Government offered AAIF subsidy money to QF post-COVID to restart Queensland to Japan services with the short lived BNE-HND at x3 weekly before moving that (and x4 weekly MEL-HND) back to daily NRT from both cities.

JQ eventually restarted BNE-NRT and 4x weekly BNE-KIX, with AAIF subsidies applied for the BNE-KIX service (replacing the QF x3 BNE-HND).

 

[Saab34]

Even if they get widebodies, which going off the current backlog would be a 5 year wait, that would only enable them to fly once a day, into HND. That is fairly token. They really cannot put themselves in a position to apply for any future slots, as they have no aircraft that can operate anything aside Cairns, can’t apply for something that they can’t operate in the here and now…so they are stuck with this token 1 slot.

Really does seem like too much effort for not much return, and the route sucks up one whole max per day. Could run to DPS twice a day. They just really really do not want to cede this slot to QF. I think a bit of Management ego inside VA plays a part, many who have left QF prior, and not all on good terms.

 

[HS-TQE]

Even if they get widebodies, which going off the current backlog would be a 5 year wait, that would only enable them to fly once a day, into HND. That is fairly token. They really cannot put themselves in a position to apply for any future slots, as they have no aircraft that can operate anything aside Cairns, can’t apply for something that they can’t operate in the here and now…so they are stuck with this token 1 slot.

Really does seem like too much effort for not much return, and the route sucks up one whole max per day. Could run to DPS twice a day. They just really really do not want to cede this slot to QF. I think a bit of Management ego inside VA plays a part, many who have left QF prior, and not all on good terms.

VA are subject to Indonesia seat caps, so a direct swap does eat up a bit of capacity considering the ongoing cabin refurbishments. (give or take 6-12 seats more on the current MAX8 config depending on the current 800NG configs operating to DPS).

And as mentioned, there's the Queensland Government AAIF subsidy, without said taxpayer subsidy Bain would've just let the Haneda slot lapse. Most of the Borghetti/Scurrah era management would've been well and truly moved on by the Bain appointed management.

 

[SeaWolf]

I think the bit we're overlooking in this discussion is that we're mostly assuming the route is unprofitable, even with the Queensland gov subsidy and we just don't know that. There's a decent chance that the route could be profitable right now (with the subsidy and cargo revenue) or, based on forward bookings, likely to become profitable in the near future. Even more likely if there's plans to ramp up marketing holidays in Cairns to Japanese tourists, it was once a very popular destination for the Japanese market.

There's also a lot of discussion here about IASC potentially not renewing the determination based on factors and criteria that IASC simply does not consider during a renewal determination process. What is does consider is quite clearly defined and limited by the Act, the regulations and the Minster's policy statement. Legislative Framework and Procedures

In the event that Virgin did not apply for a renewal or was unsuccessful in obtaining one, that wouldn't automatically give the slot to Qantas anyway. At that point a fresh Application for Capacity process would begin and Qantas, Virgin and potentially others (Rex?) could apply again, starting afresh and either repeating or totally changing what they're proposing to do with the capacity.

 

[BNEFlyer]

3 would be enough to offer a couple Australia <> Doha flights. (I did say as a start and also they'd need to be maintained in Doha.)
It's a total long shot but some feasibility.

They're allocated to DOH-HKT-PEN, and some BKK/RUH/DXB flights. It's unlikely QR would send a non-Q Suite 777 to Australia.

 

[Bagpuss]

They're allocated to DOH-HKT-PEN, and some BKK/RUH/DXB flights. It's unlikely QR would send a non-Q Suite 777 to Australia.

They'd be operated as Virgin Australia ;-) (as my comment was based on Qatar acquiring a stake in VA. If they acquired VA that gets around increasing capacity as it would be VA flights and not QR)

 

[PERLHR]

They'd be operated as Virgin Australia ;-) (as my comment was based on Qatar acquiring a stake in VA. If they acquired VA that gets around increasing capacity as it would be VA flights and not QR)

Agree. Would love to see this.

 

[justinbrett]

They'd be operated as Virgin Australia ;-) (as my comment was based on Qatar acquiring a stake in VA. If they acquired VA that gets around increasing capacity as it would be VA flights and not QR)

*Virgin Australia International, which must be 51% Australian owned.

Not impossible but would require some creative accounting.

Might be easier to use 777 partners, I hear they offer great deals on finance

 

[elanshin]

I think the bit we're overlooking in this discussion is that we're mostly assuming the route is unprofitable, even with the Queensland gov subsidy and we just don't know that. There's a decent chance that the route could be profitable right now (with the subsidy and cargo revenue) or, based on forward bookings, likely to become profitable in the near future. Even more likely if there's plans to ramp up marketing holidays in Cairns to Japanese tourists, it was once a very popular destination for the Japanese market.

Profitability isn't necessarily the consideration here. Although I think we can say that this route is likely underperforming given the circumstances. Tokyo was/is a red hot market in 2023. A route can both be profitable and underperforming.

There's also a lot of discussion here about IASC potentially not renewing the determination based on factors and criteria that IASC simply does not consider during a renewal determination process. What is does consider is quite clearly defined and limited by the Act, the regulations and the Minster's policy statement. Legislative Framework and Procedures

There's this section here.
22(a) could be argued by QF and then they put in an application. Doesn't mean it's a guarantee but I would suspect this gives them rights to challenge the slot.

Criteria to apply to applications
Renewal of full determinations

20. A number of different criteria may apply to the renewal of determinations. The criteria to be applied depend on whether the determination is a full (five-year or 99-year) determination or an interim (three-year) one and if capacity and route rights are unrestricted. The criteria for renewal of full determinations reflect a rebuttable presumption in favour of the incumbent.

21. For full determinations, the Commission must make the same allocation of capacity as the original determination unless the Commission is satisfied that that same amount of allocation is no longer of benefit to the public (section 8 of the Act).

22. An allocation is generally no longer of benefit to the public if
(a) the carrier seeking renewal has failed to service the route effectively; and
(b) there are other applications for some or all of the capacity; and
(c) the Commission, having regard to the reasonable capability criterion and any of the additional criteria that it considers relevant, is satisfied that a different allocation of the capacity would be of greater benefit to the public.

In the event that Virgin did not apply for a renewal or was unsuccessful in obtaining one, that wouldn't automatically give the slot to Qantas anyway. At that point a fresh Application for Capacity process would begin and Qantas, Virgin and potentially others (Rex?) could apply again, starting afresh and either repeating or totally changing what they're proposing to do with the capacity.

I would believe that for VA to lose their slot instead of it being renewed, QF would have had to come in with a challenge and alternative. So basically it would mean IASC has determined QF's alternative is better hence it is award to QF. Realistically no other AU airline is flying int'l anyways.

 

[Bagpuss]

*Virgin Australia International, which must be 51% Australian owned.

Not impossible but would require some creative accounting.

Might be easier to use 777 partners, I hear they offer great deals on finance

The creative accounting already exists and has for ages as it dates back to when Virgin Australia was majority owned by International airlines.

 

[Bagpuss]

And as mentioned, there's the Queensland Government AAIF subsidy, without said taxpayer subsidy Bain would've just let the Haneda slot lapse. Most of the Borghetti/Scurrah era management would've been well and truly moved on by the Bain appointed management.

Pretty much hearsay. May or may not be true.