Virgin may be forced to give up Sydney Airport slots to other airlines

[jakeseven7]

Interesting article as new airlines / route expansions come online, VA2 may be forced to give up slots it no longer utilises at SYD as it’s fleet has halved since the collapse, including the folding of Tiger.

Rex and Bonza appear ready to leap on the slots VA2 are not using, some good hard lobbying to pick up VA2’s slots in the background is occurring no doubt…

Interesting also as Bonza originally said ‘no Sydney’ (which many people here did not believe for a second )….

——

Virgin’s share of Sydney Airport slots under threat​

Virgin Australia has been accused of hoarding take-off and landing slots at Sydney Airport which it no longer has enough aircraft to use, potentially locking out competitors from the country’s most important gateway.

Business Sydney (the Sydney Business Chamber) is concerned the city’s COVID-19 recovery will be stymied if the airport is not operating at maximum capacity, and is lobbying the federal government to reallocate all slots previously held by Virgin.

Virgin has reduced its fleet to 68 Boeing 737 jets since its collapse into administration last year, compared to 133 aircraft in 2019. It has nine more aircraft set to enter its operations by March.

Country airline Regional Express (Rex) approached Business Sydney about the issue and the lobby group has written to the Transport Minister and Deputy Prime Minister Barnaby Joyce to raise its concerns that Virgin has more slots than it can feasibly use.

Meanwhile, another budget airline challenger called Bonza, backed by US private investment firm 777 Partners, is planning to launch in Australia by mid-2022, with access to Sydney Airport slots considered essential to its success.

A review of demand management at Sydney Airport by former Productivity Commission chair Peter Harris, which was delivered to government in January, recommended a number of changes to make it harder for airlines to hold more slots than they can use, including stronger enforcement of the “use-it-or-lose-it” rule.

A spokesman for Mr Joyce said the Deputy Prime Minister took the concerns raised by Business Sydney “seriously”.

Virgin’s share of Sydney Airport slots under fire

Virgin Australia has been accused of hoarding take-off and landing slots at Sydney Airport.

www.smh.com.au

 

[Carrots]

Arh Rex.....the gift that keeps on giving.

 

[HS-TQE]

I can't remember if Bonza ever said 'No Sydney'. Bonza did say 'no triangle' from memory, thus routes like SYD-LST, SYD-MEB or SYD-ROK was always on the cards for them alongside their brothers overseas like 'Allegiant style' point to point (1 or 2x weekly) routes like MCY-WOL.

 

[jakeseven7]

It appears Bonza has been doing some reasonable lobbying work behind the scenes as well as Rexy this time…

 

[MooTime]

Would only a be temp swap to hand over a few SYD slots from VA to Rexy. How long Rexy going to use/need them.

 

[Saab34]

Why give slots to Rex the flights are 1/3 full. Quite frustrating when you can’t get a seat on VA because Rex has the slots, and the Rex flights are empty regardless.

Waste of slots giving them to Rex.

 

[jakeseven7]

Why give slots to Rex the flights are 1/3 full. Quite frustrating when you can’t get a seat on VA because Rex has the slots, and the Rex flights are empty regardless.

Waste of slots giving them to Rex.

I think it’s both Rex and Bonza agitating behind the scenes for when all borders fully open in the very near future and we see confidence return to domestic travel as the state prison masters / premiers are put back in their box.

Having said that - if ALL VA2 Syd slots are up for grabs for re-distribution I’m sure QF and JQ would happily take some up too…

 

[eastwest101]

Why give slots to Rex the flights are 1/3 full. Quite frustrating when you can’t get a seat on VA because Rex has the slots, and the Rex flights are empty regardless.

Waste of slots giving them to Rex.

Quite a leap in logic there applying a cherry-picked statistic at the height of state border closures to justify excluding one competitor from getting slots. At some point in the recent past, everyones' flights would have been 1/3 full except for maybe internal NSW flights which would mostly be QF Link and Rex, especially when all the state borders were closed. We have the state premiers to thank for that.

Both VA and JQ and QF flew some flights in and out of SYD that were empty (freight only) or close to it.

Waste of slots giving them to Qantas/Jetstar and Virgin.

A "fairer" way would be for domestic slots to be assigned on a proportional basis according to the number and class/pax capacity of active aircraft on the Australian register at the time. And then allow them to be traded or leased on a contract basis for a fixed period to be followed by a national fleet "census" and periodic reassignment/review. International slots would be a bit trickier to do like that, but something like that would work for the Australian domestic market.

 

[henrus]

I think it's only fair that they give VA a reasonable amount of time before they force them to hand them over.

Right now air travel around Australia and overseas is not back to normal so it's crazy that ZL and Bonza (insert airline code here if they ever get one), can complain and potentially get it whilst their competitors have struggled over the last 12-24 months.

 

[AustraliaPoochie]

I can't remember if Bonza ever said 'No Sydney'. Bonza did say 'no triangle' from memory, thus routes like SYD-LST, SYD >>>(((MEB)))<<< or SYD-ROK was
always on the cards for them alongside their brothers overseas like 'Allegiant style' point to point (1 or 2x weekly) routes like MCY-WOL.

Did you mistype?
MEB is Essendon, close by to Tullamarine.

 

[dajop]

I think it's only fair that they give VA a reasonable amount of time before they force them to hand them over.

Right now air travel around Australia and overseas is not back to normal so it's crazy that ZL and Bonza (insert airline code here if they ever get one), can complain and potentially get it whilst their competitors have struggled over the last 12-24 months.

I would agree if, like QF, for example they had substantially maintained their fleet and were waiting for demand to recover. But if the above quoted article is correct their 2022 fleet stands at 77, significantly less than their 2019 fleet, And they are a different company too. Did they pay for their slots ( as for example many carriers have to at LHR)? If so, maybe there’s merit in allowing to keep or trade them. If not is historical legacy a reason to maintain all of their slots even though they are smaller than they were?

 

[henrus]

But if the above quoted article is correct their 2022 fleet stands at 77, significantly less than their 2019 fleet, And they are a different company too

Sydney is a bad example but I wonder how many daily flights VA was operating compared to what they are now. Take Brisbane to Cairns for example, this route used to have about 3 daily flights (in each direction) but now this is up to 6. I wonder if the new look VA given they're operating smaller routes actually need more slots to keep high frequencies up... look I'm playing the devils advocate here but I think just running off fleet numbers is a bad idea.

Another part to this is, according to Google Flights only 21% of flights to/from SYD are operating so it's hard to tell if the same thing will happen as is the case in the great state of Queensland where we've ended up with more intra state flights post covid.

 

[jakeseven7]

I think it's only fair that they give VA a reasonable amount of time before they force them to hand them over.

Right now air travel around Australia and overseas is not back to normal so it's crazy that ZL and Bonza (insert airline code here if they ever get one), can complain and potentially get it whilst their competitors have struggled over the last 12-24 months.

I think the point being made is that VA2 don’t actually have the aircraft anymore to operate them even if they wanted to, they have about halved in size - so therefore their slots should be reallocated.

I think Bonza’s case is weaker - they don’t have aircraft either (yet!), but Rexy might actually have a valid point this time if they can’t get slots, have the planes ready and waiting and VA2 just has them as a legacy carry over pre-collapse and downsizing.

 

[jb747]

I don’t think there should be any trading of slots. No sale, swaps or anything. Otherwise they end up like taxi plates, as stupidly valuable assets, that are used to keep others out.

Use it or lose it should apply to everyone. But, not until some normality returns to the world, otherwise we’re simply doing even more harm to carriers who have already had to weather the covid shutdowns.

 

[HeavyElectricity]

I guess with the loss of the A330s, that east-west flights might be more frequent on 737s to replace them (assuming a "normal" demand as per pre-covid, which is probably an assumption you can't make).

 

[Saab34]

I don’t think Virgin will have an issue with ‘use it or lose it’.

In 24-36 months Virgins 737 fleet will be higher than that of the previous Virgin 1.0 737/A330Dom allocation. All the talk of ‘fleet cut’ is largely irrelevant to Sydney slots as many of these aircraft were not involved in Sydney.

Virgin will use them, I have no doubt in my mind.

 

[eastwest101]

Agree with others that its a bit early to arguing about slots with a lot of state borders closed and the domestic market still in complete turmoil. I can see that Virgin is hanging onto these slots because once all the borders do open, then they will be redeploying capacity and ceasing weird "operate it because the state premiers allow it" flights such as ADL-HBA and say SYD-CFS, to flights on routes that will have higher demand and a better yield e.g. SYD-PER and SYD-BNE. As other mentioned - the loss of VA A330 fleet hits them because they have lost that larger capacity with one slot with an A330 and now need 2 slots for two B738s so may be able to use it rather than lose it. Rex's regional NSW slots are carved out and protected to some degree but when you look at the sheer number of domestic frames pre-covid to post covid then VA has lost a lot, TT is completely gone, JQ have kept their fleet roughly the same size, Rex have added a few B738s and Qantas has added a few through Alliance E190s although a lot of A330s are still grounded and their fate rests on overseas markets and borders reopening. Although they don't have a single plane yet Bonza do have a legitimate point about existing operators "hoarding slots" or even gates, to impede new competitors. Other big thing but further away will be the opening of Western Sydney Airport which will relieve some of the slot pressure although you might think the uptake might be slow there?

As I remember it - the slots question is settled by Airport Co-ordination Australia where when a slot becomes "available" it was assigned on some basis and the slot was related to one operator at a gate at a certain time, what the operator did with that slot was up to them but obviously they had to schedule flights and have aircraft movements to use that slot, and make it their own business to have aircraft in the right time and place to use that slot.

 

[dajop]

I don’t think there should be any trading of slots. No sale, swaps or anything. Otherwise they end up like taxi plates, as stupidly valuable assets, that are used to keep others out.

Use it or lose it should apply to everyone. But, not until some normality returns to the world, otherwise we’re simply doing even more harm to carriers who have already had to weather the covid shutdowns.

I agree with the use it or lose it approach, and that should be delayed until normality resumes.

It could be argued that VA slots should be maintained, but one carrier has shut down completely (Tiger). Why should its slots be protected for VA?

 

[AustraliaPoochie]

Has it been said if the slots VA used, that would be lost/have to be given up, would it be at SYDd T2 or at SYDi T1?
If SYDd T2, then maybe it would be a good idea for VA to cede, and thus pay less fees, maybe our fares would go down a bit, (we can only dream).
But hopefully, for the slot at SYDi T1, they should be able to keep it.
If its at SYDi T1 that they have to give up as well as SYDd T2, would be hard for VA2 to fly internationally again if they have to try and re obtain take/off landing/gate slots.
Until the Sydney West airport opens up in 10/15/20 years that is.

 

[jb747]

Has it been said if the slots VA used, that would be lost/have to be given up, would it be at SYDd T2 or at SYDi T1?
If SYDd T2, then maybe it would be a good idea for VA to cede, and thus pay less fees, maybe our fares would go down a bit, (we can only dream).
But hopefully, for the slot at SYDi T1, they should be able to keep it.
If its at SYDi T1 that they have to give up as well as SYDd T2, would be hard for VA2 to fly internationally again if they have to try and re obtain take/off landing/gate slots.

I doubt that Virgin will be putting any effort into international for quite some time. If ever. But the same logic applies . If it isn’t being used, then it should be available for others, otherwise it’s simply being used to keep others out. But, as I still believe normality won’t return to travel before 2025, I can’t see any hurry in making any space available.