What is Virgin Australia's strategy (post-administration)?

[HS-TQE]

I think one of the biggest things VA had to work out is just what the airline wants to be. The last 12 months very much felt without an actual direction rather just "you don't like QF? Well we're here". The best I feel it is right now it's a value operator that kind of still has some premium parts but doesn't seem to know where it's going.

This could be because Bain is supposed to be an interim owner and they don't want to be the one to come up with a strategic vision for VA.

"Virgin Australia aims to be the best value carrier in the market, not a low-cost carrier. It will offer exceptional experiences at great value, regardless of purpose of travel. The airline will serve business travellers, including corporates and customers travelling for a holiday and visiting loved ones, and maintain a two-class cabin offering."

As per the quote, the words "Value Carrier" which alternatively describes Hybrids ('Value' also used by the likes of Batik, JetBlue alongside Virgin) is basically a glorified LCC with varying J cabins added (JetBlue uses lie-flats on their medium-haul international), with limited lounge services (or no Lounges for JetBlue J) and a FF program.

Exit from Administration Release:

Virgin Australia Group announces plan to focus on core strengths, re-establishing itself as an iconic Australian airline

Key points: • Plan for a stronger, more profitable and competitive Virgin Australia coming out of voluntary administration

newsroom.virginaustralia.com

 

[AustraliaPoochie]

Their mere ops of the 320 1 class, contradicts that statement above, "2 class offering".
As if ADL - PER is not important enough!
Yes, some days, there is a 737 with a J doing the ADL - PER flights, but its sometimes cancelled, as its the last tag flight of the day.
But most days, its only the 320 doing ADL - PER and other VAd flight routes.
There are work arounds, to buy more space, but its not the same J experience.
Buying lounge access adds $65 to the ADL - PER comfort seat booking, giving VA non core activities, ie, ground services, more revenue.
Maybe VAd will be good, when they get rid of their 320s, and get more 737s with a 2 class cabin, that people can buy a seat on, without having to phone up to make a comfort seat booking.

 

[HS-TQE]

Technically it was "maintain a "two-class" offering", not "guarantee a two-class offering" on every plane.

As long as VARA has some WA FIFO contract work (including wet-lease operation from mainline with the ex-KLM 73Gs) there will be one-class A320s and F100s (at least for 2024) for the short term future.

 

[Saab34]

What exactly is the point of the A320s? The 737s cannot do the exact same thing?

Can’t imagine having such a side fleet would be too great for the balance sheet.

 

[HS-TQE]

What exactly is the point of the A320s? The 737s cannot do the exact same thing?

Can’t imagine having such a side fleet would be too great for the balance sheet.

Certain (FIFO) airports in WA have either Temperature/Runway/etc requirements which are 'better handled' by the A320 or F100 than a regular 737-700 or 737-800. Hence there is still the small F100 subfleet operating into 2024.

VA still technically has 3 operational AOCs (VAd, VAi and VARA).
VAi is due to ownership/operational requirements requiring the "subsidiary" to be 51% Australian owned (i.e the same method AN and VA 1.0 used for ANi and VAi).

 

[encryptededdy]

Certain (FIFO) airports in WA have either Temperature/Runway/etc requirements which are 'better handled' by the A320 or F100 than a regular 737-700 or 737-800. Hence there is still the small F100 subfleet operating into 2024.

Would the MAX meet those requirements?

 

[Must...Fly!]

Would the MAX meet those requirements?

Doubt it, it's partly to do with clearance between ground and engine.

 

[hugamuga]

I know ONS (Onslow) is limited to the Fokker 100 (or B717) due to runway surface/width. I have heard charter contracts are pretty lucritive for airlines so keeping a smaller F100 fleet might still be worth it over losing the contracts to Qantas or Alliance.

I doubt there is anywhere where a A320 is required over a B737 due to limitations but I suspect the operating economics on an all economy A320 are pretty good, especially if the leases are cheap and they maintain a high utalisation.

 

[MEL_Traveller]

Virgin’s strategy seems to be to frustrate and delay the return of pax money at every opportunity

Refunds can be processed in as little as a few days, or end up in some silly loop where an agent insists it has to be first credited to travel bank, then refunded to create a new booking, then refunded! Each step taking ‘up to 21 days’.

Frustrating when there can be multiple refunds in the go, some are returned, some aren’t, and chasing them up becomes difficult if a particular 21-day period hasn’t lapsed. They other an agent was surprised a refund had dropped off because it hadn’t been properly queued.

It feels like they are hoping people lose track of amounts owed and won’t notice if they don’t come back.

QF on the other hand, refund within a few days, every time!

 

[Must...Fly!]

Virgin’s strategy seems to be to frustrate and delay the return of pax money at every opportunity

Refunds can be processed in as little as a few days, or end up in some silly loop where an agent insists it has to be first credited to travel bank, then refunded to create a new booking, then refunded! Each step taking ‘up to 21 days’.

Frustrating when there can be multiple refunds in the go, some are returned, some aren’t, and chasing them up becomes difficult if a particular 21-day period hasn’t lapsed. They other an agent was surprised a refund had dropped off because it hadn’t been properly queued.

QF on the other hand, refund in three days, including the credit card surcharge. Something VA won’t give back even for involuntary cancellations and refunds.

That's unfortunate. For what it's worth I've received every refund very quickly from VA. Qantas on the other hand still owe me over $120 and I've completely given up ever getting it back. You just can't speak to anyone who either listens or if they do, has any idea whatsoever about what to do.

 

[Saab34]

I have never have understood the delay with airline refunds. Tiger once took 8 weeks to issue a refund, and it even noted that in the email that it will take ‘6-8 weeks’

What on earth takes it so long? It’s all electronic these days? 5 days tops. The agent at Tiger said on the phone they processed the refund ‘but it will take up to 8 weeks to reach you’. I mean, they took 1 second to take my money off me, how the heck does it take two months to return it?

I recently purchased something online for home delivery from BIGW. I returned them to the store, they processed the refund on the computer and it was in my account in 2 days.

 

[MEL_Traveller]

Yeah, the ‘21 days to process’ is annoying when the refund arrives on day 21. What are they doing days 1-20?? Aside from making interest off our money.

 

[MooTime]

QF on the other hand, refund within a few days, every time!

QF refund within a few days EVERY TIME...

Place in humour thread please.

 

[elanshin]

I have never have understood the delay with airline refunds. Tiger once took 8 weeks to issue a refund, and it even noted that in the email that it will take ‘6-8 weeks’

What on earth takes it so long? It’s all electronic these days? 5 days tops. The agent at Tiger said on the phone they processed the refund ‘but it will take up to 8 weeks to reach you’. I mean, they took 1 second to take my money off me, how the heck does it take two months to return it?

I recently purchased something online for home delivery from BIGW. I returned them to the store, they processed the refund on the computer and it was in my account in 2 days.

It is really how much authority each individual worker has to be able to process a refund. With call centres and online staff, i doubt most companies will put the average grunt as the person processing the refunds. Someone with at least a tiny bit of power needs to approve it.

Where as if you walked into a store for a refund, chances are you got a manager to approve it who then has the power to action it as well.

 

[MEL_Traveller]

QF refund within a few days EVERY TIME...

Place in humour thread please.

Maybe I’ve been lucky! But lately QF has really improved. Had a mix of hotel bookings and domestic flights… so nothing complicated or requiring o/s fare components etc. All have been back within a few days!

 

[serfty]

QF on the other hand, refund within a few days, every time!

Sometime yes, sometimes no.

I've been waiting 10 days for refunds on two cancelled award bookings last week.

Previous time was 3 days.

 

[HS-TQE]

Maybe I’ve been lucky! But lately QF has really improved. Had a mix of hotel bookings and domestic flights… so nothing complicated or requiring o/s fare components etc. All have been back within a few days!

Took me up to 14 days for a recent refund, whereas past cases escalated via QF Call Centre (HBA or AKL) was anywhere between 4-7 days. Perhaps being 'only' Gold had something to do with it?

 

[AIRwin]

Took me up to 14 days for a recent refund, whereas past cases escalated via QF Call Centre (HBA or AKL) was anywhere between 4-7 days. Perhaps being 'only' Gold had something to do with it?

I'm Platinum and still waiting for a simple refund of a one-way Business class booking on QF since calling to request a cancellation a week ago

 

[MEL_Traveller]

Took me up to 14 days for a recent refund, whereas past cases escalated via QF Call Centre (HBA or AKL) was anywhere between 4-7 days. Perhaps being 'only' Gold had something to do with it?

I’m silver!

To be fair these were simple MEL-SYD flights, either cancelled voluntarily or involuntarily. But I’ve been impressed compared to VA where it can be weeks.

 

[Must...Fly!]

No reason to doubt the accuracy and not sure if it's been posted before or not. But operational spend is about $25m above budget this year, apparently. Cost saving program on the horizon/underway to reduce over the next 3 years.

One wonders how important Boeing & the MAX aircraft are to fixing this in the longer term, the reduced fuel burn would surely knock a significant chunk of saving in to this supposed operational overspend. All the issues they've had over the last 12 months with staffing and IR issues would've increased costs across the board as well, with those mostly solved it may help.

Assuming the above is correct, I would agree an IPO is not coming in 2024, or possibly even 2025. It's not a lot of money in the scheme of things but they probably need time to show they're going in the right direction at least.