Qantas and Virgin set to split Haneda landing rights

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In a bit of an unexpected turn since Virgin’s announcement that it’d review its entire network for profitability, the airline is almost certain to be gifted one of the two additional landing rights for Haneda Airport in Tokyo.

Virgin and Qantas both applied for two rare landings slots at Haneda, which had become available to Australian airlines. Virgin asked for one whilst Qantas wished to secure both slots.This week the International Air Services Commission (IASC) issued a draft decision awarding both airlines one slot each, believing Virgin entering the Tokyo market would bring greater competition and airfare competition.

The Virgin slot, if successful, would see them use an A330 daily service out of Brisbane in late March 2020. The news for Virgin comes after the airline recently signed on a partnership with All Nippon Airways. The partnership would see see the two airlines code-share on fall lights between Australia and  Japan as well as domestic internal flights.

Rival Qantas hoped to secure both slots, using one to shift its Melbourne flight from Narita to Haneda and use the additional slot to offer Sydneysiders a twice daily service to Tokyo. If the split of landing rights goes ahead, Qantas will have to decide which way it will use that one slot.

Further submissions are being made to IASC with the body to make a final decision in the near future.

Virgin set make Velocity fully Virgin owned again

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Loyalty programs are a cash cow for airlines to the point that some airlines sell a stake or the whole cow for a quick profit hit. Those who have taken the gamble tend to not seen it pay off and more often than not find themselves paying for it, or in the case of Air Canada creating a whole new competing loyalty program.

In 2014 Virgin sold part of its Velocity business to Affinity Equity Partners (AEP). Since the sale the program it has grown to be the third biggest loyalty program in Australia behind Qantas and Woolworths. Virgin now has sellers remorse and has enter an agreement to buy back the 35 per cent of its Velocity program it sold to AEP for $700 million. This is more than double what they sold it for to the group five years earlier.

Virgin has experienced some rocky annual results of late but the shining star of their company has been the Velocity division which saw earnings (before interest and tax) up 12 per cent to $122.2 million.

Personally I think this is a smart move by Virgin which in the end after a initial financial hit see the company not only in a stronger position financially but increase value with its customers for years to come!

Qantas eyes off Haneda flight expansion

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It’s been reported that Qantas is considering adding new flights to Tokyo’s Haneda Airport after released two new airport slot pairs to Australian airlines.

The recent expansion of Haneda Airport has created four new daytime slots for flights to and from Australia. Two of these slot pairs have already been allocated to ANA and Japan Airlines, with two remaining and available for Australian airline use.

Bids for the landing and takeoff slots at Haneda Airport slot will close 31 October 2019 and become available for use from 29 March 2020. It’s expected Qantas will take up the slots as Jetstar’s Tokyo hub is based out of Narita and Virgin is currently in a state of reassessing its entire network.

Qantas currently flies the Boeing 747 daily from Sydney to Haneda Airport. If the airline were to take up these slots it would empower their business and leisure travellers with greater options in terms of landing and departures

Additional Haneda Airport slots would be a win for any Australian airline as its closer proximity and transport options to Tokyo makes it the preferred choice for business travellers.

Time will tell if Qantas takes flight with the new Tokyo Haneda options. Considering Haneda slots are as rare as hens teeth Qantas would be foolish to pass this unique opportunity up.

Virgin set to experience turbulence following recent net loss

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Virgin Australia has announced this week a program to cut 750 head office and corporate roles after posting a $349 million full-year loss. The result is a surprising drop for Virgin following their slender thing profit of $64 million the previous year. The plan to slash jobs is estimated to save the airline $75 million annually in costs. The cuts would impact seven per cent of Virgins current workforce.

On top of labour costs Virgin has advised it would be making an urgent assessment of all its current routes and capacities to see where further savings can be made. It’s expected there will be a strong focus around leisure routes. The move would ensure better route profitability for the airline.  Virgin has also decided it would hit pause on fleet renewal until July 2021.

The recent loss has not made new VA CEO Paul Scurrah’s life any easier since he landed into the tough job following the departure of John Borghetti. The new CEO pointed to tough trading conditions as well as rising fuel and the lower Australian dollar.

The news follows rival Qantas posting earlier this month a 6.5 per cent fall in annual net profit. Like Virgin they attributed the loss to higher oil prices and a weaker foreign exchange.

 

 

VIRGIN OFFERS FIRST DOUBLE STATUS PROMOTION FOR 2019

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Fancy a double status promotion?! I certainly do and it looks like the first of the big Australian airlines has taken fire in the first round of DSC promos for 2019. Today Virgin cheekily released a teaser on their social page with the statement “In two days, we’re going to help you soar twice as fast. Watch this space (and your inbox!)”.

Whilst the offer is not yet active, what is known about the upcoming double status promotion is that if you register and book between 1 February to 12 February 2019, you will receive double Velocity status credits when you travel on any Virgin Australia marketed and operated flight before 28 December 2019

These promotions are a great way for those who are always falling shy of the next tier to get over the line. It’s anticipated that Qantas will soon be releasing the first of their double status credit promotions in February/ March but it looks like Virgin has beaten them to the punch. Well played Virgin, well played!

Comments

Will you be taking advantage of the Velocity DSC promotion? Keen to hear your thoughts.

Virgin Australia priority boarding announcement for veterans backfires

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After announcing via Twitter they’d be offering priority boarding to veterans in Australia, Virgin Australia has partially backflipped on their decision after strong public backlash. The airline has stated that “over the coming months, we will consult with community groups and our own team members who have served in defence to determine the best way forward. If this process determines that public acknowledgement of their service through optional priority boarding or any announcement is not appropriate, then we will certainly be respectful of that.”

The Virgin Australia announcement was an odd one to begin with. Perhaps they thought the gesture would earn them some good PR but then again Virgin needs to better understand its customer base, and it isn’t America. Having flown internally within the USA many times I find the gesture a little cringeworthy, if not smacks of commercialism. How can we put a price on death and war? Every ANZAC day commercial businesses are criticised if they utilise the dya for profit, so why is it any different here? Moreover if Virgin had done its research it would know that Australian veterans and our service men and women do not seek attention. Australians are more respectful and do not act patriotically around war like America. Whatever the  case Virgin has dug itself in a deep hole and it is dangerous for an airline already on its knees.

What saddens me is that the announcement was done as part of a campaign by NewsCorp, the same lovely folk who brought you the campaign to fire Malcolm Turnbull,. NewsCorp don’t care about people, they care about their agenda and in this case are probably trying to cover their tracks from recent blunders. The organisation’s intent is tokenism at its worst and Virgin sadly fell into its trap.

Here’s hoping Virgin Australia learn from this tough lesson and consult before making surprise announcements.

 

Should Australia be going down the path of the USA and recognise veterans at the airport/ on the plane? Keen to hear your thoughts.

 

Virgin to launch Newcastle – Auckland flights

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Virgin Australia has had a bit of a rough trot of ate with the New Zealand market after one time ally Air New Zealand decided to bin their partnership and get into bed with rival Qantas. The move left Virgin in shock and probably a little ill prepared in terms of a response. Now Virgin has found a trick up its sleeve by announcing this week it would commence flights from Newcastle to Auckland from November this year.

The new seasonal route which will tap into summer passenger demand will feature a Boeing 737 with eight business class seats, 30 Economy X seats and 138 standard economy seats. The flights will run every Tuesday, Thursday and Sunday from 22 November 2018 to 17 February 2019.

Departing from Newcastle Airport at 7.30pm on Tuesday, Thursday and Sunday is VA199, which will reach Auckland at 12.25am the following day. VA198 will depart Auckland at 5.10pm and arrive into Newcastle at 6.45pm.

The news from Virgin comes on top of the airlines recent announcements that it was launching new routes between Sydney and Wellington and between Melbourne and Queenstown from October this year.

It’ll be interesting to see the demand for these new routes and whether the investment was worth it considering no other airline is flying a direct Newcastle – NZ option. Like all ambitious ideas time will tell if the gamble was a success.

What do you think of Virgin’s lastest routes to NZ? Will you be using the new Newcastle – Auckland route?