Virgin Blue plans for Pacific route

[Lindsay Wilson]

Virgin Blue is stepping up its push to break into the lucrative Pacific route with the formation this month of a high-level 10-member team to test the airline's chosen business model...

Virgin Blue is stepping up its push to break into the lucrative Pacific route with the formation this month of a high-level 10-member team to test the airline's chosen business model.

One issue the team is examining is the possibility of the airline landing somewhere other than the existing major ports for flights from Australia.

Virgin Blue CEO Brett Godfrey told The Age last night the airline had already solicited interest from some airports "outside the traditional mainstream of Los Angeles and San Francisco and we will be talking to others".

Using alternative airports could reduce costs. Communities looking for economic stimulation could offer attractive deals, the benefits of which could be passed on to Virgin Blue customers.

The seriousness of Virgin Blue's efforts is shown by its external recruiting of senior executives to spearhead the Trans-Pacific Project Team.

Rod Nelson, a former CEO of Air Niugini and also of Hazelton Airlines, is leading the group, reporting directly to Mr Godfrey, for whom the Pacific enterprise is a pet project.

Rod Mahoney, an expert in aircraft selection, has come directly from Airbus Industrie, where he headed its representation in the Asia-Pacific region. Gordon McKenzie, formerly with Virgin Atlantic and Virgin America, brings international airline experience to the domestic carrier. Also on the team is Tony Wheelens, a former senior negotiator for the Government on airline agreements, who will be working on the vital issue of access to enough flights to make the route viable for Virgin Blue.

Virgin Blue needs approval from the United States Government to fly at least a daily service to have the critical mass to start up. It would eventually need to fly between 14 and 21 services a week, which would include a service from Melbourne.

Current arrangements for new Australian entrants to the US market would only permit four services a week. The Australian Government has already started talks in Washington to increase Australian access, and Virgin Blue is fairly confident it can get enough flights.

The airline's representatives are preparing to be back in Canberra next month to brief ministers and senior officials on their progress. They tested the water with ministers late last year.

Cabinet would almost certainly be sympathetic to a Virgin Blue bid to fly the route. Earlier this year, the Government rejected Singapore Airlines' application to do so.

With the recent Toll takeover of Patrick Corporation, Virgin Blue will be controlled by Toll. Toll chief Paul Little has said it will take up to 18 months to decide the future of Patrick's 62 per cent holding in the airline.

Mr Godfrey said the ownership change "shouldn't make a difference" to the plans for the Pacific route "provided we could substantiate the final business plan to the full board".

The sale of Virgin Blue to foreign interests would cloud the future of its Pacific aspirations, as the rights to fly the Pacific rest predominantly with Australian and US-owned airlines.

The Virgin Blue Pacific route team is examining models of service, including having single- or two-class flights.

The team's project will take several months. Virgin Blue has previously said it would take two years from February this year before it could be set to fly the route. But it is likely to come under Government pressure to start earlier.

[Yada Yada]

Lindsay - thanks for posting the info. This is an interesting development and it sounds like they are quite serious about the possibility. I will be waiting for more news with interest.

[oldbold]

With Qantas only operating five flights a week to San Francisco, and United daily, and with Virgin America based there, perhaps we might expect V Australia to commence its service from Australia there, where the terminal and connection favilities are so much better than at LAX. Qantas will be introducing 380s on the Los Angeles route around the end of 2008, collecting much publicity.
I'd also expect the newcomer to offer the same range of classes that Virgin Atlantic does, namely Business, Premium Economy and regular Economy, instead of Qantas' four classes.

[simongr]

Isnt this the route that we were expecting V Australia to fly?

[pauly7]

With Qantas only operating five flights a week to San Francisco, and United daily, and with Virgin America based there, perhaps we might expect V Australia to commence its service from Australia there, where the terminal and connection favilities are so much better than at LAX. Qantas will be introducing 380s on the Los Angeles route around the end of 2008, collecting much publicity.
I'd also expect the newcomer to offer the same range of classes that Virgin Atlantic does, namely Business, Premium Economy and regular Economy, instead of Qantas' four classes.

QF was on Lateline a while back talking about alternative US routes for them once the 787's start rolling in, which will be exciting.

Obviously AA's hub in Dallas-Fort Worth is high on their wish list.

All depends on the governments sorting out the air agreement though. Don't forget that Australian carriers are currently capped at 80% of traffic - QF is roughly at 77% so literally cannot increase capacity even if they wanted to (unless United do as well to ensure the pie stays the same.) It is a point often missed by people when discussing this topic. Hopefully we will see a complete removal of this so both QF and DJ are allowed to expand at will.

Hopefully crazydave reads this thread, I was wondering about the selection of 777's... Did DJ pick up the last of these being produced from Boeing this year? Because alot of airlines have gone on record complaining that Boeing isn't even making them again until 09-10 because they are focussing on the 787 which as we know is their big bet.

Just interested if DJ is getting them from Boeing or leasing them from another source... I know leasing companies have few floating around...

Cheers

[stuartfaz]

Just interested if DJ is getting them from Boeing or leasing them from another source... I know leasing companies have few floating around...

Cheers

I'm no crazydave but I believe that, of the seven DJ are getting for VAA, six are new from Boeing, and one is being leased from ILFC.

I'm not sure if this has changed since it was first announced.

[Evan]

I'm no crazydave but I believe that, of the seven DJ are getting for VAA, six are new from Boeing, and one is being leased from ILFC.

I'm not sure if this has changed since it was first announced.

May be changing given the below...

Rod Mahoney, an expert in aircraft selection, has come directly from Airbus Industrie, where he headed its representation in the Asia-Pacific region.

Why would airlines complain, they either had production slots reserved as firm orders or they did not i guess, I would not have imagines Boeing would have told them to go stick you order we are not going to make your plane as planned, but then again desperate times with the 787 at the moment i think.

E

[stuartfaz]

May be changing given the below...

Rod Mahoney, an expert in aircraft selection, has come directly from Airbus Industrie, where he headed its representation in the Asia-Pacific region.

Why would airlines complain, they either had production slots reserved as firm orders or they did not i guess, I would not have imagines Boeing would have told them to go stick you order we are not going to make your plane as planned, but then again desperate times with the 787 at the moment i think.

E

Evan,
That post from Lindsay Wilson is from April 2006.

DJ hasn't released anything regarding a change of fleet. AFAIK they're still going with the 777-300ER's

[Evan]

Opps, who is bringing old post's to life ?
777-200/300, seem a popular AC for people moving. I don't mind them but generally i do prefer the A330's the way most airlines have them configured.
E

[NM]

Because alot of airlines have gone on record complaining that Boeing isn't even making them again until 09-10 because they are focussing on the 787 which as we know is their big bet.

It is my understanding that the complaints are that Boeing is not developing new variants of the 777 at the moment as they are focusing on the 787 development. There is no slowing of the production line for current models. Some airlines (most vocally EK) would like Boeing to develop an enhanced 777 using some of the technology of the 787, but so fare Boeing has said they do not have plans for such an enhanced 777. Boeing has also been reluctant to launch the 787-10 as it could be seen as competing with the current 777 line (in size and range) and they don't want to slow the sales of the current 777 models.