waldova wrote:jan_olieslagers wrote:waldova wrote:I don't understand why Virgin is investing in this winglets. I truly believe they should start investing in renewing their fleet instead of keeping the planes.
I'm afraid for you the Virgin management know what they are doing. Either they have more info than you, or stronger brains. You surely don't believe they decided this on a Monday morning without any thinking?
I know that the Virgin management is not really a management to say 'wow' too! Come on. Every year they make debts and then they decide to make their fleet smaller. Do you really think that that is the solution? I think that that just makes it worse. So you tell me if this management is as competend as you say. Also about the winglets. Ok I'm sure they thought it trought but did they really think that far ahead? They should start changing their image to a much younger company with much younger planes. Maybe these planes are an investment now but it will be well worth it. You will get new and more costumers if they have nicer and newer planes. Also the cost will go down a lot, especially the fuel price and the operating cost per passenger/mile. I really believe this is not the solution at all.
Virgin Express decreased their fleet without making the network smaller. So that
is a cost reducing measure. This should result in better financial figures. It is remarkable that you doubt about that as the earnings will be at the same level while they've reduced costs.
What you suggest is just to buy new planes, this will not result in higher sales and such a measure doesn't change your cost structure. The result could even be worser as they would have to buy new planes, which means that their expenses would be rising (new planes do cost a lot of money).
So what does that change to your cost structure? not much if you ask me, new planes are more fuel efficient, but the leasing cost will be higher, so where will the benefit come from
Whey you talk about investments you should look at the TCO (Total Cost of Ownership) This means that you should see the whole picture, as that is the only real answer to this question. One particular benefit doesn't make sense for strategic measures.
waldova wrote:jan_olieslagers wrote:waldova wrote:But if they put winglets it means that they plan on keeping those 737 for a long time to come. I think at least they should also change then the interior of their fleet as this for the moment looks quite old fashioned and old.
Yes agreed they'll wish to make the investment worth its money - but mind you that might also be reflected in a higher sales price. Still, as someone else said, the B737's are far more numerous in the combinad SN/VX fleet than A319's so more likely to stay.
As for the interior: I'm afraid this point is less important to the management than fuel economy... maybe some day when budgets allow...
I don't see how this will reflect in the higher sales price. Why comes that companys as Ryanair and other LCC have still low prices, a lot lower then Virgin, while they have all new kind of planes? Because if you tell me know that you trully believe that Virgis has low prices then suggest taking a look at the Virgin website. Do you see what they charge even as taxes? These taxes are much higher then any other LCC in Europe.
And for the moment Virgin is loosing a lot of money because the passengers think their interior looks old. So in my opinion this would not be such a dumm investment. It will attract more costumers and because of that maybe higher profites.
Also about the fleet harmonisations with SN. If these two companys are part of one holding, namely SN Air Holding, I think they should think about harmonisation. Also I think that then Virgin should change their fleet to airbus. Airbus is namely trying to make all their planes, A32X, A330 and A340 one type rating. So it would be in the interest of SNBA to keep the Airbus fleet they have and if they want to be more flexible between the two companys I think they should think about fleet harmonization and I think Virgin should start investing in renewing their Boeings in Airbusses. Otherwise I think that the way Virgin is doing now their will be not much left over of Virgin Express in 10 years because a company that keeps losing money will not have the money at the end to change their fleet. They should do it now!
You seem to forget that Ryanair was operating the B732 for a long time, planes which were even older than the oldest B733 which is flying for VEX. And still Ryanair was able to grow. According to you, they should have been bankrupt because of flying old airplanes.
Do you really think that their profits will rise just by having new aircrafts?? The planes Virgin has right know, can still fly for at least 10 years to come.
I don't believe that passengers know a lot about the age of a plane. And old doesn't even mean unsafe
If passengers really now which airline is flying old airplanes and which not, how come there are still people flying onboard of OO-TUC with Jetair. Only aviation freaks like we know those things, not the regular passengers.
Concerning the price of a ticket: the mission of Virgin Express is to satisfy the client (
passengers) onboard by flying them from A to B and to have an economical viable enterprise. It is not of VEX interest to fly the pax as cheapest as possible, being an LCC is only an image of the company. If VEX is able to sell the seats it doesn't matter how high the price is. Offcourse people are happy when the price is low, but that is not always a reason of existence for an airline. As an airline you always try to charge as much as you can and it seems like that they still sell enough seats. So for VEX this is not at all a problem.
We still have to wait for the future strategic plans of SNBA and VEX. Just changing to Airbus, because SNBA has them is not at all a reason to buy new planes for VEX.
I have no idea if Virgin will be around in 10 years, but not airline can look into the future. So even Vueling or Iberia cannot give you a positive answer.
waldova wrote:Maybe the management knows what they are doing but the fact is that Virgin is losing money for the moment. Even though they have good load factors on their flights they are still losing money. And as this happens they start decreasing their fleet size what in my opinion is not the solution to this problem, this only makes it worse. So I think something has to change drastically for Virgin otherwise they will really not exist anymore in ten years.
You are mixing up things here, the financial results we know is about the financial year 2004. Which means you have not at all an idea how Virgin is performing today. So saying that Virgin is losing money today, can not be true, as you don't know. Management decision are taken in the present and you can't use here the financial results of a year ago as that doesn't tell you anything about the situation like it is today.
I said it before, but reducing a fleet is reducing costs, buying a new fleet will be drastic, but that doesn't imply you have a better cost structure. Otherwise every company with a new fleet could make money according you, how come even start-up's can fail
FlightSimCrew wrote:Just look at the difference between VLC and BRU from Brussels. Vueling is doing quite well on VLC with good loads.. and are possible profitable because they ask high yields... ON BCN they barely hit 50% load and what do they do... launch 10€ fares in the hope to get some pax and hit the competition.. what do you think their prices will be when they get the monopoly on that market ?
Well that is competition and you'll have to be strong to survive.
Vueling will never have a monopoly on that route, as that would invite a challenger to start operating the route.
OO-VEX
fftopic: 
