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Mar22
Virgin Blue Coming to a Los Angeles Airport Near You

Qantas Airways will be facing more competition on their most profitable international route.  Qantas, which receives nearly 20 percent of their international revenue from their Sydney-Los Angeles route, will be facing a new competitor even maybe two new competitors. 

Virgin Blue has placed an order with Boeing for seven 777ER planes valued at $2.6 billion (AU). Virgin Blue chief executive Brett Godfrey said the seven-aircraft deal was the biggest undertaking the airline had taken and "a huge risk".

Virgin Blue has been refining their services in Australia.  They no longer fit the low cost carrier model.  Virgin Blue has been molding themselves into a more business airline all while keeping costs relatively under control and keeping the airline young and fresh.    

 

Mr Godfrey said Virgin needed to have at least daily services to the US, but was pushing for 10 flights a week.

He said Virgin was concentrating on the US market, and not yet looking at extending the new airline's reach to London or the Middle East. Mr Vaile said a second carrier on the Pacific needed to be profitable, not just sustainable, and if Virgin did well the Government would look at whether it could have other routes to other parts of the world.

But another US airline is eyeing the key Sydney-Los Angeles route.  Delta Air Lines said they would be interesting in the route.  Something that could be interesting giving the fact that Qantas will be using their new A380's, Virgin Blue will be using their new 777's, United Airlines using their 747's, and even Delta looking at using 777's on the route.  

The Australian 

 


5 Comments/Trackbacks




While Delta has stated they have an interest in Sydney, I don't recall them saying that Sydney-Los Angeles was the particular route of interest. If you have a link or source that states otherwise, I'd very much love to see that.

While I believe a SYD-LAX would be more a stellar performer, it's widely rumored that a banked SYD-HNL could be a possibility due to the lower opportunity cost of the 763ER or 764ER.

Delta probably won't fly the LAX-SYD route, it was just a personal opinion I threw out there as a possible route, but the HNL route could be a strong possibility. I just don't see them using their Salt Lake City hub for the route. Though other airlines operated on the route and had to stop in HNL and they eventually pulled out of the route. A SEA, SFO, or LAX to Sydney only seems like a likely choice. Especially after Jetstar has started their HNL-SYD runs.

My Personal Insight on a Potential DL LAX-SYD

The interesting thing about Los Angeles however is that while LAX-SYD is adequately served overall, LAX-SYD and CONUS-SYD is drastically underserved by SkyTeam carriers. While I'm just throwing this figure out there, SkyTeam might have at least 33% of the US's capacity (between DL, CO, NW), but has 0% OZ capacity. Granted its primary cities are less filled with traffic to Sydney than UA or AA's LAX or SFO ops, but their key cities and entire US FF system (and Delta's still considerable base along with NW and CO in LAX) have abundant flights to Los Angeles and could easily fill a 777 to SYD with good connections, profitably.

Regardless of the product (LieFlat BE or Reg 777BE), SkyTeam business traffic and premium ST FF travelers will at least pay market price and front cabin premiums so they can earn their miles and status. UA makes money and has a totally marginal J-product.

If you look at the current Delta operation at LAX, it has an arrival bank around 9pm for a lot of transcons and the regional operations. Assuming they'd originate the 777 in ATL, they could send it down to SYD at 10:45pm from LAX for ARR at SYD 6:30am 2 days ltr. They could depart it from SYD at 12:30pm for ARR at LAX at about 9:30am, which would connect to a large wave of departing transcons (JFK, ATL, BOS, MCO, MSY, TPA, CO, NW, etc), SLC, and DL would likely time connections to at least SFO and LAS.

I'd think Delta's new strategy is not to compromise the integrity of its route system by starting marginal shaky trial routes like HNL-SYD. Moving forward, I think they're going to work to diversify their gateways for Intl growth in cities where they have the base and the facilities to succeed (ala LAX, BOS, FLL, etc). As someone whose not alone in hating flying through Korea to earn my miles and status (and I'm not alone), I think Delta is starting to realize the power they can harness through alliance traffic and the ability to leverage their growing LAX operation.

I enjoy reading your column daily, by the way.

Thanks. I always like to read about others opinions, especially when they know more than me about the specifics on a particular subject.

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