Virgin Usa/ Us Airways?
- Thread starter Jon153
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USA320Pilot
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Sunday morning the Los Angeles Times published an article titled "Branson May Base Airline in L.A." The Times said, "Richard Branson, the flamboyant British billionaire who founded Virgin Atlantic Airways, is thinking of making Los Angeles the headquarters for an airline he wants to launch in the U.S. Branson, an aviation buff who flies hot-air balloons, has discussed the idea with California Gov. Arnold Schwarzenegger."
Branson says he is talking to a major U.S. carrier about purchasing a "significant" number of its gates. He declined to name the carrier, but some analysts believe it is US Airways, which wants to shed some of its slots. An agreement with the airline could be reached as early as next week, Branson said, the Los Angeles Times reported.
Then early Monday morning the London Times reported "The Virgin chief is thought to be only a week away from unveiling an agreement with an American partner airline, which many believe will be US Airways."
Chip comments: The information reported could be good news. US Airways needs to reduce costs and increase utilization of existing facilities, which sources have said could be part of the "Transformation Plan" to lower unit costs below 9 cents.
Reports indicate US Airways could sell some gates to Virgin USA to further lower its costs and some airports being mentioned by the Times are Boston, Philadelphia, San Francisco, Los Angeles, and Miami. The intent could be to obtain capital, increase utilization of existing facilities, and to permit further integration with United.
For example, US Airways is scheduled to take over some of United's Los Angeles gates and move from terminal one to terminal seven in January. Thus, could US Airways sell its Los Angeles terminal one gates to Virgin USA to lower unit costs and obtain additional capital?
Furthermore, could this move help United lower its unit costs and reach an acceptable settlement in the pending municipal bond litigation between the Los Angeles Airport Authority and the Chicago-based airline?
As employees we should not really care about the number of gates and in fact I want US Airways to have as few gates as possible coupled with the greatest number of profitable block hours. Why pay for things you do not need and the Virgin USA gate sale could increase facility utilization, which would incrementally drive down unit costs.
Meanwhile, today the Pittsburgh Tribune Review reported in an article titled "Regional jets quietly approach launch" that focused on MDA that "Negotiations between US Airways and Pennsylvania government officials over reducing the (Pittsburgh) airport's debt are on hold for now." Could the Virgin USA news and United's inability to obtain exit financing continue to be holding the Pittsburgh airport negotiations hostage?
Regards,
Chip
Branson says he is talking to a major U.S. carrier about purchasing a "significant" number of its gates. He declined to name the carrier, but some analysts believe it is US Airways, which wants to shed some of its slots. An agreement with the airline could be reached as early as next week, Branson said, the Los Angeles Times reported.
Then early Monday morning the London Times reported "The Virgin chief is thought to be only a week away from unveiling an agreement with an American partner airline, which many believe will be US Airways."
Chip comments: The information reported could be good news. US Airways needs to reduce costs and increase utilization of existing facilities, which sources have said could be part of the "Transformation Plan" to lower unit costs below 9 cents.
Reports indicate US Airways could sell some gates to Virgin USA to further lower its costs and some airports being mentioned by the Times are Boston, Philadelphia, San Francisco, Los Angeles, and Miami. The intent could be to obtain capital, increase utilization of existing facilities, and to permit further integration with United.
For example, US Airways is scheduled to take over some of United's Los Angeles gates and move from terminal one to terminal seven in January. Thus, could US Airways sell its Los Angeles terminal one gates to Virgin USA to lower unit costs and obtain additional capital?
Furthermore, could this move help United lower its unit costs and reach an acceptable settlement in the pending municipal bond litigation between the Los Angeles Airport Authority and the Chicago-based airline?
As employees we should not really care about the number of gates and in fact I want US Airways to have as few gates as possible coupled with the greatest number of profitable block hours. Why pay for things you do not need and the Virgin USA gate sale could increase facility utilization, which would incrementally drive down unit costs.
Meanwhile, today the Pittsburgh Tribune Review reported in an article titled "Regional jets quietly approach launch" that focused on MDA that "Negotiations between US Airways and Pennsylvania government officials over reducing the (Pittsburgh) airport's debt are on hold for now." Could the Virgin USA news and United's inability to obtain exit financing continue to be holding the Pittsburgh airport negotiations hostage?
Regards,
Chip
CynicalResAgent
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I thought Terminal One in SFO was slated to be demolished pretty soon. We operate all of the gates in that concourse. I had heard we would be moving into UAs concourse which would make sense. Not to mention that it is much brighter and nicer. Has anyone heard if that is true?Chip Munn said:
USA320Pilot
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PitBull:
If US Airways implements a rolling hub flights would be spread out. For example, let's say for discussion purposes the company has 90 flights land in PHL from 9:00 to 10:00 a.m. and then another 90 flights depart from 10:00 to 11:00 a.m.
That's a total of 180 flights in a bank. Then the PHL ground personnel go to the break room and some flight crews hang out in Ops and are unproductive.
However, with a rolling hub the company could schedule 60 flights from 8:30 a.m. to 9:30 a.m., then another 60 flights from 9:30 to 10:30 a.m., and then another 60 flights from 10:30 a.m. to 11:30 a.m.
The hub bank and rolling hub operation has 180 flights, but the rolling hub significantly improves flight operations, reduces PHL congestion/delays, and improves ground and flight crew productivity. This would allow US Airways to fly more block hours with better utilization of the same number human, aircraft, and facility assets, to lower unit costs.
In regard to gates, if you have 60 instead of 90 flights you have less aircraft on the ground at the same time, thus you need less gates. By selling some of the gates you no longer need due to the rolling hub, you obtain capital and lower your fixed gate expense, further reducing costs.
As to the thought of not to permitting another low cost airline in, I do not think that's going to matter. The LCC expansion is so enormous that mature network airlines are going to have to compete on cost, thus more LCC's are not going to really matter because the low cost operators will have more than 50% of the domestic market.
Meanwhile, it only makes sense whether it's a code share or merger integration for US Airways to take control of some of United's gates. United is reducing its fleet size, is still furloughing employees (but this should stop in the not-so-distant future), and can unilaterally reject gates through the bankruptcy process.
Therefore, like in SEA and LAX, US Airways could sell some of its gates and take over a similar number of United gates, which could lower the unit costs of each airline while simultaneously providing a better passenger experience for the code share passenger.
Regards,
Chip
If US Airways implements a rolling hub flights would be spread out. For example, let's say for discussion purposes the company has 90 flights land in PHL from 9:00 to 10:00 a.m. and then another 90 flights depart from 10:00 to 11:00 a.m.
That's a total of 180 flights in a bank. Then the PHL ground personnel go to the break room and some flight crews hang out in Ops and are unproductive.
However, with a rolling hub the company could schedule 60 flights from 8:30 a.m. to 9:30 a.m., then another 60 flights from 9:30 to 10:30 a.m., and then another 60 flights from 10:30 a.m. to 11:30 a.m.
The hub bank and rolling hub operation has 180 flights, but the rolling hub significantly improves flight operations, reduces PHL congestion/delays, and improves ground and flight crew productivity. This would allow US Airways to fly more block hours with better utilization of the same number human, aircraft, and facility assets, to lower unit costs.
In regard to gates, if you have 60 instead of 90 flights you have less aircraft on the ground at the same time, thus you need less gates. By selling some of the gates you no longer need due to the rolling hub, you obtain capital and lower your fixed gate expense, further reducing costs.
As to the thought of not to permitting another low cost airline in, I do not think that's going to matter. The LCC expansion is so enormous that mature network airlines are going to have to compete on cost, thus more LCC's are not going to really matter because the low cost operators will have more than 50% of the domestic market.
Meanwhile, it only makes sense whether it's a code share or merger integration for US Airways to take control of some of United's gates. United is reducing its fleet size, is still furloughing employees (but this should stop in the not-so-distant future), and can unilaterally reject gates through the bankruptcy process.
Therefore, like in SEA and LAX, US Airways could sell some of its gates and take over a similar number of United gates, which could lower the unit costs of each airline while simultaneously providing a better passenger experience for the code share passenger.
Regards,
Chip
diverboy
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Southwest is pretty much driving US Airways out of Terminal 1 at LAX..
Rumor is that Southwest is even paying for bag belt renovations in Terminal 6 for US Airways to get them out.
Rumor is that Southwest is even paying for bag belt renovations in Terminal 6 for US Airways to get them out.
USA320Pilot
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Blow for Branson's US lowcost airline
Graeme Beaton in New York, Mail on Sunday
30 November 2003
PLANS by Virgin Atlantic chairman Sir Richard Branson to launch a discount airline in America have been dealt a serious blow by Congress.
It has defied a call from President Bush and Europe to loosen restrictions on foreign ownership of US airlines. Under legislation approved last week, this will continue to be restricted to 25%.
Despite the setback, Branson vowed this weekend to press ahead with his lowcost venture, though the original launch timing of early next year appears to be slipping.
In another blow for the Virgin boss, Congress also amended regulations to make it even more difficult for non-Americans such as Branson to exercise control over US carriers.
He had hoped the US would raise the limits on voting rights to 49%. Now he may seek a deal with a US airline in which he would own a 49% stake but have control over only a quarter of the voting rights.
The moves by Congress, which followed action to impose tariffs on foreign goods amid a continuing row over America's ban on some foreign steel imports, are seen as another irritant to transatlantic-relations. 'Congress went in exactly the wrong direction,' said a Washington transport lawyer, who represents foreign airlines.
'Bush wanted Congress to lower the barriers to foreign ownership and it raised them. This was silly, coming as it does just before talks on an agreement on a transatlantic air pact.'
Congress's action came just days after Branson toured Philadelphia airport to judge if it was suitable as a base for his discount airline.
However, a source in the US Transportation Department said Branson had not formally applied for approval to establish an airline.
'I would think he was awaiting clarification on how much of the operation he could own and this would not have been what he was hoping to hear,' he said.
Anglo-American talks are bogged down at present.
The sticking points are over calls for the US to lift ownership restrictions and open its air space to foreign airlines and for the British Government to allocate more landing and take-off slots to US carriers at Heathrow.
Among reasons cited by Congressmen for blocking increased foreign ownership has been national security and the fear that a foreign-controlled airline might not follow US foreign policy in a crisis.
Trade experts fear that protectionism pressures will grow in the run-up to next November's Presidential and Congressional elections.
Will Whitehorn, Branson's spokesman, said: 'These are unfortunate setbacks, though we were expecting them. Nevertheless-we will be going ahead with the launch of the new airline in the US in the summer.'
The US market already has two low-cost carriers - Southwest Airlines and JetBlue - but Branson insists that there is room for a third player.
The airline will be modelled on Virgin Blue, his successful Australian joint venture, which is due to float as a public company next month in Sydney. Its stock market value will be up to £1 billion.
Some of the estimated £100 million Branson will raise from the deal will be used to fund his US-based budget carrier.
Graeme Beaton in New York, Mail on Sunday
30 November 2003
PLANS by Virgin Atlantic chairman Sir Richard Branson to launch a discount airline in America have been dealt a serious blow by Congress.
It has defied a call from President Bush and Europe to loosen restrictions on foreign ownership of US airlines. Under legislation approved last week, this will continue to be restricted to 25%.
Despite the setback, Branson vowed this weekend to press ahead with his lowcost venture, though the original launch timing of early next year appears to be slipping.
In another blow for the Virgin boss, Congress also amended regulations to make it even more difficult for non-Americans such as Branson to exercise control over US carriers.
He had hoped the US would raise the limits on voting rights to 49%. Now he may seek a deal with a US airline in which he would own a 49% stake but have control over only a quarter of the voting rights.
The moves by Congress, which followed action to impose tariffs on foreign goods amid a continuing row over America's ban on some foreign steel imports, are seen as another irritant to transatlantic-relations. 'Congress went in exactly the wrong direction,' said a Washington transport lawyer, who represents foreign airlines.
'Bush wanted Congress to lower the barriers to foreign ownership and it raised them. This was silly, coming as it does just before talks on an agreement on a transatlantic air pact.'
Congress's action came just days after Branson toured Philadelphia airport to judge if it was suitable as a base for his discount airline.
However, a source in the US Transportation Department said Branson had not formally applied for approval to establish an airline.
'I would think he was awaiting clarification on how much of the operation he could own and this would not have been what he was hoping to hear,' he said.
Anglo-American talks are bogged down at present.
The sticking points are over calls for the US to lift ownership restrictions and open its air space to foreign airlines and for the British Government to allocate more landing and take-off slots to US carriers at Heathrow.
Among reasons cited by Congressmen for blocking increased foreign ownership has been national security and the fear that a foreign-controlled airline might not follow US foreign policy in a crisis.
Trade experts fear that protectionism pressures will grow in the run-up to next November's Presidential and Congressional elections.
Will Whitehorn, Branson's spokesman, said: 'These are unfortunate setbacks, though we were expecting them. Nevertheless-we will be going ahead with the launch of the new airline in the US in the summer.'
The US market already has two low-cost carriers - Southwest Airlines and JetBlue - but Branson insists that there is room for a third player.
The airline will be modelled on Virgin Blue, his successful Australian joint venture, which is due to float as a public company next month in Sydney. Its stock market value will be up to £1 billion.
Some of the estimated £100 million Branson will raise from the deal will be used to fund his US-based budget carrier.
michael707767
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I agree with the congress on this one. Further, strictly from an economic standpoint, a foreign owned airline will most likely just come in and cherry pick the good routes. Virgin US will not serve the many small markets in this county. A new foreign owned airline may lower fares in the big markets, but once the major airlines in this county have been driven out of business, there will be no service to smaller markets, or if there is service, it will be very expensive.Chip Munn said:
Fatherknowsbest
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Chip,
You need to rethink your PHL rolling bank plan.
1) It calls for a 33% layoff for PHL employees (less gates mean less W-2's)
2) Sell extra gates to our competitors that we don't need (nuts!)
You need to rethink your PHL rolling bank plan.
1) It calls for a 33% layoff for PHL employees (less gates mean less W-2's)
2) Sell extra gates to our competitors that we don't need (nuts!)
PITbull
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Chip,
What I don't get is U stating there was "OVER CAPACITY', and then decreased capacity at a ferocious rate. Now, what your stating above is creating capacity AGAIN and hoping to fill the flights in between our regular flights, along with every other carrier. In my estimation, that means the "run ways" will have hundreds of more planes waiting in line to take off. Unless you fix the traffic problem, I don't know how this helps the cumstomer? I see it as putting them in a tube at desirable times for them; only to wait in line. And God forbid, there is a little "spit" on the runway in PHL. I'm talk'in deadlock city.
PHL is not the city to do this in my estimation. I think if you over utilize other airports and create a demand that you can follow through with (like taking off on time too) would be more advantageous to our bottom line, then chasing traffic in PHL. I believe SW is going to have a difficult time in PHL as well with this rolling situation. All we are accomplishing IMO is rolling right on into a hell of a long line of traffic on the tarmat.
But hey, whatever....
What I don't get is U stating there was "OVER CAPACITY', and then decreased capacity at a ferocious rate. Now, what your stating above is creating capacity AGAIN and hoping to fill the flights in between our regular flights, along with every other carrier. In my estimation, that means the "run ways" will have hundreds of more planes waiting in line to take off. Unless you fix the traffic problem, I don't know how this helps the cumstomer? I see it as putting them in a tube at desirable times for them; only to wait in line. And God forbid, there is a little "spit" on the runway in PHL. I'm talk'in deadlock city.
PHL is not the city to do this in my estimation. I think if you over utilize other airports and create a demand that you can follow through with (like taking off on time too) would be more advantageous to our bottom line, then chasing traffic in PHL. I believe SW is going to have a difficult time in PHL as well with this rolling situation. All we are accomplishing IMO is rolling right on into a hell of a long line of traffic on the tarmat.
But hey, whatever....
Bluestreak
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Chip,
Your post about the rolling hub was a great post. The rolling hub concept seems like a great way to increase employee productivity and better utilize airport facillities. There are times during the day when PHL looks like a ghost town and other times when we have to wait an hour for takeoff.
My only concern with this plan is passenger connection times. Since we will reduce the amount of flights going in and out of the hub during each bank, some of our passengers won't have a connecting flight during the bank they arrived in and they will have to wait untill the next bank for their connection. What's stopping this passenger from flying a different airline that will get them to their destination hours earlier for the same price?
Your post about the rolling hub was a great post. The rolling hub concept seems like a great way to increase employee productivity and better utilize airport facillities. There are times during the day when PHL looks like a ghost town and other times when we have to wait an hour for takeoff.
My only concern with this plan is passenger connection times. Since we will reduce the amount of flights going in and out of the hub during each bank, some of our passengers won't have a connecting flight during the bank they arrived in and they will have to wait untill the next bank for their connection. What's stopping this passenger from flying a different airline that will get them to their destination hours earlier for the same price?
PITbull
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What I thought the rolling -hub effect was about is that you would have your regular flights that would normally go out, then inbetween, stick RJs to fill in between with smaller jets, where by providing service virtually all the time, or q :30.
It is just difficult for me to conceptulize this being the "eurika" other than overutilization of personnel and gates. There are many other variables to consider specifically in PHL. Everything has to be pretty perfectly timed.
It is just difficult for me to conceptulize this being the "eurika" other than overutilization of personnel and gates. There are many other variables to consider specifically in PHL. Everything has to be pretty perfectly timed.
