For those of you who think that all Sir Richard Branson touches turns to gold, all you need to do is take a look at Virgin Nigeria to see a very different story. (Or study up on Virgin Express, but that’s for another time.)
The airline was started at a time when the Nigerian airline industry was in shambles, and there was plenty of oil money floating around. So, Sir Richard packed his bags and went down south to put together a new airline in his empire. Unfortunately for him, it has been far from easy sailing for the airline.
It seems that routes and aircraft types have floated in and out of the airline on a regular basis. It looked like their short haul strategy was finally settling down with the introduction of the Embraer jets, but their long haul flying was still a mess.
As of today, Virgin Nigeria has suspended all long haul flying, uh, temporarily, they say. That includes the routes to London and Johannesburg. Why did this happen? Well according to the airline, there’s too much new capacity and their tired product couldn’t compete. Why not just fix their product? Well, I’m guessing they don’t have the cash for it.
This means that the airline will return its two 767s to the lessor, but Virgin Nigeria apparently plans to be back in the market eventually, when they can get their act together.
How is it that Branson is willing to put up with this? Well, it appears that he has had less and less involvement in the airline. He has tried to sell his stake already, but nothing has come of it. The politics down in Nigeria must be frustrating him to no end.
For long haul passengers from Lagos, you can still fly Virgin Atlantic to London if you like the Virgin brand, or you can fly British Airways, Bellview, or Arik Air as well. South African appears to be the only airline that will fly you nonstop to Johannesburg.
Browsing Posts published in January, 2009
Looks like we’re seeing the beginnings of yet another failed attempt at using the EU-US open skies agreement to open new business opportunities. OpenSkies, British Airways’ attempt at launching an all-premium airline to fly to New York from Continental Europe, will keep running for now, but all future growth plans have been put to a halt.
Originally, OpenSkies was supposed to get a few more planes as BA’s 757 fleet was slowly pulled out of mainline service. Now, Financial Times is reporting that the remaining 11 of BA’s 757s will be sold. I’d bet those planes will go to a cargo carrier, though a BA spokesperson simply said that “British Airways is reviewing possible opportunities for the 11 Boeing 757 aircraft in the mainline fleet at Heathrow.” That leaves only the four airplanes currently flying for the airline (2 for OpenSkies and 2 under subsidiary L’Avion).
Sounds to me like BA has given up on this one. They’ll let them continue flying New York to Paris and Amsterdam or now, but if they see no future growth opportunities to the point where they’re selling all their other 757s, then this has to be living on borrowed time, I’d imagine. I suppose it’s not a surprise in this climate, but if they saw any hope for recovery, they wouldn’t sell off all those 757s.
It will be interesting to see what happens to the airlines super-premium economy class called Prem+. This class if far better than the World Traveller Plus that BA flies on its mainline aircraft, but it received rave reviews. I wonder if we’ll see Prem+ migrate to the mainline fleet at some point or whether it just didn’t make economic sense.
Once again, an attempted use of the open skies policy has failed. Maybe the ill-advised United/Aer Lingus plan will work, but somehow I would be surprised to see that one even get off the ground. I’ll be very curious to see when some airline is finally able to figure out how to profit off these new freedoms.
Report: Investors Looking to Abandon Virgin America
Financial Times is reporting that Virgin America’s US investors may be looking to bail out. What does this mean for the future viability of the airline?
American Flight Attendants Begin Aviation Safety Action Program (ASAP)
American’s flight attendants have agreed to improve safety with an ASAP, the very same program the pilots pulled out of. What gives?
2008 Full Year Traffic
A slightly belated look at full year 2008 traffic for US airlines.
Delta On-Time Performance Lags in November
November was a great month for most airlines, but Delta and a couple of its regionals landed at the bottom of the pack. What happened?
Hawaiian’s Mainland Flights Have a Rough November
Hawaiian’s overall numbers look good, but there were some big problems getting mainland flights in on-time.
United’s Ugly Fuel Hedges Impact Fourth Quarter Results
Fourth quarter results are starting to pour in, and United showed some serious cash losses due to hedging gone wrong.
LaHood is Confirmed; Opposes New York Slot Auctions, Supports Controllers
Ray LaHood is now going to be running the show at the DOT, and he’s been saying all the right things so far.
I’m going to go out on a limb and say that both United and Aer Lingus made a big mistake yesterday when they announced a joint
venture that I can best describe as goofy. But that’s about the closest I can get to saying something nice. More importantly, United has decided that yes, labor relations can (and apparently should) get worse. Aer Lingus not only agrees, but it also has proven that it has no clue what to do with its business. I actually worry that in the long run, this could be the end of United. So for that, they’ve certainly earned themselves the Cranky Jackass award. Let me explain.
First, let’s talk details. Aer Lingus and United will join forces to first fly Washington/Dulles to Madrid in summer of 2010 (that’s a lot of notice) and then fly elsewhere the following summer. All costs and revenues will be shared between the two on the joint venture routes. Aer Lingus will be responsible for actually flying the route with three A330s (1/3 of its existing long haul fleet, though 6 more A330s are coming in starting this year) that will have Aer Lingus branding on the outside and apparently both United and Aer Lingus branding on the inside. United will be in charge of actually filling the plane. It appears the crews will come from the US but won’t be United employees. I’m not entirely sure how that will be structured yet, but my guess is that it will be low cost, non-union labor.
Let’s look at the math for both airlines here, so we can understand why this is a disaster waiting to happen. United, you’re up first.
This route should be a United route all the way. It’s from the airline’s Washington/Dulles hub to a European spoke that has a limited Star Alliance presence. There are a couple ways to look at this. The innocent way is that United probably looked at Madrid and figured it either didn’t have enough planes to devote to the operation or it didn’t have the right number of seats on a plane to make the route work. My guess is that with Iberia already flying the route, it’s a marginal one at best. So here comes Aer Lingus to fly it for them in a better configuration and likely with lower costs (especially with new crews). Now United loyalists can fly to Madrid when they couldn’t before. Everyone’s happy. But there’s another way to look at it, and this is what scares me.
It’s entirely feasible in my mind that this could be a way to eventually drive out the pilots and flight attendants completely. It may sound far-fetched, but think about it for a minute. United has already been effective at giving smaller aircraft flying to regional carriers. For 2009, domestic mainline will be down at least 11.5%. On the other hand, Express flying will be up at least 8%. The pilots loosened up and allowed this when the airline was about to die a few years back, and I’m sure they now regret it tremendously since they’re seeing their jobs disappear.
Now United is effectively trying to do the same thing on the upper end of the scale with long haul, international flying. The airline has no new aircraft on order, so there’s no prospect for growth for several years out. Instead, United is looking to outsource its growth, and I could see this extending to the entire operation.
Now, if I were starting a new airline from scratch, I would seriously consider outsourcing my flying. (I’d keep my customer service folks employed, but that’s another discussion.) An existing airline, however, really doesn’t have that option, especially in a weak state. It’s not like United could just dismiss all their pilots and flight attendants one day and be up and running again the next. Think of it like a strike. An airline would have to go through some severe operational pain before it could get there, and an airline in United’s weak financial condition probably couldn’t weather a storm like it barely did in the summer of 2000.
All that matters here is what the unions think, even if it’s not the ultimate goal for management. If they see United’s end game as the end of all their jobs, they suddenly have nothing to lose. Do they worry about putting the company out of business by working to rule and hurting the operation? No, they don’t. Because if they think their jobs are gone anyway, they might as well bring down management with them.
We don’t know yet exactly how the unions will react, but we do not they aren’t happy. Take a look at the ALPA’s statement on the deal. Here’s a taste:
. . . This development, where United attempts to establish an airline operation without the use of United aircraft or employees, is nothing less than the outsourcing of jobs to an international company, and clearly demonstrates that this management continues to make business decisions without regard to its pilots and other employees.
The United pilots are exploring every option to put an end to the company’s blatant disregard and lack of loyalty to the United Airlines brand.
Flight attendants won’t be happy either here, of course. And I really do fear that this could be a major milestone for when we look back in 5 years. You may call me alarmist, but I’m looking way down the road and I don’t like what I see.
Now that’s look at Aer Lingus math.
Apparently, Aer Lingus has just run out of ideas. If you’re an airline with several widebodies on order, you’d think you’d have a good place to put them. But no, Aer Lingus has apparently decided that it has at least 3 airplanes that can do nothing better than fly some routes that it can’t market on its own. Not only that, but the airline has opted to try to staff the flights with employees from the US, so airline employees over there won’t benefit either.
I suppose when you have the Irish government behind you allowing you to make stupid decisions, then this doesn’t seem so bad. See, the Irish just turned down Ryanair’s bid to buy the airline again, so Aer Lingus can continue making dumb moves. I’m sure Ryanair could come up with far better uses for those widebodies than running them for United with somebody else’s employees. It’s hard to make Ryanair attractive to labor, but a stunt like this helps. I doubt we’ve seen the last of Ryanair’s chief Michael O’Leary on this one.
O’Leary, of course, loves it. And really, he should. He put out a press release today entitled, “Ryanair Congratulates Aer Lingus on Finding a Partner Which is Even Weaker and in Worse Shape Than Aer Lingus.” At least someone is happy about this whole thing.
I’m just afraid that this is a very short-sighted move that could have long lasting repercussions for everyone involved.
TripAdvisor put out the results of a study yesterday regarding airplane safety. I’m sure it was spurred by the US Airways accident last week, and I have to say that the results seem absolutely, completely wrong.
It may not be their fault – some people may want to say they’re safety-conscious after seeing an accident like we saw last week, but they must be lying.
Here are some of the findings:
30% say they always pay attention to the safety briefing and another 38% often do
Are you kidding me? There’s no way. Most people are reading magazines, squeezing in a last phone call, yelling at their children, or sleeping. I actually do pay attention every time (’cause I’m anal like that), and I rarely see anyone else watching unless the flight attendant happens to be hot.
Of those who don’t pay attention, 81% say it’s because they already know it
This is bull . . . oh wait, I believe this. I think most people who fly frequently do feel they know it by heart, so they don’t bother to pay attention. But even if you know it, this is a great opportunity to review. Different types of planes have different types of doors, so you should brush up on knowing which type you’ll need to use to run screaming from the plane. Also, it reminds you to check where your oxygen mask comes from, and it shows you how to put a seatbelt on. Tough one, I know.
50% have read the safety card
Um, ok. I’ll believe that 50% have read it at some point. But those cards are just so boring and hard to read that I think most people gloss over it. If only others took the approach that Sun Country takes. Something tells me that Ryanair has more luck since they post the card on the seatback in front of you so you can’t avoid it.
73% say they always check the location of exits and another 20% often check
Seriously? I believe that people may make a mental note of where they came in, but I bet most people forget to look if the nearest exit is behind them (as the safety briefing would remind you). Also, I bet very few people are as detailed as I am and actually count the number of rows forward and backward to the nearest exit. If you go down, there may not be any lights or even worse, there may be a bunch of smoke. That prevents you from seeing anything, so if you count, you can easily find your way.
75% say they would know what to do in a water landing
Ok, I believe that most people think they know what to do, but I bet most people wouldn’t do it right. I bet most people would pop the first exit they saw even if it’s submerged under water. Not such a good plan.
91% always keep their seatbelt fastened
Again, really? I can’t tell you how often I see people with their belts off. I’m a freak about this one too, because if you’ve got your belt on, turbulence won’t be able to smash your face into the ceiling. If it’s off, well, all bets are off.
So I guess I’m not blaming TripAdvisor here for trying, but people lie a lot. Just because they say something doesn’t mean it’s true, and on most of these results, I’d bet that’s exactly the case. I will bet that after the US Airways accident, there will be a temporary increase in the number of people who pay attention, but as usual, that will fade away.
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