Deadhead - you are correct, but perhaps a bit pessimistic. We are about to enter into negotiations. Here are the set pieces:
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Musings on Virgin.
Etihad Airways has purchased India’s Jet Airways’ three pairs of slots at London Heathrow airport for $70 million. The Abu Dhabi carrier, which is in discussions over taking a substantial equity stake in the Indian airline, said the deal was part of a sale and leaseback arrangement, in which Jet Airways would continue to use the slots to operate flights to London.
$23.3 million per slot
Virgin Atlantic doesn’t belong to any of the big three airline alliances, and the airline commands a coveted 304 slots (3.3%) at Heathrow, and Delta lusts for access to them....And, for now, at least, reports indicated that Delta and Virgin are discussing a transatlantic joint venture, which would have a combined 332 slots at Heathrow.
If Air France-KLM eventually joins in with Virgin and Delta, then together they would command 686 slots at Heathrow, which is a greater presence than Skyteam’s entire current allotment of 601 slots at the airport.
Even if you add Virgin’s 304 allocations to Skyteam, for argument’s sake, bringing the total to 905 slots, the alliance would still be a distant third to Star Alliance’s 1,638 slots, let alone Oneworld’s 5,596.
However, with Delta’s paltry 28 slots at Heathrow, or 446 per week if you count joint operations with Air France and KLM, it’s clear that the Atlanta-based carrier has to do something dramatic to improve its access to more lucrative long-haul routes from Heathrow.
and
Virgin Atlantic Limited says its revenue increased by five per cent to £2.87 billion, leading to improved airline load factors to 79 per cent (up by 1.3 per cent) with continued strong cash position of £412.3 million. The new figures were contained in the airline’s financial results for the year ending February 28, 2013.
In its accounts, the group showed increased revenues but highlighted rising costs, which impacted significantly on overall performance.
The group’s pre-tax loss of £69.9 million, which comprises an airline loss of £93 million...
In addition to $360 Million, my guess is that we pick up somewhere around half of the $140 million operating loss. Counting the loss, that is around $1.6 million per slot, if they all get used. Maybe a good deal, but we still need to turn it around and make some money.
Delta plans transatlantic shuttle service with Virgin
Author - Tom Otley - 24 May 2013
Delta wants to start a shuttle service between New York's JFK Terminal 4 and Heathrow's Terminal 3, the airline's CEO has revealed.
Delta boss Richard Anderson said: "Once we have gained the requisite approvals from the EU, Britain and the US our intention is to operate a joint Delta / Virgin shuttle from Terminal 4 into London Heathrow T3."
"[At the JFK end] that means we can use both lounges - the new SkyClub and the Clubhouse. If you look at the passenger survey data, the number one rated business product in the US to Europe market is Virgin Atlantic and number two is Delta, so they will join together to offer the very best service to the business traveller between JFK and Heathrow."
Under the proposed joint venture, Delta and Virgin Atlantic would co-ordinate schedules, network planning, pricing and sales between North America and the UK. The operation would be similar to that already run by British Airways and American Airlines across the Atlantic.
The two carriers would operate a total of 31 daily round trip flights between the UK and North America, 23 of which would operate at Heathrow. The airlines also plan to implement codesharing, reciprocal frequent flier benefits and shared lounge access.
The carriers are also seeking anti-trust immunity for five-way coordination on UK-US traffic flows so that Delta can continue to effectively operate its existing joint venture with European airlines Air France, KLM and Alitalia, alongside this proposed agreement with Virgin.
Anderson said that he envisaged that if regulator approval came through, it would do so in the "third quarter of this year".
Virgin Fleet:
Airbus A330-300 10
Airbus A340-300 4
Airbus A340-600 15
Airbus A380-800 6 On order, deliveries pushed from 2013 - 2017?
Boeing 747–400 12
Boeing 787–9 — 16 On order, deliveries 2014
(or whenever the stretched version of that Tupperware contraption smokes up JFK ... Boeing bought Douglas, Boeing goes to crap, coincidence?)
Total 41 jets currently in service 22 orders, 14 options. Load Factor was running high seventy percent to just below eighty percent. Their A340's were planned to go away.
Our contract provides that management must review this agreement with us and come to terms of an agreement. The default baseline is that Delta operate 75% of the block hours it sells (share of the revenue). So, if we were to hypothetically split revenue 50/50, we would get 37.5% of the flying.
Delta has also agreed to maintain current YOY flying levels for a year using a 3 month window.