Virgin Blue reduce domestic capacity 8%

[Michael Morrison]

400 Full Time Equivalent jobs are on the line

http://www.asx.com.au/asxpdf/2009021...6bd7235l5g.pdf

5 aircraft will be parked for 2009.

[Brad Myer]

What flights/routes will be cut?

There are no details....

[Michael Morrison]

Originally Posted by Brad Myer

What flights/routes will be cut?

There are no details....

I presume these will be announced with their results next week??

[Brendan McKenna]

If I was a DJ employee, I would be rather disappointed with the company leadership in offering $1 fares one month and laying off 400 staff the next...

[Ellis Taylor]

Originally Posted by Brendan McKenna

If I was a DJ employee, I would be rather disappointed with the company leadership in offering $1 fares one month and laying off 400 staff the next...

Then it's probably a good thing you're not! The fact of the matter is that the discount airfares are out there because the market needs stimulating because the aircraft aren't filling up as quickly as they were a year ago. It's true that $1 fares are really a gimmick to get people in and there aren't a lot of them - it's usually those seats which would have gone empty anyway. Nevertheless, the person who bought a $1 airfare may then buy a meal or a drink on board, in which case it may cover some more of the cost to the airline.

[Brendan McKenna]

I understand your logic and agree that the market must be stimulated in various ways. But for every $200 seat that you give up trying to sell, you need to sell 200 of them at $1 to generate the same income. As soon as you have sold any of those seats at the discount rate, you have lost the chance to sell them at the regular rate.

I would love to see some data which illustrates how many people decided to jump on a flight purely to utilise a discount fare vs those were who were planning to fly from A to B anyway and by pure luck managed to score a cheap seat instead of the regular fare that they were expecting to pay.

[Michael Morrison]

Originally Posted by Brendan McKenna

I understand your logic and agree that the market must be stimulated in various ways. But for every $200 seat that you give up trying to sell, you need to sell 200 of them at $1 to generate the same income. As soon as you have sold any of those seats at the discount rate, you have lost the chance to sell them at the regular rate.
.

It is not just the seats they sell in these promotions - it is also the PR.

- People talk about
- Rmeinds people that cheap fares can be had with Virgin etc

I'd say most of the people buying these fares wouldn't have flown the trips without the sale.

And as was noted above - once bought, Virgin have the ability to

- Sell baggage $20
- Live TV $4.90-10
- Food (say $12 for a sandwich & Wine)

So that $1 fare could well turn into a $42 fare.

I also reckon a few people book them and don't actually fly - I have done this with a $1 JQ sale before.

[Brendan McKenna]

PR can work both ways though - I know a few people who have responded to an ad campaign; jumped onto the internet to book a flight and found nothing available. Has generated a vision of bait advertising.

[Michael Morrison]

Originally Posted by Brendan McKenna

jumped onto the internet to book a flight and found nothing available. .

Jetstar springs to mind!

[Greg F]

Originally Posted by Michael Morrison

Jetstar springs to mind!

it does indeed! however I recently got a ticket to HBA for $9 each way BUT NOT VIA WWW, but the call centre.... and they didn't charge me a booking fee....... (friday fare frenzy)