25 February 2008

Virgins seem to be everywhere - and not so cheap

For some time we have seen Virgin Blue evolve from a LCC into - well something that looks remarkably like Ansett except better managed and making some money. However in recent years after the initial blush it too has seen its share of back room ownership struggles that I am sure is still making dear Sir Reg spin in his grave.

Now days after reporting that we believe Virgin Blue is no longer a true LCC airline - it seems the management paid attention and has fallen in love with Air Asia's model. It is rumoured to be looking at setting up JV based in OZ for a true new LCC based on Air Asia.

Virgin Blue is still not quite fish nor fowl and has not been able to achieve the stellar results of some of its fellow (now former) brethren such as RyanAir. Its yields last year were only 9.7% compared to the 21.1% for the aforementioned Irish LCC.

So far Virgin has not done well in trying to get a formal LCC operating, sustaining profits in the model. Perhaps it should not try again! Indeed the last 2 Virgin operations have been anything but LCC.


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