Bangkok--22 Mar--CAPA
Virgin Blue has ordered seven B777-300ERs (including one leased from ILFC), plus six options to launch long-haul operations next year, initially between Australia and the West Coast of the US. Virgin Blue’s move on the Pacific all but closes the door on Singapore Airlines’ aspirations for the route, at least for the medium term.
According to research by the Centre for Asia Pacific Aviation, the Pacific route expanded by 7% in the 12 months ended 30-Jun-06 to around 1.7 million passengers, of which Qantas has built a 70% share. Passenger numbers on the route have expanded by just 22% since 1993 (when there were five players in the market, including Northwest and Continental), while Qantas has enjoyed 150% growth in its passenger numbers on the route in that period. United Airlines is carrying under 500,000 passengers p/a — virtually unchanged since 1999, after hitting a peak of 545,000 in the year ended Jun-01.
At its peak, Air New Zealand was carrying approximately 190,000 passengers on the route, or around 260 passengers per day each way. But B747-400 equipment (with around 400 seats) was the wrong equipment for the route and low load factors eventually forced Air New Zealand to withdraw in late 2002.
Enter Virgin Blue, with better-suited B777-300ER equipment.
"The airline will be aiming for market penetration similar or higher to Air New Zealand (around 15%+). It is expected to sever a codeshare partnership with United, which reportedly delivers around 40 passengers per day to the US carrier. To build a sustainable market share, Virgin Blue will seek to introduce some attractive fares, which will be welcomed by passengers", said the Centre's Executive Chairman, Peter Harbison.
"As well as being a new direction for the New World Carrier, the considerable capital requirement (approximately USD1.5 billion) involved in its long-haul expansion will increase pressures on majority owner, Toll Holdings, to review its continued stake in the airline", said Mr Harbison.