Tale of Woos from Virgin Blue

Virgin Blue is in for some trying times. The airline’s cooperation strategy with Delta and Air New Zealand received a negative response from the Australian Competition and Consumer Commission (ACCC). This comes as a dampener to Virgin Blue’s plans of putting up a stiff competition against the rival airline Qantas. As per the ACCC, Virgin Blue’s alliance can stifle competition in the market of trans-Tasman air passenger service. As per the ACC, the alliance may well bring competition issues on numerous trans-Tasman routes as Virgin Blue is a major competitive force against Air New Zealand. ACCC also stated that if competition between Virgin Blue and Air New Zealand comes to an end, then more than a million passengers would be adversely affected every year.

These observations definitely seem to hint towards the availability or rather unavailability of cheap flights. However, these findings have not gone down well with industry experts. They have made certain observations, which are mentioned in the following account.

Currently Unsustainable Tasman Competition

It is being pointed out that the entire aviation industry is not sustainable but this actually holds positive ramifications for the customer. Market exit becomes easier with the growing influence of liberalisation. This has the effect of improving industrial feasibility as entering the market becomes simpler. However, real economic efficiency remains unattainable unless governments stop propping up big outdated airlines.

However, here the scenario is rather different. About 90% of corporate business and around 65% of Australia’s market share is with Qantas and its subsidiary, Jetstar. Virgin Blue is attempting to find an enduring position in Australia as a significant full service rival. Virgin is listed and does not has particular claims upon perpetuity. Such issues are not under the domain of ACCC. The commission needs to work under the ambit of competition laws, which normally restrict capacity and give results that are not in tandem with market logic. There needs to be reasonable prospects for the present draft determination to be sent for appeal to the Competition Tribunal, if it is confirmed in the first place. Going by the earlier decision on Qantas Air New Zealand, in such an eventuality, better results can be expected

Concerns over terming Virgin Blue as Maverick

Pacific Blue was already voicing the decision to exit the domestic market of New Zealand. The company had lost about AUD$20 million within a two year span. Naturally, the airline was very cautious about foraying into the Tasman sector. Despite these state of affairs, the ACCC gave a lot of significance to the maverick role of Virgin Blue/Pacific Blue in fixing Tasman pricing. This strategy is similar to ACCC’s approach towards the application on Delta cooperation.

In the current circumstances, maverick behaviour would mean sabotaging coordination by initiating price wars and discounting aggressively or not following competitors’ example, while hiking market price.

In addition, there are some startling findings resulting from a short examination on pricing behaviour. This examination was made by the centre somewhere about the time when the application was made. Virgin Blue’s costlier product was being priced in the dangerous zone halfway between Jetstar’s and Air New Zealand and Qantas charges. This does not present the airline in a maverick’s role and even shows its struggling position in the Tasman.

Gap year travellers looking for cheap flights

Older gap year travellers are looking to ensure they get value for money when travelling, claims an expert. Tom Griffiths, founder of Gapyear.com, explained that the growing trend amongst older people to take time out is leading to more ambitious travel plans and the need to ensure budgets stretch that bit further.

"The emphasis now is if you are taking a gap year in a career, the general consensus is to get away and stay away for as long as you can on the money," he said.

In addition, some destinations are becoming more expensive so travellers may have to take more time and effort to research cheap flights to Australia or other long-haul cities.

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South Africa 'benefits from World Cup'

South Africa's decision to host the World Cup appears to have resulted in a surge in tourism.

Figures show that there was a 22.3 per cent increase in visitor numbers in March 2010 compared to the March 2009; overall the number of tourists rose from 493,559 to 603,479.

There was a 5.5 per cent rise in Brits taking flights to South Africa, while the build-up to the football event was highlighted as a likely reason for the 24.2 per cent rise in German visitors and the 12.4 per cent increase in travellers from Holland.

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Hurricane Earl – A Review

Hurricane Earl, which was classified as a Category four hurricane and registered howling winds of 140 miles an hour gradually let down on its fury as it tore along its course and finally made landfall at Nova Scotia, Canada on 4th September. During its journey, Earl was eventually downgraded to Category 2. Of the 2010 Atlantic Hurricane Season, Earl is supposedly the third hurricane, second major hurricane, fifth tropical storm, and seventh tropical depression. Here is an account of the effects of Earl on the different areas that came under its sway.

North Carolina

Earl hit the North Carolina coastline on 2nd September and swept the state with heavy rains and raging winds. In Cape Hatteras, the wind speed was recorded at 67 miles per hour, which was the highest in the state. Many of the roads witnessed flooding and North Carolina Highway 12 had to be shut down. Numerous homes also experienced flooding and thousands of residents had to go without power. Offshore waves reportedly swelled to heights of 25 to 36 ft. Tumultuous Seas also damaged a pier at Atlantic Beach.

New England

New England escaped most of Earl’s fury. On 3rd September, Cape Cod was grazed by Earl with the centre of the hurricane about 90 miles from Nantucket. Although, winds reached the strength of tropical storms, there was no major damage, except a few minor floods. Reports indicated that less than a thousand suffered from power outages. The highest recorded wind force was 58 miles per hour, while the highest recorded rainfall was about 5.07 inches.

Mid Atlantic

Delaware, Virginia, Maryland, and New Jersey in the Mid Atlantic experienced low to average effects of the hurricane. Large waves and tropical storms lashed areas along the coastline. The Delmarva Peninsula only suffered from some outer rainbands and gales.

Canada

On 4th September, Hurricane Earl reached ashore in Lunenberg County near Western Head, Nova Scotia at about 11 am. It came as a category 1 storm accompanied by unrelenting winds blowing at speeds of about 75 miles an hour. Waves as high as up to 82 ft and winds with hurricane like intensity were recorded in the areas just offshore. Among the onshore areas, Atlantic Canada bore the brunt of the hurricane. In Edmundston, New Brunswick, about 76.5 mm rainfall was recorded, while in Quebec, the reported rainfall was around 48.2 mm. The supposedly strongest onshore winds were recorded in Beaver Island, where winds reportedly reached the speed of 84 miles an hour. Roughly, almost all of Nova Scotia, Prince Edward Island, pockets of western New Brunswick, most of Newfoundland, and extreme Quebec and Labrador experienced winds that raged at speeds of at least 39 miles per hour.

Earl wreaked havoc with the power sector. Overall, hundreds of thousands of residents across the breadth of Canada had to go without electricity.

Six Excuses to Book Flights to New York from UK

The empire state as New York is called catches the fancy of many who plan to leave behind merry old England for a long haul holiday. After all, with its exquisite sightseeing, overwhelmingly satiating shopping, countless culinary delights, and electrifying nightlife, the big apple makes for a juicy holiday destination. Here one gets to find an eclectic mix of the old and new where quaint charming villages co-exist with ubermodern cities and gleaming skyscrapers. New York has so many attractions that listing them out is like trying to drain the ocean into a tea cup. However, here are some of the most popular hot spots.

Empire State Building

This grand architectural specimen ruled as the tallest building in the world before the World Trade Center came up. Today, it still remains the tallest building in the US. The observation decks on the 86th and 102nd floors of the building give sweeping views of the city for miles.

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United and Continental Airlines Set to Merge

The aviation industry is to reach a major milestone with the merger of the United Airlines and Continental Airlines. The proposed merger received the go ahead from the US Justice Department (DOJ). All antitrust concerns have been addressed by DOJ and the overall review is also complete. Voting by the shareholders remains the final step before the deal falls through. The voting is likely to be carried out on 17th September. After that it would be a matter of receiving the approval of the US Transportation Department. It is expected that the entire event would be wrapped up by 1st October, 2010. Here are some of the major highlights of the merger.

Financial Perspective

The all stock merger is reported to be worth about $US 3 billion and would create the biggest airline in the world. Airline sources indicated that some $1 billion to $1.2 billion is projected to be realised from annual synergies by 2013. It includes about $200 million to $300 million in annual cost synergies.

Scope of the Merger

A look at the current operations of Continental and United reveals the immense dimensions of the merger. Continental handles over 2,700 departures serving about 170 points throughout the world and has about 40,000 employees. United, on the other hand, is the founder of the Star Alliance and employs nearly 40,000 personnel. The company operates some 3,400 flights a day to over 230 destinations. The coming together of these two giant entities clearly spells as the creation of a mammoth in the aviation industry.

Future Leadership

Leadership positions would be filled in from the talent pool of both the companies. Both United and Continental are expected to contribute about the same number of members to the new management team. Other than Glenn Tilton and Jeff Smisek from United and Continental respectively, the new Board of Directors will be comprised of two union directors and an equal number of independent directors of both companies.

Benefits for Customers

The merger blends award winning customer service with industry leading network carrier. The merged company would fly the latest fuel efficient fleet (adjusted for cabin mix) and will also have the finest order book amongst the leading network carriers of the US. Customers will get to access the services of the number one frequent flyer programme in the industry. Earning and redeeming endless miles spread across a plethora of destinations with more and more partners will benefit the passengers immensely. Attractive new features will be added besides combining the features of Mileage and OnePass (the loyalty programmes of Continental and United).

Employee Benefits

A performance oriented incentive programme would be awarded to employees and there would be focus upon goal sharing. Another thrust area would be the creation of cooperative labour relations, which would include negotiating contracts with collective bargaining units that would work both for the employees and the company. Both airlines have stated that frontline employees would hardly be affected. Reductions would come in mainly from retirements, attritions, and voluntary programmes.

Source: Southall Travel News

Manchester Airport welcomes Emirates A380

The new Emirates A380 touched down at Manchester Airport as the airline launched a new service to Dubai.

Over 10,000 people turned out last Friday to see the twin-deck airliner arrive and take-off from the city's airport. The plane will be used on one of the airline's twice daily flights to Dubai and offers an increased capacity as well as stunning onboard facilities such as an in-flight entertainment system with more than 1,200 channels.

Maurice Flanagan, executive vice chairman of Emirates, said: "This is a historic moment for Emirates as we bring our 21st century superjumbo to the north west twenty years after our first flight from the region."

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