Could Virgin Atlantic losses result in cheaper or more expensive seats?

[Samaya]

Virgin Atlantic faced higher fuel costs, strong competition on transatlantic routes, higher taxes on UK air travel, rising airport charges and consequently they're expected to announce a continuing loss possibly in the region of £135-million compared to £80-million last time.

Job losses, suspended salary increases are expected along with other cost cuts and on this news could we see seat prices increase, decrease or just stay where they are, only time will tell?

 

[orangetiggs]

I think all airlines are the same, our nov flight is only around 150 the rest of the 400 is taxes :-(

 

[Pootle]

I think the era of plentiful bargains on long haul is over. Airlines will drop flights that are not profitable rather than run them at a loss. We have seen examples this year of both BA and Virgin cancelling flights. There will always be bargains to be had occasionally, but I think they will be fewer in number (eg Thomson flights for April have come down in the last few weeks). There will also be those who believe that 'if they just lowered their prices, more people would book, etc' I think that group face more disappointment.

Virgin Atlantic has imposed a pay freeze across its whole business (9000 employees). Their Chief Executive in an internal memo said they have plans to increase long haul revenues by £50m. (Source: Sunday Times)

This doesn't sound like cheaper seats to me - even with the savings they expect from using more fuel-efficient planes .

 

[wayneg]

I can still see a total sell out/merger. No idea how they can continue with these losses.
2012/13 £135m loss
2011/12 £80m loss
2010/11 £18.5m profit
2009/10 £132m loss

£328.5m loss in 4 years.

Travelling on school hols I can't afford to use them. I booked for relatives yesterday, 1st-20th Aug, VA wanted £3,900. Booked with Aer Lingus £2,200. Massive difference.

I think all airlines are the same, our nov flight is only around 150 the rest of the 400 is taxes :-(

Breakdown of a GBP 549.15 VA fare

Taxes & fees
UK Passenger Service Charge GBP 10.75
USA Transportation Tax GBP 23.00
USA Animal & Plant Health Inspection Service Fee GBP 3.30
USA Passenger Facility Charge GBP 3.00
UK Air Passenger Duty GBP 67.00
USA Immigration Service Fee GBP 4.70
September 11th Security Fee GBP 1.70
USA Customs User Fee GBP 3.70

VA
Operating Airline Fuel & Insurance Surcharge GBP 213.00
Total Net fare for all passengers GBP 219.00

£117.15 Taxes & fees
£432.00 to VA, £213 does get listed in the taxes & fees section but it does go to the airline. they have now changed the wording to try make it clerarer, its now called "taxes, fees, charges and carrier imposed surcharges"

 

[Magic Megadegs]

If they reduced their fares they would fill their planes. Supply and demand. Ok they would get lower margins but they would get increased revenue!

 

[2Tiggies]

If they reduced their fares they would fill their planes. Supply and demand. Ok they would get lower margins but they would get increased revenue!

I don't think they can afford to drop prices any lower. As orangetiggs pointed out, very little of what you pay goes to the airline - it's mostly taxes. Our last tickets which included connections between EDI and LGW through to MCO cost under £100 a piece; the rest was taxes. The year before My ticket was around £100 and some change while DD's child ticket was just over £80; again, the rest was taxes. I helped my aunt book a longhaul flight last night and her ticket price was £98 plus nearly £400 for taxes and fuel duty charges etc. It's not the airlines charging - it's the taxes that make it so expensive.

 

[Magic Megadegs]

Much of it is taxes but as away be points out there are significant charges etc that go to VA as well x

 

[wayneg]

It's not the airlines charging - it's the taxes that make it so expensive.

Taxes amount to £117.15 for a return economy fare on my example above, £213 is a fuel surcharge not fuel duty, it goes to the airline towards operating costs.
See this article, theories at the end why they do it. http://travel.usatoday.com/deals/in...ruth-about-airline-fuel-surcharges/47071096/1
I suspect its to get income from reward seats. I got a reward seat with Delta last year, it cost me £3.20 (plus £32 to upgrade to economy plus.) nothing like that with VA.

 

[Samaya]

Taxes amount to £117.15 for a return economy fare on my example above, £213 is a fuel surcharge not fuel duty, it goes to the airline towards operating costs.
See this article, theories at the end why they do it. http://travel.usatoday.com/deals/in...ruth-about-airline-fuel-surcharges/47071096/1
I suspect its to get income from reward seats. I got a reward seat with Delta last year, it cost me £3.20 (plus £32 to upgrade to economy plus.) nothing like that with VA.

That was a great price Wayne for last years Delta flight and your exactly right, it's a bit of a con with Virgin now, years ago it hardly cost anything to get a reward seat and regarding the US carriers, way back in '92 we had free flights with TWA from London into Detroit via St Louis, then an internal flight a week later from Detroit to Dallas and at the end of the holiday from Dallas via St Louis back to the UK and I think there was just a very small handling fee of a few dollars.

I also think (not 100% as it was long time ago) but we were allowed one free stop-over on that free reward ticket so Detroit was treated as the stopover.

 

[skelfbsfb]

Maybe they could do what Delta/KLM have done the past few years, pretend there is a glitch on their flights, most people then book with flights with them, they then have your money in the bank for the best part of 10 months. Now I think this is a great way of earning plenty of money from the interest alone. Maybe Virgin and the rest could learn a thing or two of how to get money early from their customers instead of charging over £1000 for EC.

 

[MichelinMan]

I can only think the fuel 'surcharges' are a way to get extra money out of reward seats. Surcharges are meant to be extra, unexpected charges. The oil price is 10% lower than it was a year ago, so the idea of a fuel 'surcharge' makes no sense to me.

 

[Samaya]

I can only think the fuel 'surcharges' are a way to get extra money out of reward seats. Surcharges are meant to be extra, unexpected charges. The oil price is 10% lower than it was a year ago, so the idea of a fuel 'surcharge' makes no sense to me.

What also makes no sense regarding the Fuel Surcharge is that it doesn't seem to be based on miles flown or the type of aircraft used.

Firstly, the fuel surcharge to Sydney with Virgin seems to work out far less per mile flown when compared to an Orlando flight.

Secondly the Fuel Surcharge seems the same whether you fly to Orlando on the more fuel efficient twin engine Airbus A330-300 or the four engine less efficient Boeing 747-400.

The following is taken from Virgins own web site....
On 2nd April 2011, the first of our new Airbus A330-300 aircraft took its inaugural flight between Manchester and Orlando.
The A330 is a long range twin-engine aircraft and is the most efficient in its class today.
These aircraft are at least 9% more efficient on a per-trip basis than the aircraft they will replace, and 15% more efficient on a per seat basis.
http://www.virgin-atlantic.com/corporate/images/newsustainabilityreport.pdf

 

[Red-Snapper]

Given that they clearly arent making any money - i dont see that it matters what they call the extra charges - they still arent enough.

If VA went bust - we would all end up paying more anyway because there would be a huge increase in demand on all the other carriers and we all know what supply & demand does.....

They have just refitted their aircraft to compete with the BA product - which I assume wasnt cheap. Florida is a long haul destination - which I think many people have tended to forget over the last 10 years where there have been relatively cheap flight costs/charters etc

In the current economic climate a bit of reality is setting in - it costs a lot to put on a transatlantic flight - and we are now being asked to pay more realistic prices, like it or not (not of course !)

 

[Pootle]

Given that they clearly arent making any money - i dont see that it matters what they call the extra charges - they still arent enough.

If VA went bust - we would all end up paying more anyway because there would be a huge increase in demand on all the other carriers and we all know what supply & demand does.....

They have just refitted their aircraft to compete with the BA product - which I assume wasnt cheap. Florida is a long haul destination - which I think many people have tended to forget over the last 10 years where there have been relatively cheap flight costs/charters etc

In the current economic climate a bit of reality is setting in - it costs a lot to put on a transatlantic flight - and we are now being asked to pay more realistic prices, like it or not (not of course !)

ITA - good post, even though it's not cheery for any of us!

 

[MrRomance]

I agree with earlier posts that all airlines are struggling, but I also feel that VA is still trying to fly on the coat tails of a reputation they had 15 years ago. For those old enough to remember, there was a time when VA were considered a higher quality airline. In fact, they were the only airline at that time offering free drinks throughout your flight etc. People aspired to fly VA and they built a reputation for being a "cut above" the rest. Since then, other airlines have caught on and upped their game but Virgin hasn't and they're still trying to charge for a "better" product that actually isn't "better" anymore.

We flew VA for our Feb '12 trip and fly P.E. It was AWFUL on the way out, terrible cabin crew and on the way back they sat my 8 year old autistic child on her own! Not such a big problem if I hadn't contacted special assistance months before to explain that she was autistic and anxious with crowds, noises and strangers.

They either need to drop their prices which as Wayne pointed out so well are ridiculously high compared to other airlines OR invest in their product and make it worth the extra cost. They can't keep using their prior reputation to charge more for what I felt was a sub-standard service.

With Aer Lingus now in the game, including a flight from Southend Airport which people in London & Essex are loving, they have to change their game plan or risk falling further and further into debt.

 

[Paula Sedley-Burke]

I agree with earlier posts that all airlines are struggling, but I also feel that VA is still trying to fly on the coat tails of a reputation they had 15 years ago. For those old enough to remember, there was a time when VA were considered a higher quality airline. In fact, they were the only airline at that time offering free drinks throughout your flight etc. People aspired to fly VA and they built a reputation for being a "cut above" the rest. Since then, other airlines have caught on and upped their game but Virgin hasn't and they're still trying to charge for a "better" product that actually isn't "better" anymore.

We flew VA for our Feb '12 trip and fly P.E. It was AWFUL on the way out, terrible cabin crew and on the way back they sat my 8 year old autistic child on her own! Not such a big problem if I hadn't contacted special assistance months before to explain that she was autistic and anxious with crowds, noises and strangers.

They either need to drop their prices which as Wayne pointed out so well are ridiculously high compared to other airlines OR invest in their product and make it worth the extra cost. They can't keep using their prior reputation to charge more for what I felt was a sub-standard service.

With Aer Lingus now in the game, including a flight from Southend Airport which people in London & Essex are loving, they have to change their game plan or risk falling further and further into debt.

I have also found this to be true re VA service gone south but prices north. Our last flight was appalling. We now find we have to bring food with us because the service is sooo slow. Cut the staff in economy so that they only have about 3 of them doing the whole plane ( but economy is now bigger because they got rid of a lot of PE & first class) . I did not know about AL we live in Essex. Oh I am going to have to check that out thanks!

 

[orangetiggs]

We looked at the southend flight but its not everyday and for our dates this nov they are over £200 more than virgin atlantic

 

[Paula Sedley-Burke]

We looked at the southend flight but its not everyday and for our dates this nov they are over £200 more than virgin atlantic

Oh no that wouldn't work. We holiday at that time of year also. I managed to get a fly drive with virgin holidays for October 31st 2014 for 1600 with fully inclusive car insurance for 2 weeks for 2 of us in economy with an upgraded car. But now the prices beyond April 2014 have disappeared from the search on the virgin holidays website. Odd. Glad I booked it!