V Australia failing to live up to its namesake

V Australia 777 (Custom).jpg

Virgin Blue’s long-haul operation V Australia, which launched operations earlier this year, today announced it has delayed the delivery of two Boeing 777-300ERs, a further sign of the impact the economy is having on aircraft-makers.

It is also a sign of how changing circumstances can leave a business plan in tatters.

V Australia has been several years in the making but it has ended up launching in the worst year possible.

International passenger traffic is falling like a lead balloon and airlines are having to discount to get bums on seats, leading to a drop in yields.

But when Virgin Blue decided a while ago to launch V Australia, the global economy back then was strong.

Consumers were crying out for more capacity and competition on routes from Australia to the USA.

At that time Qantas Airways and United Airlines had a duopoly.

The Australian politicians and the Australian Tourist Office were complaining that there needed to be more airlines on the trans-Pacific routes.

Singapore Airlines was champing at the bit to fill the void and then stepped in V Australia to save the day. But now it looks like V Australia is the one that needs to be saved.


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