V for Victory?

V Australia will launch with a daily Sydney- Los Angeles service on December 15, with a timing that the airline believes is better suited to business travellers, leaving Sydney at 9. 45pm and arriving in LA at 4. 30pm. The return flight will depart at 11. 30pm and arrive in Sydney at 9. 20am.

The announcement was made by Virgin Blue co-founders Sir Richard Branson and CEO Brett Godfrey plus New South Wales Premier Morris Iemma and federal Transport Minister Anthony Albanese.

“In a delightful case of deja vu, I was here eight years ago at Customs House with Brett in Sydney announcing our intention to launch a new airline for Australia,” Branson said.

“That airline was Virgin Blue. ” Sir Richard, never one to miss an opportunity, took a swipe at Qantas, claiming the Pacific routes were “in dire need of competition and a good shake-up, and that’s a challenge we are always keen to take on. ” The launch of V Australia will link the Virgin Group global airline brands into a round-the-world operation, which is also certain to bring more business. It also marks the first time that two competing Australian airlines will ply the Pacific to the US.

The airline is investing $44 million in establishing its base in Sydney, including basing a new 777 cabin crew trainer there. In all, it expects to employ over 1000 staff based in Sydney. Godfrey said the airline was yet to decide where its 777-300ERs, the first of which Boeing began assembling on April 1 for delivery in September, will be maintained.

Reports suggest the NSW state government offered V Australia payroll tax concessions and marketing assistance as enticements to base itself in Sydney.

To celebrate the opening of sales, and no doubt aid the generation of publicity, V Australia was offering Australian travellers

Unlike the Virgin Blue product, V Australia’s offering will include full service features such as complimentary meals and beverages and generous seating.

”1000 international economy seats between Sydney and Los Angeles for $999 return, inclusive of all taxes and charges (approximately $415). Normal economy fare levels start at $1899 return which, V Australia claimed, was 16 per cent lower than the current lowest available published fare on the route for the same travel period (as at March 30). International premium economy is pitched at around the $4200 mark and international business class from around $10,800 return.

Members of Virgin Blue’s Velocity frequent flyer program will be able to both “earn and burn” flights with V Australia with one return business flight from Sydney to LA earning enough points to redeem for two return Sydney-Melbourne Virgin Blue flights.

Godfrey told media that the airline had been examining the market carefully to establish a product that people value most in an international travel experience.

“Our research shows that the highest ranking desirables are seat size, personal space and being entertained,” he said. “We held off finalising our own inflight offering until other international airlines unveiled their updated product highlights. Off the back of that, we made modifications to ensure V Australia’s inflight products and services benchmark favourably against all competitors, including those flying today or those with declared plans for tomorrow. ” Unlike the Virgin Blue product, V Australia’s offering will include full service features such as complimentary meals and beverages and generous seating. V Australia will also be the first airline operating on the trans-Pacific to offer the latest inflight connectivity throughout all cabins, with passengers able to send and receive SMS text messages, as well as send and receive emails using GPRS devices such as BlackBerrys and mobile phones. Voice calls will also be possible in special zones of the aircraft.

International business is described by the airline as a “boutique style executive business product with an intimate, dedicated cabin and crew. ” It will feature fully flat horizontal 1. 88m beds with a Panasonic audio and video on demand inflight entertainment system featuring a 31cm screen and noise cancelling headsets.

The seats (beds) are set in a 2-3-2 configuration indicating that V Australia is not adopting Virgin Atlantic’s successful herringbone layout. The cabin will also feature mood lighting and each seat has laptop power and USB port connections.

A big winner is expected to be the airline’s international premium economy, which is an all-inclusive dedicated cabin with 40 seats set in a 2-4-2 layout and which the airline calls “the largest seats ever offered in a premium economy class of any airline, either flying today or declared to fly in the future. ” The seats are 51cm wide, with a 23cm recline and no seat will have less than 97cm of leg room (38in pitch). In-seat power is standard. This compares to Qantas’s new premium economy seats which feature a width of 50cm, a 23cm seat recline and up to 42in (106cm) pitch.

V Australia is promising its international economy will “provide the most spacious economy seating option of any airline operating the trans-Pacific route, individual on-demand seat back entertainment and comfy seating in a 3-3-3 configuration, with an unparalleled 48cm of seat width and 81cm (32in pitch) of leg room. ” This is certainly more generous than the standard Qantas 747-400 economy seat which is set at a 79cm

V Australia is expected to announce its next two markets soon.

”(31in) pitch and has a width of 44cm.

V Australia’s product along with Qantas’s A380 entering service on the Sydney to LA route from October will certainly push forward passenger amenities on the route.

V Australia is expected to announce its next two markets soon, with an Asian destination expected – possibly Hong Kong or in China – to maximise aircraft utilisation.

“Today’s announcements are the first of many and we have every intention of bringing revolutionary change not just to the trans-Pacific route but across the region,” Godfrey promised.

Critically, V Australia has been able to negotiate a codeshare agreement with an American carrier in Northwest Airlines. The ticketing agreement with Northwest takes effect from the first day of operations to offer onward connections from Los Angeles through NW’s hubs at Minneapolis/St Paul, Detroit and Memphis to a range of destinations in North America.

Northwest will also codeshare on V Australia’s services.

Forgotten by most, Northwest served Sydney for a number of years, along with Pan Am, Continental and American Airlines. Northwest operated Sydney-Los Angeles and Melbourne- Osaka-New York with 747s.

The daily service frequency to LA has been made possible by the new Australia-US ‘Open Skies’ agreement, liberalising air travel between the two countries. “Eliminating restrictions on US-Australia air services means lower fares, more convenient service, and more opportunity for travellers, commerce, and carriers to thrive,” said US Transportation Secretary Mary Peters, who inked the deal with Australia’s ambassador to the US, Dennis Richardson, at a ceremony attended by Prime Minister Kevin Rudd in Washington on March 31.

While some commentators have viewed the new Open Skies agreement as opening the flood gates for new services, V Australia is realistically the only new airline expected for some time.

“The Australia-US Open Skies agreement is a great achievement and a significant change after almost 20 years of restrictive bilaterals,” said Godfrey in LA for the US V Australia launch. “The agreement and the approvals granted underline the commitment of both governments to extensively liberalise Australia-US air services, a decision we strongly endorse and one which will bring significant benefits to both countries. ” Qantas with its codeshare partner American Airlines has a stranglehold on the route, now operating 17 Melbourne-LAs a week (plus double daily Melbourne-LAs, and daily Brisbane-LAs, plus services to San Francisco, Honolulu and New York).

Only United currently offers limited competition with its daily Sydney-LA service, although Air Canada has plans for a Toronto-LA-Sydney 777‑300ER service and its new Vancouver-Sydney 777-200LR service is having an impact.

Hawaiian Airlines, which operates to Sydney, can offer connections through Honolulu.

Air New Zealand and Continental Airlines also have had rights to operate the trans-Pacific from Australia to the US, but the business case has not been compelling.

The Open Skies agreement, however, will help airlines with flexibility during seasonal fluctuations in both services and destinations.

Air New Zealand, while avoiding returning to the Sydney-LA route, is making some impact on the market by hubbing Melbourne and Adelaide traffic through Auckland to San Francisco and Vancouver in particular. US airlines are expected to be far more interested in exploiting the new Open Skies agreement with Europe which they can serve with their incumbent fleets of A330s, 767s, 777-200ERs and even 757s, or services to China and India.

Equipment with suitable range to reach Australia is a problem. No US based airline has 777-300ERs and only United and Northwest have 747-400s.

Delta is taking delivery of 777-200LRs, but the ultra long range twin can’t quite viably reach Sydney from its Atlanta hub. Instead it would probably be some years before Continental might consider trans-Pacific operations with 787s.

One airline that does have the equipment, and the will, to operate Australia- US flights, but can’t, is Singapore Airlines. Not letting a chance go by to wave its flag, Singapore Airlines’s regional vice president southwest Pacific Paul Tan noted the launch of V Australia, saying it was a “step in the right direction for Australians who want cheaper airfares to and from the United States. ” Tan added that the announcement “not only signifies that Qantas’s nearmonopoly on the trans-Pacific route is coming to an end, but also represents progress with the Australian government’s commitment to consider further liberalisation of the route. ” He used the launch to publicly remind the current government that the “previous government’s commitment remains in place – that being that V Australia will be given time to establish itself before further liberalisation of the trans-Pacific route would be permitted. ” Interestingly, Tan flagged for the first time that Singapore Airlines wanted to serve Melbourne and Brisbane as well as Sydney to the US. Some analysts believe that Singapore Airlines might have received access to Australia-US routes if it had not solely targeted Sydney-Los Angeles.

“Like Australian Transport Minister Anthony Albanese, Singapore Airlines also believes it is in Australia’s best interest to have more access to the US market,” Tan said. “We look forward to meeting the minister, to discuss the progress of further liberalisation on the trans-Pacific route. ” Earlier, Albanese observed that “V Australia’s entry will provide travellers with greater options, put pressure on ticket prices and create new jobs in our aviation and tourism industries. ” Giving Singapore Airlines comfort, Albanese added that “the Rudd Labor government is committed to the further liberalisation of the international aviation market as the best way to keep fares affordable as well as give both new and existing airlines the confidence to invest in additional aircraft. ” Mark Twain said that the art of prophecy is extremely difficult, particularly in relationship to the future. But, based on the North Atlantic experience, the availability of long range twins like the 787-9, 777‑200LR and A350, combined with like the Qantas Group’s massive commitment to the 787 family, it could be expected that there will be significant proliferation of new Australia-US routes from 2010.

Dallas is a logical US hub for the Qantas/AA group, while non-stop flights to cities such as Seattle have appeal.

Other combinations that appear to make commercial sense are Brisbane- San Francisco and Brisbane-Vancouver, while a Melbourne-San Francisco route would also appear viable.

If Continental was to re-enter the South Pacific market it would probably like to use Houston as a base rather than Los Angeles.

Jetstar is obviously a major beneficiary of the Open Skies agreement and has flagged its intentions to fly to the US, but parent Qantas would likely steer it away from Sydney-Los Angeles.

Open Skies brings new opportunities and of course new challenges. Crossing the Pacific is a tougher ask and more economically demanding than crossing the Atlantic, and it may well be some time before we see the sort of route proliferation that has taken place between the US and Europe.

But change, and V Australia, are on the way.