Little Red to Easyjet

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This topic contains 37 replies, has 17 voices, and was last updated by  transtraxman 9 Oct 2014
at 08:54
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Viewing 15 posts - 1 through 15 (of 38 total)

  • Anonymous

    TimFitzgeraldTC
    Participant

    Afternoon All

    With the question marks surrounding Little Red on the domestic routes that they took over from BA (EU slots on EDI / ABZ) and Easyjet saying they will consider flying to Heathrow if the right opportunity arises, I see a possibility whereby Little Red is canned and Easyjet step in and take the routes (as not sure else could reasonable deliver these routes without making a loss). I don’t see BA being allowed to retain them. Whether they then codeshare and work with other airlines who knows – but perhaps that is how they will enter the Heathrow market?

    Just a thought.


    LuganoPirate
    Participant

    Not a bad idea Tim. I see Little Red closing anyway in the near future. Virgin just doesn’t have the route network for LR to feed into as BA does so it’s mainly relying on point to point traffic rather than a mix and that’s just not enough. I still think Branson made a strategic mistake by not buying BMI when he had the chance but that’s his style and to an extent his modus operandi, he can’t get it for almost nothing, then forget it. Having said that he’s made some good money from that MO and Virgin money will be another example when it goes public.

    I’ve also thought Easyjet would make a good feeder for BA long haul flights. EasyJet makes their money on short hall and ba on long haul so it would be a good fit perhaps?


    SimonS1
    Participant

    Easyjet already has a tie up with Emirates through Skywards, so perhaps something could be done there? On the other hand EK already flies to most places that are worth while so maybe not.


    MrMichael
    Participant

    Branson threw his toys out of the pram when Easyjet bought GO from 3i. I was on the periphials of that deal when doing some work with 3i. 3i bought it from BA for cash, and doubled their money by selling it on to Easyjet for cash and shares within a few weeks. Branson then kicked off as they did not sell it him for less! As I recall Branson also copped the needle when (I forget it’s name) a small Belgiun airline was sold on and he again offered less than the buyer and cried some sort of foul.


    BigDog.
    Participant

    Am not sure, the Virgin brand is truly global. In the US, Virgin America is winning plaudits from both passengers and reviewers,

    http://www.airlineratings.com/ratings/127/virgin-america

    and is arguably America’s favourite airline. Similarly Virgin Australia in its market.

    Walsh clearly doesn’t understand brand power when he bet his rival a “knee in the groin” that the Virgin Atlantic name would disappear within several years of Delta buying a 49pc stake.

    Little red may need new strategic direction/buy out however as Virgin is a far bigger global brand than IAG/BA I don’t see the name being subsumed.


    SimonS1
    Participant

    @MrMichael – I wouldn’t call 11 months a “few weeks” but I take your point.

    When it comes to the big deals Branson has always missed out. Go and BMI for sure. Plus Virgin Express (and it’s various subsidiaries) wasn’t exactly a roaring success.


    BusinessBabble
    Participant

    Virgin Atlantic was not in a position to buy bmi, it was / still is(?) heamoriging cash as was BMI at the time.


    LuganoPirate
    Participant

    From memory Lufthansa was willing to sell to VS for quite a low price as they didn’t really want BA to have it. If instead Branson had put up he would have had a bargain, more slots and a European network that would have fed traffic into his long haul flights. He could have easily raised the finance if he had wanted to.


    SimonS1
    Participant

    As I recall it Branson actually made an offer and had access to the books. In the end BA paid about 3x as much I believe.

    There may be something in what BusinessBabble says, maybe it wasn’t the price but the losses BMI were incurring year after year.


    TerryMcManus24
    Participant

    Little Red sounds like some sort of mozzie bite. Would suggest a name change might be worth considering if survival is in the offing….eg …keep it simple with say..Virgin UK…otherwise….abandon ship..


    mkcol74
    Participant

    All Manchester based Little Red crew have been called in for a meeting this morning.


    TimFitzgeraldTC
    Participant

    I hope Little Red does continue. However the biggest mistake as far as I can see is that their fare structure mirrors that exactly of BA in terms of price categories – and rules / flexibility. I do have clients who travel to Aberdeen to BA on a regular basis and the policy is fully flexible BA tickets as they change very frequently. BA has a superior schedule / frequency so for over £600 per ticket there was no incentive to change (EDI with a higher frequency might in theory have been a possibility if that was where they were going). But when your price / restrictions are the same as your competitor – why would you move. In air product doesn’t really count for much on such a short flight, so you are competing on potential loyalty programs (when not comparing prices), and many of my northern clients are BA members with Bronze / Siler / Gold but not Virgin as there is no historical feed (BMI to a degree). So what they should have done is go in with tickets that perhaps had a £25 change fee instead of £60 on the lower fare levels and a fully flex fare at say £400 over £600. Whilst it is still not a proposition for everyone with their more limited schedule it might have generated more interest and traffic.

    With Easyjets move to the GDS, with exclusive fares only available to agents (baggage and seating inclusive – and no credit card fees), they seem to be in a position to offer corporate clients what they want, the ability to work with TMC’s and corporates together. The only thing they now need to do is perhaps look at codeshare (I think they do on LGW-MOW but not tried to book via codeshare) and have through ticketing / connection EZY to EZY which I’m sure people would pay a £25 fee for?? If they move to LHR at some point then I think they would have to address these questions in some form.


    TimFitzgeraldTC
    Participant

    News just in:

    Virgin Atlantic has today announced that it will cease the Little Red domestic flying operation next year.
    Its three daily services between London Heathrow and Manchester will continue to the end of March 2015, while flights between London Heathrow and Aberdeen and Edinburgh will continue throughout summer 2015 with the final flights in September
    Final flights for the domestic routes are as follows:
    Manchester – 28 March 2015
    Aberdeen – 26 September 2015
    Edinburgh – 26 September 2015


    AMcWhirter
    Participant

    It was reported in the Sunday Times a month ago. And now it’s official.

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