Bransons Says It Is United That Will Go
February 7, 2009 on 12:32 pm | In Airline News, Airline Service | 1 CommentUSA Today’s Today in the Sky Blog is reporting that Richard Branson, billionaire backer of V Australia (Virgin Blue) as well as Virgina Atlantic, Virgin America and Virgin Nigera has pronounced that one of the new or future competitors on the US – Australia routes will have to drop out. I myself predicted someone would have to fall out in this post HERE. The difference is that I predicted it would be United or V Australia.
I agree that United Airlines is probably the most vulnerable on this route system but even United has something that V Australia doesn’t and that’s a network feed. United can route its considerable network to flights departing for final destinations in Australia and that’s tapping a country (the United States) with a population of over 300 million.
V Australia, on the other hand, does have the network feed from Virgin Blue but it pales in comparison to QANTAS and it has no firm partners in the United States at present. (I don’t count a very weak agreement to sell seats on Alaska Airlines from Los Angeles to Seattle.) Even if V Australia entered into an agreement with its US cousin, Virgin America, it still isn’t tapping into a major network. Virgin America can feed some traffic from major cities and that’s good but those major cities (New York, Bostin, San Francisco) are exactly where their competitor may be strongest. United has the San Francisco market, QANTAS and Delta has both NYC and Boston covered.
QANTAS also has the powerful OneWorld alliance to help as well. Airlines such as American Airlines help feed it traffic from their networks to destinations in Australia. V Australia has no such alliance or even a single dominant partner. Delta, on the other hand, has never flown to Australia but has a huge network in the United States, modern equipment to fly to Australia and a will to do so.
After 2 to 5 years, I would expect QANTAS and Delta to be the dominant airlines on these routes and potentially the only airlines. I agree that United may well be the first to go but I don’t think V Australia has that much greater a chance of sticking out to success.
