FOXTROTS

Fox – sly.  Trots – left-leaning (Trotsky) plus its more insalubrious meaning.

Foxtrots – leading the industry in a dance.

 

Virgin on the cliff?

When the Virgin Atlantic airline was launched in 1984, I made the bold and brave statement that it would not last two years. 30 years later, I guess it is time to admit I was wrong!

 

But now I wonder again.

 

VA was protected almost 10 years by innocent managers at Singapore Airlines – who, despite having paid for 49% ownership of VA, and saving the airline from collapse, had zero influence.

 

SA sold to, ironically, an airline which once owned shares in SA itself – Delta.

 

Delta is a conservative and strong airline, and has survived in the maelstrom of the US airline business. I wondered why Delta decided to invest in such an operation as VA – which has a different management culture.

 

Was it an insurance policy for its US operations – always under pressure and with little chance of US support if times get tough? (Even now, leading the case against alleged government subsidy of Emirates, Etihad, Qatar, there is no government support or even encouragement.)

 

UK-based VA might not seem a good investment as security, however. True, the UK is part of the European Union (for the present; an in/out referendum is due 2016/17), but the UK is the most economically liberal of the EU markets, and in some ways more liberal than the US.

 

Now, the figures.

 

Our source does not provide timely figures. We have just VA’s half-year figures; in fact, just monthly, and we do the H1 calculation. These show a 5% fall in seat sales. And there has been a fall every month this year – in one, it reached 9%.

 

With Delta’s involvement I can imagine there is some ongoing rationalisation of schedules, prices, etc. But even for all-2014 growth VA’s growth was only 1%.

 

This time I will be more cautious, and not predict an early demise for the airline. But watch those traffic counts; if the current fall is confirmed for all-2015, then I may well dust off my prediction of doom.

 

 

The Fox

Remember, I’ll be famous after I’m dead.