There is context to the announcement of the interline agreement between V Australia and Delta which seems to have escaped the regurgitaters of airline press releases.

Delta, which eclipsed Southwest as the world’s largest airline in last year’s merger with Northwest wants United Airlines dead. Actually, deader than it is.

V Australia’s owner, Virgin Blue, has a code share agreement with United and apparently couldn’t care less either. It hasn’t answered a query about this sent yesterday, indeed hasn’t responded to a single query for over a month.

But we can fill in a few blanks. V Australia needs a two way link or ‘feed’ from Delta to counter the very potent relationship between Qantas and American Airlines.

Delta, because of the Northwest network merger, is building a very impressive alternative to connecting with American in Los Angeles and for that matter San Francisco, should V Australia fly there as well in future years.

Indeed, Delta gives V Australia opportunities that Virgin America might not ever offer, although the latter is defying its US doomsayers and building up an important franchise on some routes where any regular visitor to America would be seriously hungry for a bit of quality as is generally take for granted on the major Australian carriers.

The pressure that Delta and V Australia locally will put on United also assists Virgin Blue’s NZ subsidiary Pacific Blue put pressure on Air NZ, because of the slight but vulnerable synergies that exist between UA and NZ through common membership of the Star Alliance.

Air NZ is really exposed in the current situation to domestic competition by Jetstar and Pacific Blue, and the invasion of its international network by airlines encouraged by the laissez faire policy settings of New Zealand in regards to aviation.

The V Australia/Delta agreement will also be assisted by the inability of Jetstar to carry out that part of its strategic goal which required non-stop flights from Australia to the US mainland using Boeing 787s, because that jet is late, heavy, and gets the hots in an undercarriage someone forgot would be impacted by the heat retention qualities of composite structures.

But that’s another story.

The delays and restrictions affecting the Dreamliner mean Jetstar is moving to an Auckland hub from which it can, among other things, get 787s with 330 tightly packed customers to the continental USA .

But V Australia and Delta share one other advantage. They both have newly built Boeing 777s, and while they are different models, non-stop America with very competitive per seat costs is not a problem for either.

As pointed out in earlier threads, the Qantas A380s have inherently unbeatable cost advantages among airliners, but these are not realised to an optimum level in its current configuration of only 450 seats predicated on a level of demand for premium fares which is being slashed by a sudden shortage of masters of the universe or the travel accounts that used to sustain them.

It is true this is a bad time for V Australia to launch services to the US, but in the bigger picture of its relationship with Delta, not as bad as it had been before the deal was sealed.

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