Originally Posted by
Jaa
As modandm pointed out above the market was expecting something. The share price had consolidated above $1.50 in a range between $1.50-$1.53, falling well before the annoucment yesterday.
VBA's recent problems were mostly caused by their diastrous V Australia expansion and to a lesser degree NZ domestic service. VBA were silly enough to use the wrong aircraft type to start up a South African service where 2 engined planes are heavily penalised. This is one area where Air NZ can definitely help them, no airline flies more long-haul routes as a % of their total routes.
With alliances with Eithad (Middle East & Europe), Air NZ (Tasman), Skywest (Regional) and Delta (Pacific - if they can get it across the line) VBA has good future prospects. They also plan to consolidate down to one brand which will bring cost savings and help brand synergy.
Domestically VBA are currently destroying both Qantas mainline and Jetstar flying more services than either, an important selling point for business travellers. They have more modern reliable aircraft than Qantas and better service, reliability and comfort than JetStar and Tiger. Domestically they are also more profitable.
The one brand strategy to cover all classes of travellers is the same as Air NZ's strategy, though Air NZ have executed it much better (Consistent branding, GrabaSeat, innovation galore). Thus there doesn't seem to be any stragic disagreements.