Originally Posted by
T-Vasis
There will always be an increase in training expense. This is short-lived and will not impact on future profitability. I doubt there are any crew sitting around doing nothing. A few additional heads in the business will not impact profitability. I suspect the airline is already extremely lean. Do you have evidence of the reduced utilisation? What is the current aircraft utilisation for the A320 and 737 fleet?
Depreciation is a non-cash expense. It has no impact on cash-flow. It is irrelevant to airline profitability. Virgin does not own all of their 737's. I will assume the ones going to Tigerair are owned and the purpose of accelerating the depreciation on these aircraft is to clear the books for Virgin and Tigerair of this expense. Rental expense decline would reflect the removal of A320's from the fleet as I assume these are all leased. In FY18 Tigerair increase rASK, yield and RPK's on the back of ASK reductions (two aircraft). They're all positive movements, not negative. cASK increases are likely a result of uncontrollables e.g. fuel expense. Other cASK increases would directly link to activity. Tigerair's cASK would be the lowest out of all airlines.
T-Vasis, keep in mind this was all supposed to have been completed mid last year. And they’re not even half way into it!
I don’t have figures to back my reduced utilisation claim up so take that how you want. All I can go off is what I’ve been told by those there, that A320 flying is down, 737 flying up. But I don’t imagine the leases are any cheaper whether they fly or not. Only a couple have left the fleet last time I checked.