Amaaazing it will be. There is no denying the debt. It is significant. Fact is the (owned) A380s have a book value now of less than $40M each (value of spare parts). The fleet has been written down across the board meaning:
- Future depreciation expenses will be reduced due to the reduced book value of the asset.
- Future net income and profit margin will increase.
- Future return on assets and return on equity will both increase because of higher future profitability and lower asset and equity base.
- If the decision is made to retire certain aircraft, the write off is less significant.
So, it’s a question as to whether theses changes combined with revenue generation and cost mgmt are enough to service the debt. A company making $1B before COVID gives me confidence that the debt will be swiftly returned back to the levels needed for future investment (A350s and domestic replacements).
Back to Virgin, they have a different situation but their lease costs and operating costs have been massively reduced. Their load factors are the best out of everyone at the moment due capacity controls. They are doing fine and crew should be optimistic in my opinion.