greenslopes:
the
VB share price will rebound a little - just lots of squarky analysts in a very 'toey' market that is jumping at shadows and becoming very conservative.
Today's drop is both a multiplier of the Toll repositioning and the continuing impact of financial reporting structures [which were introduced in late 05 and means that companies that
VB that have had a tendancy to regularly amortise or carry forward specific capital (eg start up...?.....which was 8 years ago) will look worse if there is a real downturn in revenue during a quarterly reporting period.]
vb's looks worse due to its relative low asset base and high gearing in some parts of the biz - but moreover due to things coinciding like Toll wishing to 'get back to core business' (code for pls buy our shares in
VB and our sidebar businesses), serious concerns over domestic consumer demand and things like fuel and the cost of money.
VB's board and B.Godfrey will no doubt be cautiously talking it up as indeed they should, however, I'd expect the
VB blade of scrutiny to keep falling on any area of costs that it can....and not just stop at taking out crew meals reducing frequency of transport at some ports etc etc.,
The few people running around proffering that its a parody to Ansett are way off the mark. DJ is just going to have dance a bit harder and faster.
On the upside:
VB's position though may help to discourage some of the other LCC's that have been seeing the end of the rainbows in Australian skies. (Nobody ever gets rich out of aviation except ex wives!)