Some of this has been covered before but bears repeating since some posts appear to relish the prospect of the demise of one operator for some perverse reason.
Taken from — CommSec’s analysis of Virgin’s 2007 FY results it refers to Virgin having some fleet flexibility.
— VBA leases 46% of its fleet in FY08, and has the option over the next 12 months to exit some of these leases.
— Given capacity constraints and the fact that Boeing has firm orders until 2013, the cost of owning is more economical than leasing. This is particularly so given Virgin still has 23 options on 737s that it negotiated in 2001, and these are available at 2001 prices.
— Virgin will be able to match capacity to routes, eventually utilising the Embraers delivered on 2008 (and as many of the 20 due for delivery in FY ’09 it decides to take) on routes where load factors are relatively lower, (direct services bypassing major hubs) and potentially starting up operations to destinations it does not currently service. For example VBA identified 18% of the Australian market that it does not currently serve.
— Virgin has yet to decide which routes it will service utilizing the Embraers when they come online.