Merged: Virgin Blue Share Price - how low can it go and for how long?

[tsalta]

Not good.

The real issue for VB at the moment is CASH.

Of the current 526 mil in cash, approximately 300 mil is not available to be spent as it is locked as cash reserves required by the groups financiers.

That leaves around 120 mil liquid cash reserves.

The total cash position decreased from 772 million to 526 million over the previous 12 months. This is a decrease of 246 million or 4.7 million per week.

If that rate of cash burn is maintained, there is only 26 weeks of operational cash remaining.

In addition to the current rate of cash burn, the debt position has worsened in the last 2 months and is set to deteriorate even further over the next 6-12 months. An additional 1.4 billion in debt will be added during this period.

The dry leasing cost for 1 x 777 is in the vicinity of $45000 per day. Each additional aircraft will be placing an increasing burden on an already depleted and decaying cash position.

Unless there is a dramatic about turn in passenger numbers and yield in the next 26 weeks, VB will either need to raise capital or take some other action to survive.