ozangel - thanks for the calculations. I haven't had a chance to look at the proposal yet but judging from what you've calculated, it still looks like they could do better. Like you said, the AUD has sky-rocketed and Virgin Blue are profiting from this.
This article cofirms what we're all saying:
- Almost a third of
VB's operating costs are exposed to the US dollar and it is estimated that a 1 cent increase in the Australian dollar against the greenback equates to a $2.6 million increase in pre-tax earnings for this financial year.
-
VB is expected to upgrade their earnings guidance at its annual meeting on November 26th.
- They are forecasting Virgin to post a net profit of $38.5 million this financial year, compared with the airline’s estimates of a break-even result and are tipping the share price to hit 70c a share due to more favourable economic conditions
- Shares in Virgin are around 53c, up from a low of 13.9c in March.
Management seem more than willing to tell us anything to vote through an EBA that locks in further cost-savings. The Australian economy seems to be moving along quite nicely and analysts are tipping another interest rate rise when the RBA meets next Tuesday. This invariably means things are looking much better than when the second last EBA was put to vote.
What does this mean for us? Well, don't be too quick when deciding to vote on a sub-standard agreement. As already stated, the FAAA are 'satisfied' with this draft but they HAVE to be satisfied as FWA directed the company to bargain with the FAAA and crew but only on a few key points that were brought forward in an application made by the FAAA. Unfortunately, FWA did not direct the company to bargain on the whole agreement and who knows what they will decide if another one gets voted down?