Originally Posted by
virginexcess
Correct me if I'm wrong, but wasn't the debt paid down from proceeds received as a result of the capital injection from the chinese? If it had been paid from operating profit, then the underlying profit figure would have been much higher, to the tune of $500m. If I am correct on this Borghetti's claim is not one of having paid down debt, but one of being able to convince yet another shareholder to give him more capital to fritter away on his next fancily named project.
If the debt reduction was a product of JB's brilliant business strategy, then we should see another significant tranch of debt retired in the second half of the year. I bet we don't.
The capital injection you are referring occurred as new shares issued. This issue (and resultant dilution of existing shareholdings) was no where near the levels in the figures quoted. Of course there is creative accounting. A major rivalled displayed that on a grand scale over the years. To refer to JB as the reason.... who will really know. One thing is for sure, financial reporting has become a dark art and I am certain the leader has many minions crunching the numbers to fit.
My point all along is that inflammatory reference to Virgin failing does not help anyone. Facts are airlines are cash cows. The difficulty is in the efficient running of the operation as capital cost and compliance factors are massive and frankly restrict every airline in this country. There will always be personalities that will take advantage of this cashflow for there own advancement. Particularly in management roles when there is a revolving door.