TIMMEEEE
22nd Mar 2004, 22:35
Herald-Sun Tuesday 23 March 2004
Virgin flies into turbulence
By Geoff Easdown
23mar04
VIRGIN Blue shares retreated yesterday after an unwelcome analyst's report from the carrier's own broker.
Virgin scrip slipped 4˘ to $2.41 as profit takers reacted to poor February figures and a report by Anthony Srom of broker Goldman Sachs JBWere that Virgin was unlikely to meet 2004 passenger load forecasts.
He suggested the carrier could have to hand back more aircraft than expected from short-term leases.
News of his leaked comments drew immediate denials from angry Virgin chiefs, noticeably upset that it was GSJBW that backed the Virgin float last December.
Virgin's communications head David Huttner said the low February figures released last Friday only reflected seasonal trends.
"February and May traditionally are poor months for all airlines," said Mr Huttner.
"I don't give too much credit to what has been said," he added.
The comments contained in the GSJBW report were echoed as well yesterday by Tolhurst Noall's Marcus Padley. He cautioned the weak February numbers did pose a risk, saying that, "although the long-term load factor trend is still above prospectus, it does raise the prospect of earnings risk if load factors continue to deteriorate".
Traffic figures Virgin gave the Australian Stock Exchange last week showed that the carrier filled fewer seats with paying passengers in February than it did a year ago.
Virgin Blue filled 79.6 per cent of available seats last month, down from 83.4 per cent a year earlier, the company acknowledged. This was despite a 39.3 per cent rise in February passenger numbers against the previous corresponding period because of increased flights and new routes which were opened during the past year.
The GSJBW report was not all bad for the carrier. Load factors were tracking slightly above prospectus estimates, the report said.
"Our earnings forecasts and valuation remain unchanged," said Mr Srom.
He added, however, that previously issued load factor estimates were unlikely to be met.
The analyst said the move could threaten Virgin fleet expansion plans.
Virgin flies into turbulence
By Geoff Easdown
23mar04
VIRGIN Blue shares retreated yesterday after an unwelcome analyst's report from the carrier's own broker.
Virgin scrip slipped 4˘ to $2.41 as profit takers reacted to poor February figures and a report by Anthony Srom of broker Goldman Sachs JBWere that Virgin was unlikely to meet 2004 passenger load forecasts.
He suggested the carrier could have to hand back more aircraft than expected from short-term leases.
News of his leaked comments drew immediate denials from angry Virgin chiefs, noticeably upset that it was GSJBW that backed the Virgin float last December.
Virgin's communications head David Huttner said the low February figures released last Friday only reflected seasonal trends.
"February and May traditionally are poor months for all airlines," said Mr Huttner.
"I don't give too much credit to what has been said," he added.
The comments contained in the GSJBW report were echoed as well yesterday by Tolhurst Noall's Marcus Padley. He cautioned the weak February numbers did pose a risk, saying that, "although the long-term load factor trend is still above prospectus, it does raise the prospect of earnings risk if load factors continue to deteriorate".
Traffic figures Virgin gave the Australian Stock Exchange last week showed that the carrier filled fewer seats with paying passengers in February than it did a year ago.
Virgin Blue filled 79.6 per cent of available seats last month, down from 83.4 per cent a year earlier, the company acknowledged. This was despite a 39.3 per cent rise in February passenger numbers against the previous corresponding period because of increased flights and new routes which were opened during the past year.
The GSJBW report was not all bad for the carrier. Load factors were tracking slightly above prospectus estimates, the report said.
"Our earnings forecasts and valuation remain unchanged," said Mr Srom.
He added, however, that previously issued load factor estimates were unlikely to be met.
The analyst said the move could threaten Virgin fleet expansion plans.