Wirraway
25th May 2004, 15:19
Tues "The Australian"
Share slump dulls Virgin's top gong
By Steve Creedy, Aviation writer
May 25, 2004
LIKE Dickens's Tale of Two Cities, it was the best of times and the worst of times for Virgin Blue yesterday as a record low share price knocked the lustre off a prestigious international award.
Virgin beat no-frills icons Southwest Airlines, Ryanair and EasyJet to take out transport and travel company OAG's award for the world's best low-cost airline for 2004.
But worries about rising fuel costs, the start today of low-cost competitor Jetstar and traffic statistics showing a drop in the percentage of seats filled by paying passengers saw shares falling.
They ended the day at a new low of $1.93, 32c below the airline's listing price and 4c down on the day.
Qantas also picked up a gong as best airline based in Australasia and the Pacific while Singapore Airlines took home four awards, including best airline based in Asia, best economy class and best airline to Europe from the Far East and Australasia.
Dubai International Airport ended an eight-year domination of the airport awards by Singapore's Changi Airport to be named the best.
Hong Kong's Cathay Pacific was voted best trans-Pacific airline, while British Airways won a similar award over the Atlantic.
This year's awards also broke new ground when a US carrier, Continental Airlines, won the airline of the year award for the first time in the prize's 22-year history.
Virgin Blue president Richard Branson said: "To be ranked No. 1 in the world in such a short amount of time is a huge achievement. Not bad for a little airline that didn't exist four years ago."
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Tues "The Australian"
Virgin slumps on empty seats
By Steve Creedy, Aviation writer
May 25, 2004
VIRGIN Blue shares hit a new low yesterday after the airline's April traffic figures showed a sharp drop in the percentage of seats filled on each flight.
The shares dipped to $1.93, 4c down on the day and 32c below the carrier's $2.25 issue price.
Virgin's load factor for April fell 9.1 percentage points to 75.3 per cent compared with a year ago as the airline significantly expanded its fleet.
Capacity in April was 56.3 per cent higher as the fleet grew from 29 to 44 aircraft.
A smaller 39.4 per cent rise in traffic saw a bigger percentage of seats remain unsold.
Virgin officials said this reflected the decision to add aircraft in a traditionally quiet time of year and keep the pressure on new low-cost entrant Jetstar.
Passenger traffic grew a healthy 30 per cent to 924,000 compared with a year ago.
Virgin's shares are under pressure because of worries about higher fuel prices, a weaker Australian dollar and the potential impact of Jetstar.
The Qantas-backed discount airline Jetstar starts flying today and presents a direct challenge to Virgin Blue's low-cost model.
While Virgin is well hedged against the falling dollar, it is relatively exposed to high fuel prices which have risen on the back of supply restrictions and political tensions in the Middle East.
Both Virgin and Qantas last week introduced fuel surcharges to offset the effect of fuel prices.
However, not all investors are pessimistic.
Deutsche Bank retained a buy rating on the shares with a 12-month price target of $2.75.
Deutsche analysts said the airline's currency hedging policies would offset the higher cost of jet fuel and the dilution of its margins by its international unit, Pacific Blue.
They noted the airline's reduced unit costs – from 8.72c per available seat kilometre in the first half to 7.73c per ASK in the second – augured well for a margin lift this financial year.
"We retain our $2.75 valuation of VBA, which is based on an analysis of VBA's pricing relative to its global low-cost carrier peers and its Asian airline peers," Deutsche said in a note.
"However, we flag the stock will likely trade at a discount to this valuation while the cost of jet fuel remains a concern."
The airline also received a boost last week when it beat low-cost icons Southwest Airlines, Ryanair and Easyjet to be named the best low-cost airline in the respected OAG airline awards.
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Share slump dulls Virgin's top gong
By Steve Creedy, Aviation writer
May 25, 2004
LIKE Dickens's Tale of Two Cities, it was the best of times and the worst of times for Virgin Blue yesterday as a record low share price knocked the lustre off a prestigious international award.
Virgin beat no-frills icons Southwest Airlines, Ryanair and EasyJet to take out transport and travel company OAG's award for the world's best low-cost airline for 2004.
But worries about rising fuel costs, the start today of low-cost competitor Jetstar and traffic statistics showing a drop in the percentage of seats filled by paying passengers saw shares falling.
They ended the day at a new low of $1.93, 32c below the airline's listing price and 4c down on the day.
Qantas also picked up a gong as best airline based in Australasia and the Pacific while Singapore Airlines took home four awards, including best airline based in Asia, best economy class and best airline to Europe from the Far East and Australasia.
Dubai International Airport ended an eight-year domination of the airport awards by Singapore's Changi Airport to be named the best.
Hong Kong's Cathay Pacific was voted best trans-Pacific airline, while British Airways won a similar award over the Atlantic.
This year's awards also broke new ground when a US carrier, Continental Airlines, won the airline of the year award for the first time in the prize's 22-year history.
Virgin Blue president Richard Branson said: "To be ranked No. 1 in the world in such a short amount of time is a huge achievement. Not bad for a little airline that didn't exist four years ago."
=============================================
Tues "The Australian"
Virgin slumps on empty seats
By Steve Creedy, Aviation writer
May 25, 2004
VIRGIN Blue shares hit a new low yesterday after the airline's April traffic figures showed a sharp drop in the percentage of seats filled on each flight.
The shares dipped to $1.93, 4c down on the day and 32c below the carrier's $2.25 issue price.
Virgin's load factor for April fell 9.1 percentage points to 75.3 per cent compared with a year ago as the airline significantly expanded its fleet.
Capacity in April was 56.3 per cent higher as the fleet grew from 29 to 44 aircraft.
A smaller 39.4 per cent rise in traffic saw a bigger percentage of seats remain unsold.
Virgin officials said this reflected the decision to add aircraft in a traditionally quiet time of year and keep the pressure on new low-cost entrant Jetstar.
Passenger traffic grew a healthy 30 per cent to 924,000 compared with a year ago.
Virgin's shares are under pressure because of worries about higher fuel prices, a weaker Australian dollar and the potential impact of Jetstar.
The Qantas-backed discount airline Jetstar starts flying today and presents a direct challenge to Virgin Blue's low-cost model.
While Virgin is well hedged against the falling dollar, it is relatively exposed to high fuel prices which have risen on the back of supply restrictions and political tensions in the Middle East.
Both Virgin and Qantas last week introduced fuel surcharges to offset the effect of fuel prices.
However, not all investors are pessimistic.
Deutsche Bank retained a buy rating on the shares with a 12-month price target of $2.75.
Deutsche analysts said the airline's currency hedging policies would offset the higher cost of jet fuel and the dilution of its margins by its international unit, Pacific Blue.
They noted the airline's reduced unit costs – from 8.72c per available seat kilometre in the first half to 7.73c per ASK in the second – augured well for a margin lift this financial year.
"We retain our $2.75 valuation of VBA, which is based on an analysis of VBA's pricing relative to its global low-cost carrier peers and its Asian airline peers," Deutsche said in a note.
"However, we flag the stock will likely trade at a discount to this valuation while the cost of jet fuel remains a concern."
The airline also received a boost last week when it beat low-cost icons Southwest Airlines, Ryanair and Easyjet to be named the best low-cost airline in the respected OAG airline awards.
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