Merged: Virgin Blue Share Price - how low can it go and for how long? [Archive] - Page 4

TBM-Legend

28th May 2010, 03:15

Virgin Blue's reality check

TOP News
Virgin slashes guidance, shares plunge 12:33 PM

A little more than three weeks ago, Virgin Blue warned that pre-tax earnings were likely to be at the lower end of its guidance of between $80 million and $110 million for this financial year. Today it slashed that guidance to between $20 million and $40 million. The business, it appears, hit a wall this month.

Before today’s warning it had appeared that, after a torrid 2009, the domestic industry had stabilised and, indeed, was showing signs of a recovery – albeit a relatively weak one, in both volume and yields.

Only three days ago, Flight Centre upgraded its guidance, saying trading conditions had improved and the Australian business was performing strongly with no sign yet of the slowdown being reported by some retailers.

Virgin Blue’s issues appear to be related to its long haul operations, with the group saying its domestic operations were still expected to make a pre-tax profit of about $100 million. Its V Australia trans-Pacific brand is, therefore, presumably still haemorrhaging. :confused:

But it goes beyond that. The airline also said there has been a "rapid" deterioration and increased volatility in its operating environment, particularly in the leisure sector, both domestically and internationally.

LOL JB.

BG got the golden handshake and JB you've got the golden rivet!

GlobalMaster

28th May 2010, 03:29

Sir Richard said: "If it becomes impossible for us to remain an independent airline and survive, we may come to a situation where we have to consolidate."

Is nothing like a merger to make the share price rise again?

KRUSTY 34

28th May 2010, 04:09

It appears that JB may have some tough decisions to make. :{

C441

28th May 2010, 04:18

Sovereign debt crisis, that's what!
When the share market gets hammered like it is EVERYTHING goes down. Especially when VB have downgraded their profit guidance...

VBA shares have suffered a significantly larger trend downwards than the All Ords, particularly since mid-May. Read into that what you will.

https://chart.bigcharts.com/custom/andrewwest-au/chart.asp?symb=VBA&time=3mo&ma=aaaaa:0&maval=&freq=1dy&type=2&uf=4096&lf=1&comp=&compidx=XAO:123590&startdate=2/28/2010&enddate=5/29/2010&size=1&style=856

B772

28th May 2010, 04:29

At 2pm AEST 28/5/10 we have seen 184,870,884 shares change hands as low as 30c. There are still 60,000,000 plus shares for sale where the sellers are asking for 40c or less.

As VBA still has a very high Price/Earnings ratio and a high debt/equity ratio of 308% with the prospect of no dividends on the horizon they are still on shaky ground.

Massimo Borghetti's newly purchased VBA shares are well underwater and the net present day value of his renumeration package is not as attractive as it was when he started on 08/05/10.

3 Holer

28th May 2010, 08:22

Yes Sir, bought another 25,000 today at 31c. :ok:

Sunstar320

28th May 2010, 08:32

The fate of VA lies in this DL tieup, and if fails, then you can probably guarantee significant reductions across the pacific and launching mabye new markets like Japan/Hong Kong.

So when is all this revamp project going to be announced. Sounds expensive.

404 Titan

28th May 2010, 09:07

B772

Debt/Equity of 308%. Holly crap. Last time I looked QF was about 96% and where I work CX it was about 62%.

LondonSloop

28th May 2010, 21:29

:*

For the: FY08 FY09 FY10E

Equity $925M $577M $1020M

NetDebt 48.8% 69.3% 51.7%

Source: Morgan Markets

Mr. Hat

29th May 2010, 01:11

I think the sky is officially falling. 3 holer I'm jeallous missed the opportunity. Well done that'll work out nicely.

The The

29th May 2010, 03:30

........................................FY07.........FY08... .......FY09..........6mthFY10

Interest Bearing Debt (m).......846.4.......1486.2........1779.4........1770.4
Shareholder Equity (m)...........743.5.......925.3.........577.1..........919.4

Debt/Equity ratio (%).............113.8.......160.6.........308.3..........192 .5

Qantas D/E (%).....................81.9.........72.5..........95.5..... .......97.9

DJCCGuy

29th May 2010, 04:52

Reading this in the Financial Review this morning
"Something smells a little fishy, especially given that Borghetti took over just three days after guidance was affirmed. We wonder whether we're seeing a clearing of the desk...so he has a clean slate to work from."

What exactly is this implying??

GAFA

29th May 2010, 05:06

Perhaps the original figures were put out to make BG look good before his departure:suspect:

adsyj

29th May 2010, 05:26

DJCCGuy

I'm not a finacial guy but a mate of mine who is a stockbroker once explained to me that most CEO's are paid bonuses in cash and shares/options based on movement of share price during their tenure.

So when their is a change in command companies generally pour out the bad news which in turn reduces the value of shares to a low point. The new CEO then looks like a hero as the share price rebounds from its lows and a hero for saving the company and adding shareholder value. This results in the said hero recieving a huge bonus.

Someone here may it explain it better or refute my comment but understand I'm only a dumb pilot. Unfourtantely I'm on a five day trip starting tommorrow morning so I am resting today. Otherwise I would of caught up with my beer swilling broker mate at the rugby this arvo and could of grabbed a better explantion before he(we) got to full:ok:.

Chocks Away

29th May 2010, 06:12

Yeh, that's how the Townville refueller explains it.:ok:

Cactusjack

29th May 2010, 12:39

Round and round the foolishness goes......

All of the latest financial 'disclosings' come as no surprise. The place has been run by a bunch of assclowns for a long time, and now the chicken has come home to roost. To have two downgrades in less than a month, the second forecast being approximately 75% less than the one just three weeks ago sends a clear message - The place is being run by either liars, or complete incompetents,or perhaps both, you be the judge.

To say that DJ needs an immediate and radical overhaul is an understatement ! They need to start the cleaning process with the overhaul of the ridiculous business structure pertaining to 'trying to operate both a Low cost brand, premium brand and mid low cost/premium brand. An absolute farce. And it is a legacy and testament to former incompetent management decisions ( don't worry there is still enough incompetent deadwood left to run the place yet even further into the ground).

It would appear JB has learnt his first lesson this past week.
I don't think he will be 'tricked' a second time. In the very least he needs to 'bring in the cleaners' and shovel out the crap that remains entrenched in VB's 'Alice In Wonderland' fantasy world where inept, incompetent and pathetic management get paid ludicrous salaries to produce nothing but financial decline.
Then again, maybe JB's quarter of a century stint with an operator that has ridden high upon the successes of life and provided a substantial gravy train to the upper echelon's of business management has not adequately prepared him for the reality of heading a 'flair based LCC' ??

FlexibleResponse

29th May 2010, 13:09

Most airline crew and those closely associated with airline operations are way too smart to ever buy airline shares.

TBM-Legend

29th May 2010, 23:12

Investors told to fly by
RICHARD WEBB
May 30, 2010

Australian Share Market

THE two major airline stocks on the Australian sharemarket have proved huge underperformers, and the latest profit downgrade from Virgin Blue has added to the misery.

If you are a share trader, then there is plenty of opportunity given the share prices of Qantas and Virgin Blue bounce around like yo-yos - albeit, more often than not in a southerly direction.

But for small investors interested in the medium to long term and who generally like to set and forget, airline stocks are to be avoided, investment advisers say.

Advertisement: Story continues below
There are too many huge external influences out of an airline's control that can hurt their business, while intense competition is knocking the stuffing out of profitability.

IG Markets institutional dealer Peter Stanhope says the shocking news from Virgin Blue on Friday highlighted the risks involved in airline stocks.

''They are vulnerable to consumer demand, and there's massive amounts of capital involved in an airline, yet they run around trying to get an extra $5 out of each seat from people to watch television - that illustrates the problem,'' he says.

Virgin Blue announced that pre-tax profit for its full-year to the end of June was likely to be between $20 million and $40 million. Three weeks ago the airline said the figure would be between $80 million and $110 million. The new forecast reflects a big loss for the first six months of 2010. Can we really have seen a $60 million negative turnaround at Virgin Blue in three weeks? Apparently yes.

The six interest rate rises in seven months have clobbered consumer confidence. In response, they cut back on discretionary spending, and Virgin Blue, which has 80 per cent of its business in the ''leisure'' market (non-business travel) ended up with an awful lot of empty seats all of a sudden.

The Virgin Blue statement indicates it was V Australia, the new trans-Pacific part of the business, that lost the big bucks. V Australia's fleet expansion options on two more Boeing 777 airlines (its sixth and seventh planes) are now being reviewed, according to the airline's general manager public affairs, Danielle Keighery.

''We are committed to making our international business profitable, ''she says.

''We have also been heavily exposed to the leisure sector and we've highlighted our interest in moving into the corporate market.''

Ms Keighery says Virgin Blue will reveal more about its planned overhaul of its business with its results in August.

For many shareholders, though, Friday's announcement was the last straw. Virgin Blue shares tanked on the news, falling 12¢, or 27.9 per cent, to 31¢ on huge turnover representing more than 10 per cent of the company's issued capital.

The stock touched 30¢ at its worst; eye watering for a company originally floated at $2.25 a share in 2003. Qantas shares initially fell on the news too but regrouped to finish 3¢, or 1.2 per cent, higher at $2.45 after the company reaffirmed its full-year profit forecast of $200 million to $300 million pre-tax.

But even Qantas has hardly set the stockmarket boards alight - the airline was originally privatised at $1.90 a share back in 1995, so has delivered a total 29 per cent return for original investors in 16 years. That's an average - and snail-like - 1.8 per cent of capital growth a year.

Austock senior adviser Michael Heffernan says mum and dad investors should give the airlines a wide berth.

''Why on earth would you want to buy shares in an industry whose business is at the mercy of terrorist attacks, at the mercy of volcanos, is at the mercy of the oil price and so sensitive to consumer confidence?''

''People seem to invest in them when things are going well, but like Virgin Blue's big downgrade shows, the negatives are too much - airlines are OK in the good times, but why take the punt?'':{:{:{

B772

3rd Jun 2010, 00:39

Today RBS Morgans have cancelled their buy recommendation on VB saying buckle up, turbulence ahead.

David75

3rd Jun 2010, 02:00

Would suspect given the recent drops in price of oil/ (and or $AUS) I would expect the hedging/derivatives may have to be marked to market - which may be some of the reason for the drop in guidance.

TBM-Legend

3rd Jun 2010, 04:20

TODAY'S "AUSTRALIAN"

NEW Virgin Blue chief John Borghetti is clearly doing the rounds to reassure analysts after last week's cut to earnings guidance, with Royal Bank of Scotland the latest to meet with the airline's top brass.

RBS analysts Mark Williams and Michael Newbold said in a note this morning that they met with senior Virgin Blue management yesterday and were left “underwhelmed, given the short-term challenges facing the business”.
:eek:
The meeting with RBS came after Macquarie’s Russell Shaw and Sam Thornton dined with Borghetti over lunch on Monday and came up with a similar conclusion, that investors should expect near-term trading conditions for the airline to remain “very challenging”.

Williams noted Borghetti wanted to take the airline in a different direction to his predecessor Brett Godfrey, to streamline operations, focus on the Australian domestic market and increase corporate penetration.

“We see the rationale in this strategy, given Virgin Blue can’t win a battle of the lowest cost base. However, it is likely to add additional cost pressures in the short term as the change in strategy is pursued,” said Williams.

“We believe there is opportunity to capture more corporate customers. However, the question will be whether this will be enough to offset the pressures of the leisure market.”

Virgin last Friday stunned the market with a 75 per cent chop to its annual earnings guidance - its second in a month - and blamed a steep drop in leisure travel as well as a sudden decline in consumer confidence.

Merrill Lynch analyst Kevin O'Connor said this morning that Qantas was also suffering, but was far less exposed as JetStar, which is leisure-market focussed, represented just 9 per cent of the group’s passenger-kilometres, while Qantas had 90 per cent of the corporate market.

O’Connor kept his “buy” on Qantas with a target of $3.

Williams said that, given 80 per cent of Virgin’s business was exposed to the leisure market, “we think profitability will remain challenged over the next 12 months”.

“We believe short-term momentum is against the stock and may push the share price lower,” he said.

inandout

3rd Jun 2010, 07:24

and The Royal bank of Scotland has agreat track record- NOT.

GlobalMaster

3rd Jun 2010, 07:25

According to The Australian in Virgin Blue flags network overhaul | The Australian (http://www.theaustralian.com.au/business/aviation/virgin-blue-flags-network-overhaul/story-e6frg95x-1225874500034)

· “Virgin’s turnaround is dependent on the Delta Joint Services Agreement approval...

But! According to Flight Global in Jetstar inks interline agreement with Air France-KLM (http://www.flightglobal.com/articles/2010/06/02/342651/jetstar-inks-interline-agreement-with-air-france-klm.html)

· Jetstar just inked an interline agreement with Air France-KLM ...

Hang on! Isn’t Delta already in bed with Air France KLM?

Who’s two timing who I wonder. Suspect an older woman just wouldn't put up with it.

Eastwest Loco

4th Jun 2010, 13:11

Where does one draw the line Globalsan.

Sewth Efricin is in bed with QF on codeshare and share frantic flapper exchange with a bucketload of airlines including Oneworld, Skyteam and Star alliance.
SA-083 SOUTH AFRICAN AIRWAYS
ACCEPTS FF ACCOUNT NUMBERS IN THE PROGRAMS LISTED
AC BD* CA CO EK FM JJ JK* KF* LH LX* LY MS
NH NZ* OS OZ QF* SA* SK* SN SQ* TC TG* TK* TP
UA* UL US U0* VS 9W
There they are for our edification.

SAS are also anyones best girl. Following are their points share partners.
SK-117 SCANDINAVIAN AIRLINES
ACCEPTS FF ACCOUNT NUMBERS IN THE PROGRAMS LISTED
AC* BD* BT CA CO DM ET FM JJ JK* KF LH* LO*
LX* MS NH NZ* OS OU OV OZ* PZ QF* QI SA* SK*
SN SQ* TG* TK* TP UA* US* VS WF

The alliances are one thing.

The affiliations are another entirely.

Best all

EWL

PPRuNeUser0161

4th Jun 2010, 23:32

VB are running from the grim reaper, TIGER. They can give up marginal routes that don't make money and Tiger will grab them and make them pay, when things eventually pick up they can't get back in as the door will be slammed shut. The top end is a diminishing market, not the place to aim for.

I think in less than two years VB will need further cash and lots of it or they are gone.! Day trade the stock only.
SN

Mr. Hat

5th Jun 2010, 10:41

No they'll put cheap seats in the back and shaft the tiger. Tiger and J* will fight it out.

Up the front business econ middle low cost at the back.

slice

8th Jun 2010, 11:47

Looks like Tiger and J* are going into a pissing contest. May the Airline with the deepest pockets win!:}

The The

8th Jun 2010, 12:06

Duopoly at the pointy end, duopoly down the bogun end. Love it, harmony at last!

THE ORACLE

10th Jun 2010, 00:41

A check of the ASX website shows BG is still on the board of DJ as an executive director. Does JB then really have a free hand at running the business and making necessary fundamental changes with the architect of their current business plan looking over his shoulder and possibly scrutinizing every decision?

Surely after BG's performance at DJ in which he led them to their current disastrous circumstances, he should have been shown the door by the other board members when he left the top job.

By keeping BG in place as an executive director the investment community could conclude the DJ board is a 'cosy little club' that doesn't want to be overly influenced by 'uncontrolled new blood'. Although BG isn't 'fat' perhaps he remains 'the controller'.

porch monkey

11th Jun 2010, 17:48

Running from Tiger?:rolleyes: Keep telling yourself that Nazi.....

Mr. Hat

12th Jun 2010, 11:57

more like the tiger having a cry every time VB tries to sign up an alliance with anyone delta now anz.

tiger should pay attention to jetstar they're they ones that really want to crossbow it!

Cactusjack

13th Jun 2010, 03:20

Aagh yes. 'The Oracle' wins the award for the most accurate and defined statement in this thread. 10/10.

A check of the ASX website shows BG is still on the board of DJ as an executive director. Does JB then really have a free hand at running the business and making necessary fundamental changes with the architect of their current business plan looking over his shoulder and possibly scrutinizing every decision?

A true statement. Surely nobody thought BG would cut the ties completely to his baby did they ?? BG will be around for a while, consulting, advising, receiving tidy somes of money for his 'so called expert advice'. Perhaps the goal is to see the share price dip below $0.10 per share ??

Surely after BG's performance at DJ in which he led them to their current disastrous circumstances, he should have been shown the door by the other board members when he left the top job.

Sounds good in theory, and would be a positive move for the organisation, but that sort of action is not as easy as it seems when you have somebody who has their tentacles deeply entrenched into the organisation.

By keeping BG in place as an executive director the investment community could conclude the DJ board is a 'cosy little club' that doesn't want to be overly influenced by 'uncontrolled new blood'. Although BG isn't 'fat' perhaps he remains 'the controller'.

Truest statement yet !

CharlieLimaX-Ray

3rd Sep 2010, 07:28

Share price had a bit of a rally over the last week, with some big volumes as well.

In The Australian, they make mention of the four ERJ-170's being sold.

3 Holer

3rd Sep 2010, 07:50

0.39 cents and still climbing. GO you good thing!!!!!:ok:

Cactusjack

3rd Sep 2010, 08:25

Provided there is no short term disaster of some monumental proportion I think you will steadily see the share price rise under JB. I envision it will be gradual over an extended period of time,but it will keep heading north rather than south.Unfortunately previous management direction over an extended period of time has created a mess that needs time to heal. You won't ever see the price back up to is list price of yesteryear, but I reckon if you buy in under $0.50 you might make a couple of dollars down the track..

denabol

3rd Sep 2010, 11:51

Cactusjack,

I'm a VBA shareholder. You won't see the prices of yesteryear as you called it because mate, they gave all the Toll shares away to punters like me at a nominal value of 50cents (and I bought more at 20cents) so the price between the float and the Toll exit means nothing except to people who don't know anything about the stocks history.

If you dig around you'll find the analyst briefings have Borghetti acknowledging Godfrey's achievements and pointing out that the fact that the company did so well out of the flying business compared to Qantas was the strength of the domestic business which earned far more than QF per plane by raking in $127 million in the whole financial year. Most of the turnaround from a loss of $160 million to a PBT of $34 million happened before Borghetti got the gig or even sat in the chair. I think he is doing the right thing fixing the international routes and going for a bigger domestic jet too and the notes my financial advisor sent include confirmation of an international role for the Airbuses as well as Perth within two years. I reckon Borghetti is a good choice to follow up a terrific success by the Godfrey team who weren't like Jetstar getting gifted a billion in Qantas jets and subsidies but did it themselves from the ground up, mistakes and all.

Cactusjack

3rd Sep 2010, 22:24

I'm a VBA shareholder. You won't see the prices of yesteryear as you called it because mate, they gave all the Toll shares away to punters like me at a nominal value of 50cents (and I bought more at 20cents) so the price between the float and the Toll exit means nothing except to people who don't know anything about the stocks history.

I am well aware of the share value, its history and future potential.By nature I dont invest in airlines, never have and never will. However I dont begrudge those who do, each to their own. And history does play a part in future investments, if it didnt then I wouldnt have the money I am sitting on today.

If you dig around you'll find the analyst briefings have Borghetti acknowledging Godfrey's achievements and pointing out that the fact that the company did so well out of the flying business compared to Qantas was the strength of the domestic business which earned far more than QF per plane by raking in $127 million in the whole financial year. Most of the turnaround from a loss of $160 million to a PBT of $34 million happened before Borghetti got the gig or even sat in the chair.

Again, each to their own opinion, however if BG was doing such a great job why were the board pushing him out the door in the final 12 months ?? Anyone who has swallowed the old 'it's time to move on and try new things' line needs their head read.
A CEO riding a launch of over $2.60 per share down to $0.30 per share is a disgrace by any measure (irrelevant of all the 'unpredicatables') that occur in aviation.

I think he is doing the right thing fixing the international routes and going for a bigger domestic jet too and the notes my financial advisor sent include confirmation of an international role for the Airbuses as well as Perth within two years. I reckon Borghetti is a good choice

I agree entirely, JB will turn it around. Again, as you said, he is fixing things. Which brings me back to the point that previous individuals were not doing a very good job.

to follow up a terrific success by the Godfrey team who weren't like Jetstar getting gifted a billion in Qantas jets and subsidies but did it themselves from the ground up, mistakes and all.

Perhaps JQ were gifted by QF, but maybe you have forgotten the circumstances of DJ`s rise to fame ? Backed by Billionaire Branson and the collapse of Ansett is hardly what I call 'doing it tough'. DJ had its 'gifts'.

At the end of the day however, the scene of aviation has certainly changed, and as you said if you bought in to DJ now at the current listing or had bought in at around $0.20 you will make a couple of bucks. Little comfort though for those who were sold a lemon at $2.60. Buyer beware I guess.

flying-spike

3rd Sep 2010, 22:31

Cactus, If you won't invest in airlines I would suggest a few shares in Danish Butter?

Cactusjack

3rd Sep 2010, 22:39

Spike,
Sounds interesting. Are you Dutch my friend ? I have investments in a few portfolios, the bulk being resources and property. However butter is a new concept. I will take that under advisement !

denabol

4th Sep 2010, 22:39

Cactus,

We agree on a number of things. But my gripe is the efforts here in general to rewrite the short history of Virgin Blue to vilify Godfrey. Most of the outstanding result that Borghetti is quoted as praising was made in the 10 months before he took up his role or in the 8 months before he was selected. If Godfrey had been a goose DJ wouldn't have made it this far. I'm not just a shareholder. I have family in the airline. And if it hadn't been for Godfrey a lot of pilots who wanted to come back to Australia would still be eating sand because they would be on a black list. I don't think anyone is perfect, but he had good run, and still owns part of the operation.

virginexcess

5th Sep 2010, 09:41

Make no mistake, Godfrey is a goose, and like all geese, he surrounded himself with other geese.

That is not to deny the fact that he and his gaggle oversaw the massive growth of the last ten years, and is testament to his entrepreneurial skills that he was able to ride the wave.

What we have evidenced over the last 4 years or so is a clear indictment of his management skills. Once the going got tough, they had no ideas, as evidenced by the disastrous introduction of premium, in flight entertainment, and V Australia.

As JB has stated, on it's current trajectory, VB had about 5 years to extinction. Through his knowledge of how the big boy airlines play, and his contacts within the industry he has taken the flying circus and given it a direction that may not ensure a bright future, but gives it a fighting chance.

As an investor, you would be aware that the market is never wrong. Sometimes it may be a bit misaligned, but never wrong. The market voted and it said Godfrey and his gaggle was a liability and he had to go. The market is now cautiously endorsing what appears to be the foundations of a grown ups airline that may be able to compete with serious airlines like Qantas.

Icarus2001

5th Sep 2010, 10:38

BG was right to pitch the idea of VB to RB and his launch timing was perfect, up and running with the wrinkles out by the time Ansett fell over or was pushed.

Certainly the VB he created was not what he expected pre Ansett demise. My humble opinion is that any reasonably competent manager could have built the airline within the vacuum created by Ansett being out of the market.

They were probably playing catch up for 2-3 years just to bring in new airframes and scale up everything. Once that settled down BG had no new ideas that worked. Can anyone point to a stroke of brilliance other that actually starting the operation? Perhaps getting pilots to work for 2/3 of what other 737 drivers were earning in Australia but that was simply leveraging those who wanted to come home.

As mentioned above, JB is in the seat and the share price reflects that the market likes what it sees and hears from JB.

Fair praise for BG, he started it, it was his baby but it eventually needed more skills and experience than he could provide. He has become a very rich man as a result and good luck to him.

denabol

5th Sep 2010, 21:00

I'll repeat the obvious. If we exclude earnings from loyalty programmes Virgin Blue is making twice as much money from airline operations than Qantas and Jetstar combined with fewer planes. Look at the DJ and QF presentations on the ASX site. Take notes. Compare the operational passenger earnings. Talk to your broker.

But I bow to the wisdom of the board. Godfrey was obviously a complete fool and we are all so much smarter and would have driven the airline bust in about four months.

Cactusjack

6th Sep 2010, 11:41

denabol,
If Godfrey had been a goose DJ wouldn't have made it this far
Are you serious?? There are a plethora of geese that have carved out a name for themselves in history then succumbed to their own ego, ambitions, greed or arrogance. You are naive my friend. Try studying these two for starters - Dennis Kozlowski and Jeff Dachis.

And if it hadn't been for Godfrey a lot of pilots who wanted to come back to Australia would still be eating sand because they would be on a black list
So because he hired pilots from 89 that makes him worthy of a knighthood? I think not. I have no disrespect for the pilots he hired, some are good friends of mine, as well as others who didn’t partake in the events of 89. He hired many people from many different airline backgrounds, both near and afar.
I don't think anyone is perfect, but he had good run, and still owns part of the operation
Big deal. He still owns a portion courtesy of a share float of which he was gifted a large chunk. Branson also owns a small piece of the pie even though his take in total has been reported as over $900 million to date. For that kind of return I too would remain ‘part owner’ with a minor portfolio as an outward statement that ‘I have trust and faith in the organization’. What a crock. If you think that because a former executive in a listed company owns a slice that this makes it a sound investment then I would say ‘good luck on your future and past investments’ based on that formula.
But I bow to the wisdom of the board. Godfrey was obviously a complete fool and we are all so much smarter and would have driven the airline bust in about four months
Aagh a sense of humor from the one who is pain! Four months you say? I will give your revered former leader some credit, I doubt it. But who knows what the future would have held under his ongoing direction, only a crystal ball could accurately answer that.
It is time for you to take a denabol and go and relax.

Virginexcess,

What can I say, your posts are accurate in all aspects. Nice to see that ‘somebody is awake at the wheel’.But your masterstroke was this –

As an investor, you would be aware that the market is never wrong. Sometimes it may be a bit misaligned, but never wrong. The market voted and it said Godfrey and his gaggle was a liability and he had to go

touché

icarus2001,
My humble opinion is that any reasonably competent manager could have built the airline within the vacuum created by Ansett being out of the market
Spot on. No need to be humble. Arnold from ’Diff'rent Strokes’ could have turned a dollar out of that stroke of sheer good luck

Fair praise for BG, he started it, it was his baby but it eventually needed more skills and experience than he could provide

Now, I will exercise my own humility. Yes, it was his baby, agreed. But the latter part of your sentence is the painful truth. This was evident by 2005.

flying-spike

6th Sep 2010, 12:13

Hell no. Talk JB into listing himself and I will buy shares in him. High capital growth based on bugger all performance. You can't go wrong. Dip me in honey and throw me to the lesbians if I'm wrong!

skol

7th Sep 2010, 19:41

Since VBA made its move up from around 30c the increase in volume has been significant.
Average vol. for the last few weeks has been about 10m per day, for the last 9 trading days its 50m.

SeldomFixit

8th Sep 2010, 01:54

And for every buyer, there is a seller - wealth is only created from anothers' loss, in this case......:cool:

Red Jet

8th Sep 2010, 03:57

wealth is only created from anothers' lossSounds cute, but a completely specious argument.

Wealth, is in fact created from mutually beneficial exchange of property, ideas and possessions.

porch monkey

8th Sep 2010, 09:46

The fact that the employees trading window is presently open would account for some of the increase in turnover.

skol

8th Sep 2010, 19:05

That wouldn't account for the increase, 63m yesterday. Staff would've had to get them pretty cheap to make it worth their while to sell them at the current price.
Tiger report they've cancelled flights due to a shortage of pilots.

Section28- BE

8th Sep 2010, 21:36

Ex Associated Press via the SMH:

US plans rejection of Delta-Virgin Blue tie up

September 9, 2010 - 7:21AM
Plans by Delta Air Lines and affiliates of Virgin Blue Group to collaborate on flights between the US and Australia have suffered a setback, with the US Transportation Department saying it expects to deny their request.
Delta currently flies only between Sydney and Los Angeles. UAL Corp's United Airlines and Australian carrier Qantas Airways currently dominate the flight schedule between the two countries.
Delta and Australian budget airline Virgin Blue wanted permission to coordinate fares and schedules, and to share money from the flights.
Usually, antitrust laws would block that kind of collaboration, but airlines can get permission in some cases for joint ventures if they can show that consumers will benefit. Australian authorities approved the proposal in December.
However, the Transportation Department said the airlines have not shown that the alliance would provide enough benefits for travelers such as lower fares or increased capacity. Also, the DOT said that Delta and Virgin Blue plan to limit their cooperation to the largest routes between the US and Australia, limiting the benefit for travelers.
The two "have virtually no experience as commercial partners and employ business processes that they admit are not compatible," the DOT order said. "They have only just begun to explore the feasibility of arms-length cooperation, much less the degree of cooperation that requires, or would merit, a grant of antitrust immunity."
The airlines have two weeks to object.
"We strongly believe our proposed alliance with the Virgin Blue Group will be good for consumers," Delta said in a written statement.
"We are reviewing the DOT's tentative order and will respond within the comment period."
AP

Mr. Hat

8th Sep 2010, 22:25

Maybe its time once and for all to close up whats only a loss maker for vb. Can't imagine their balance sheet if BG never bothered with the 777. Or even the EMB for that matter..or live tv.. or premium economy. Amazing the company is still open with all these rubbish loss making ideas. Hopefully JB will "cut the crap".

Tiger report they've cancelled flights due to a shortage of pilots.

Hope they cancel the airline. Why would you want to work for this outfit.

Skystar320

8th Sep 2010, 23:49

at present time this is only a preliminary denial

denabol

9th Sep 2010, 08:06

Sandilands argues that this could see V Australia off the Pacific route and Singapore Airlines in.

Virgin sings the Delta blues while the Singapore girl hums along in waiting – Plane Talking (http://blogs.crikey.com.au/planetalking/2010/09/09/virgin-sings-the-delta-blues-while-the-singapore-girl-hums-along/)

Mr. Hat

9th Sep 2010, 08:10

Yep that'll be it. No US flights no V Australia.

7378FE

9th Sep 2010, 09:01

Maybe its time once and for all to close up whats only a loss maker for vb.

If VA paid pilots 300K a year would that make it a better operation. :rolleyes:

Seems to me that some people here think that if an Australian based airline doesn't pay what QF pays then they shouldn't be allowed to operate. :hmm:

VA will survive operating AUH-SYD (MEL) (BNE)-LAX and probably to Japan with the 777's, and there is no shortage of people to fly them. :D

Also on the cards PER-AUH with VA metal codeshare with EY. :ok:

Mr. Hat

9th Sep 2010, 11:34

Couldn't give a damn what their pilots make. Just basing it on what JB has said "VA loses ALOT of money". "Delta deal will make the world of difference". Then again the Etihad deal might have changed his mind. I don't think he's "in" to losing money.

Sandilands makes some interesting points in his blog.

virginexcess

9th Sep 2010, 12:24

As of the most recent figures, VA is currently profitable on a month by month basis, also Alan Joyce stated on the ABC that Qantas are close to break even on the LA route, so it would stand to reason that VA would be break even or better on the same route, given ticket prices are comparable and VA's cost base would be significantly less than Qantas.

There is little doubt that JB won't stick with VA if it continues to make a loss, but there is every indication at present that genuine sustained profit is not too far off, with or without the Delta deal. A tie up with Delta would just put it beyond doubt for the short term.

VBA Engineer

9th Sep 2010, 12:31

Well then how on earth do they rack up another 42 million dollar loss?

Come on please, this is not hard to see.

Just look at the last 2 annual reports for the company, it is there for all to see.

There is no magic in the last month that now makes it all suddenly break even.

Best options are as stated here many times over many many months:

http://www.pprune.org/dg-p-reporting-points/417038-virgin-blue-cut-domestic-international-routes.html#post5732578 (mhtml:{38D1406E-C961-4254-B87E-AECB29882B5B}mid://00000000/!x-usc:http://www.pprune.org/dg-p-reporting-points/417038-virgin-blue-cut-domestic-international-routes.html#post5732578)

http://www.pprune.org/dg-p-reporting-points/364779-v-aus-how-going-5.html#post4790027 (mhtml:{38D1406E-C961-4254-B87E-AECB29882B5B}mid://00000000/!x-usc:http://www.pprune.org/dg-p-reporting-points/364779-v-aus-how-going-5.html#post4790027)

http://www.pprune.org/dg-p-reporting-points/362854-v-australia-gets-aoc.html#post4730749 (mhtml:{38D1406E-C961-4254-B87E-AECB29882B5B}mid://00000000/!x-usc:http://www.pprune.org/dg-p-reporting-points/362854-v-australia-gets-aoc.html#post4730749)

http://www.pprune.org/dg-p-reporting-points/362854-v-australia-gets-aoc.html#post4730916 (mhtml:{38D1406E-C961-4254-B87E-AECB29882B5B}mid://00000000/!x-usc:http://www.pprune.org/dg-p-reporting-points/362854-v-australia-gets-aoc.html#post4730916)

denabol

9th Sep 2010, 22:24

VBA engineer,

What loss? VBA made around $34 million PBT in the full year, versus a loss of $160 million in the previous year. (That Godfrey guy was such a dill...)

The NPAT was over $20 million. Do you read your engineering sheets with the same degree of accuracy as the company reports?

flamingmoe

10th Sep 2010, 00:59

denabol, he was referring to Voz not the VBA group as a whole. His figure is accurate.

Anthill

10th Sep 2010, 01:39

VBA Engineer the majic could come from the 92% load factor that VA is currently enjoying. The buzz recently from management is that VA has operated IN PROFIT for the last 2 months.

Chin up, old boy :ok:

denabol

10th Sep 2010, 01:57

Go to any newspaper site at the moment and worry a little bit more about your VBA shares. The ACCC has also refused the trans Tasman alliance with Air New Zealand, on a draft basis. I'm going to sit tight and try not to look for the next few weeks.

denabol

10th Sep 2010, 02:00

flamingmoe, OK point taken. But an overall switch from a loss of $160 million to a profit of $34 million in a year when Godfrey was still running the show suggests a bloody good effort to me.

Red Jet

10th Sep 2010, 02:09

Be interesting to see how the thwarted code share arrangements will influence Borghetti's masterplan. Hot on the heels of the DoT announcing its intention to block the DELTA tie-up, the ACCC are now announcing that it intends to block the AirNZ codeshare on the Tasman, and this after PacBro have already given the domestic market in NZ over to AirNZ. The ACCC has further announced its intention to fast track its process in evaluating the consumer impact of the proposed ETIHAD codeshare. I'd be gobsmacked if this deal doesn't get through (but then again - I've had my gob smacked in the past).

airtags

10th Sep 2010, 02:26

denabol - eng is correct Voz not VBH and dare I say it I agree, Godfrey did dosome good things...however....
the Godfrey profit claims (there were many and varied)) were based on all those largely non reportable off balance sheet liabilities that Borghetti to his credit acknowledged when he stepped onto the field. That's also sound management that the market will ultimately back.

It's a tough call by the ACCC today re the Tasman tie up - not a decision that I entirely agree with but I do think the consolidation of VB and a move away from nowhere-land marketing and the fragmented brand entities will be good for the business.

Less of the Bransonesque fluff and back to business tuff if you like! - once the reactive sell down from today pulls up, the view will over time get back to EBIT & ROI performance markers. Under Borghetti I tend to think the group will be been seen in a more positive mode.

The pressure from the ever present bilateral auction is building up momentum and the last thing we need is a local weak/vulnerable RPT aviation sector as our pollies are not smart enough to preclude aviation from the bi-lateral agreements. (Beware paricularly the proposed Mid East agreements that carry the fuel/carbon flag that is like chocolate to governments). For this reason alone I hope Borghetti racks up a few runs wih the market.

The biggest risk to every Driver, CC, or Eng is that which we all have in common - those pirate agreements that send our jobs offshore & bugger everyone's T&C's.
:E AT

flamingmoe

10th Sep 2010, 12:54

The core 737 domestic operation is proven, and is a highly profitable business. But make no mistake, the comical duo of Godfrey/Swift, would have driven it all to ruin inside of 3yrs with their neverending rap sheet of cock-ups.

Changes made thus far to Voz services are a step in the right direction, but JB still has a huge task ahead of him to see VBA out of the woods. I for one, believe (hope) he'll do a good job.

Cactusjack

11th Sep 2010, 10:14

The core 737 domestic operation is proven, and is a highly profitable business. But make no mistake, the comical duo of Godfrey/Swift, would have driven it all to ruin inside of 3yrs with their neverending rap sheet of cock-ups.
Unfortunately some of the morons at DJ put their ego's before business acumen, thats the biggest downfall for DJ.

Changes made thus far to Voz services are a step in the right direction, but JB still has a huge task ahead of him to see VBA out of the woods. I for one, believe (hope) he'll do a good job.
Correct. It will take a little while for Massimo to see the positive results roll through from any of his initiated changes. I still think he has a squirt of Moretein left in the can however, so hopefully he will use it to get rid of some of the last remaining cockroaches.