View Full Version : Virgin Atlantic

7th Oct 2001, 11:53
Does anyone have a view on whether VS have a viable strategy to keep flying if - as is reliably predicted - cash will dry up within a month?

I understand that SQ are unable by law to increase their 49% holding and that RB's shares are secured to Lloyds TSB to cover the Virgin Mobile venture and other subsidiary company activities.

Cash has already been generated from aircraft refinance and a massive rotable spares refinance through Royal Bank, so where will the cash come from to keep the airline afloat??

7th Oct 2001, 15:15
Perhaps you could let us know who your 'reliable' informant was? And what evidence there is for such a sweeping statement? And tell me, what's the point of refinancing an aircraft fleet that's entirely leased, with the exception of 5 Classics which are going anyway (that'll be 9 Classic retired in just a few months - a huge capacity cut).
As far as I'm aware, the amount of VS which is used to secure loans for the mobile system is just 50m, and I would have thought that RB could find alternative security for that if he needed to. I believe SQ's investment in VS required a large proportion of the investment to be held in cash against just this sort of eventuality. Obviously, it can't last for ever, but that is why VS has massively cut its exposure to the vulnerable parts of the US market and is now heavily pushing the South African and Far East routes, which remain profitable.
The game for the next few months for any airline is to not support unprofitable routes, push the ones that work, and gradually resume services as confidence returns. You surely don't think that VS, BA or any other reasonably well-run airline would continue to accept losses that they were experiencing on many of the US routes so that they could just watch the airline fail?
Confidence, and passengers, will return. The airlines, like VS, that have reacted quickly and decisively to limit the effects of the crisis will still be here to profit when the good times come back - and my betting is that by August next year we'll be wondering what much of the fuss was about.

The Guvnor
7th Oct 2001, 19:02
Reports coming out of Belgium indicate that Virgin is looking at buying Sabena. Highly unlikely, given their cash position and the existence of VEX (which Branson memorably described as his "worst business investment, ever". I suspect it's simply Belgian Minister Rik Daems tying to dig himself out of the SN accountability hole... :D :eek: :D

Scroggs - the telecoms sector - and especially the mobile one - is about as buoyant as the airline industry at present. Atlantic Telecom folded on Friday, and there will be more to come - including some very big names indeed. So no, Branson won't be able to bail himself out of Virgin Mobile in the near future - and all of the other Virgin business are hocked to the hilt as well.

It's cashflow that keeps them afloat, and the drying up of this life-blood will bring the whole house of cards crashing down. Remember Slater Walker in the 1970s? Exactly the same thing there...

The Far Eastern markets have always been hit, and yields are low on the South African markets, especially for pax originating in South Africa. The rapidly sinking rand isn't helping, either. Nigeria is costing money, as is India.

Regrettably, I suspect that by next August we'll be trying to remember who Virgin Atlantic were!

7th Oct 2001, 19:15
For Christ's sake Guvnor, CHEER UP! Stop talking the whole industry down and pontificating to everyone on this site.
You'll cause NORMAL users to leave pprune and slash their wrists.

Silver Tongued Cavalier
7th Oct 2001, 19:29
Lots of rather expert armchair economists on this thread!!

If any one man can pull Virgin through, Branson can, have you read his Autobiography, he's been through many closer shaves thn this!

The Prisoner - Pilots falling asleep in curries in LA, sounds like my perfect nightstop!

7th Oct 2001, 19:35
Virgin and bmi will merge. bmi is struggling to find pax for it's 330's - major white elephant- but has the jewel in the crown, a domestic and European feed to long haul. VS pull out of LGW and concentrate on LHR; bmi pull off the MAN routes, give the 330's to VS and you have one mega company capable of taking on BA at LHR. get real chaps, VS wont go down without a fight, they are far too good.

7th Oct 2001, 19:48
With the Guv's usual thoroughness, he spends most of his day skimming news websites and posting whatever bad news he can find on this site, seemingly with the express intent of depressing the employees of the various airlines he puts down. His bad taste reached its peak with his somewhat prurient posting about the suicides of two Ansett pilots.
Guv, your understanding of the airline business seems to be vicarious and superficial, gleaned entirely from the reports of other non-expert commentators. While rubbishing everyone else's efforts you continue (after 2 years or more) to claim to be well on the way to starting an airline of your own with some old Tristars from Delta's scrapheap. Have you any idea what all this badmouthing is doing to your credibility, in the unlikely event that you are genuine? Who the hell would work for you? Don't answer now; you can tell me face to face at the Xmas Gatbash, where I will be pleased to look over your plans and give them the same treatment you give everyone else's.
Now, Virgin is going through some pain, like all other trans-atlantic airlines. Unlike many, it is in the process of dramatically changing the shape of its business to take account of the current realities, and to place itself well for the upturn that will inevitably come. As a result, nearly 40% of its aircrew are to lose their jobs - for the moment. No doubt Guv is eagerly awaiting the day when he can 'report' the suicides of some of our people, and the death of our airline. Well, it ain't gonna happen, son. Sit on it and swivel, Guv. I wouldn't **** on you if you were on fire :mad:.
Prisoner - if your criteria for who you fly with is based on gossip both in and out of the newspapers, you are a sad individual. If you hadn't noticed, Virgin stands for an active, light-hearted, and fun approach to life. God forbid that a pilot should go for a curry (did you see him fall asleep?), or that there should be sex between consenting crewmembers :o . When you find an airline where no such events happen, let the rest of us know. It's probably run by the Vatican!

7th Oct 2001, 19:56
The scary thing is Virgin has said very little since Sept 11th. They have laid off a lot of staff. Before September 11th we knew the North American market was the one keeping Virgin alive, from a recent pond crossing I can assure you that loads are as low as I have ever seen them, which can't be good news. Also think Virgin had most of its fleet grounded for a couple days while the US closed its airspace. That must have been tough on them!

7th Oct 2001, 20:19
I have to agree with Scroggs, Guvnor get a life! In a time, like we have never seen before, where so many are facing the prospect of losing their jobs, stop all this doom and gloom, It seems to me like u are a frustrated aviator, that is, someone who has never made it! Now **** off and get a life u sad individual.Maybe even attempt ur PPL.
Prisoner, you to, stop living at home with mummy, and join The Guvnor, otherwise try and find ur self a girlfriend.

[ 07 October 2001: Message edited by: cocorico ]

[ 07 October 2001: Message edited by: cocorico ]

The Guvnor
7th Oct 2001, 20:20
Silver Tongued Cavalier - try reading the unauthorised biography by Tom Bowers - considerably more enlightening!

Scroggs - you're sounding rather bitter, me old mate! :D :D

Perhaps you couldn't give a monkeys about your colleagues in thius business, but I do. The reason that I posted the article about the suicide of the Ansett captains was to highlight the high levels of stress that people are going through at present - and to push forward the case for a support mechanism that I had previously mooted on an earlier, similar, thread.

Exactly how many startups have you been involved with? I suspect none from your comments. Try asking some of those on here that have been involved - including IFR and Groundhog - how long it takes. Four years in the case of Groundhog's last venture. And yes, especially in the current market, those ex DL L15s would have been absolutely perfect - ultra-low capital cost, falling fuel prices etc ... one can afford to park them (total cost: $600 per month) unlike a certain UK airline of your ken that is now bitterly regretting its investment in bright shiny new A340s and 744s that the lessors don't want back - and which cost them well over $1m per month whether or not they fly! The simple reason that the Classics were parked was that VS could afford to do it - but it couldn't afford early termination of the leases on its more modern aircraft, which is what it wanted to do.

I shall await your prediction as to when this upturn is due to arrive with great interest! :rolleyes: :eek: :rolleyes:

7th Oct 2001, 20:24
Congratulations on your 3000th post Guvnor.

7th Oct 2001, 20:27
I would like to take this opportunity to remind you of a few things.

Virgin Atlantic people (and there lawyers) DO read this site (let me assure you of that one).
Sir Richard Branson does not, and will not tolerate anyone (regardless of size) saying untruths (indeed lies) about any of his businesses.
Anyone doing so will be pursued by his legal team (and they're vast).

Anyone thinking of posting scandelous rumours about Sir Richard, or Virgin Atlantic make sure your source is as solid as a rock. PPRuNe will happily pass over your information upon leagl request.

Happy days.

7th Oct 2001, 21:38
In describing Mr Bransons' legal team as vast, surely you are not suggesting that these fine people are obese? ;)

7th Oct 2001, 22:57
Why do some people constantly try and undermine companies for their own amusement.
Guvnor you seem to have become the airline industries prophet of doom. Your posts some of which are informative can also undermine companies and start rumours that are far from the truth.
Where did you get some of your info on Virgin, yes we do have problems, but doesn't every airline at the moment.

As I believe the redundancies made by Virgin are for the good of the airline to survive, in the current climate. Would some of you like to see Virgin go under and for many good people to lose their income or should we all start sticking together and working to get through this.
Every company has problems with management and some of Virgins problems may have come from within, but we can all learn from our mistakes and hopefully Virgin can come through this and be a leaner hopefully more efficient airline.
I like a lot of others within Virgin do not know how long the company may go on for, it could be Years or Months. I like to think it will be the former.
I know this is a rumour network, but lets get sensible about this, 7000 employees depend on Virgin for their monthly income.

Before you all start on me yes this is my first post and I feel very strongly about my company as some of you might about your own.
In times like these VS,BA,BD and all the other UK airlines should be getting together and helping each other survive or none of us may have jobs next year.

7th Oct 2001, 23:23
what does this button do...i take it u didnt read the very enlightening series of articles in the daily mail re mr branson and what is he gonna do sue everyone who says something he doesnt like..yeah right.The general opinion seems to be that most of his businesses are kept afloat by the cash generated from the north atlantic routes....if these go tits up whers the cash gonna come from?
ps richard if u read this and its not correct please accept my humblest apologies..NOT

The Guvnor
7th Oct 2001, 23:43
Those who have been around a bit might well recall a certain Robert Maxwell who also had the habit of slapping lawsuits on everyone that said anything that displeased him (such as "Oi! You're not supposed to nick the pension fund!"). He wasn't so much concerned about winning the cases but rather keeping the stories sub judice and I suspect that this may well be the case here.

Having been a very minor cog in the British Atlantic wheel I can affirm from first hand experience that he does, indeed, royally screw people when given the opportunity - his treatment of Randolph Fields was disgraceful.

If they want to get hold of me, my details are in my profile! :rolleyes: :eek: :rolleyes:

7th Oct 2001, 23:52
For I a first post superb,straight to the point no messsing about.

Right Way Up
8th Oct 2001, 01:48
Guvbore, would you please *@ off. I am sure most of us are sick and tired of your postings. Please correct me, but I am sure you posted the downing of a Cathay 747 yesterday (the post has been erased). You are a has-been that trawls the internet and then posts other peoples opinions. There are thousands of people whose lives have turned to **** recently and you just sit in front of your computer pontificating. Scroggs is worth a million of you, he has done more in aviation than you have had wet dreams about.
P.S. If Guvnors parents are reading this, please can you rescind his internet rights :D :D :D :D

The Guvnor
8th Oct 2001, 02:11
Right Way Up - actually, I deleted that thread myself when it became obvious that it was a hoax. Don't shoot the messenger, dear boy!

Right Way Up
8th Oct 2001, 02:23
Guvbore, sorry to hear you suffer from premature reaction!

Norma Spartz
8th Oct 2001, 02:35
The Prisoner You wouldn't happen to be the originator of that Virginlies website would you? That might explain your outburst and obvious hostility towards VS crews. For those that don't remember the incident, the guy in question had alledgedly assaulted a VS Cabin Crew and was subsequently arrested; he has spent a lot of energy since trying to throw dirt at RB and Virgin - methinks he doth protest too much! :cool:

8th Oct 2001, 12:39
For all the critics and those who worry about where these stories come from, firstly try reading the National Press. If RB wants to sue the pants off the Sunday Telegraph Business Section Page 3 reporter then thats up to him

I am not going to name well placed city bankers who have their finger close to the pulse nor worried VS personnel who are surely in the know.

Its not wnat you know but who you know....

8th Oct 2001, 17:31

Would you please remove your head from your arse, not only does your breath stink, but your talking crap. The Nigeria route, is very profitable. The queues are fantasticly long, and more importantly the front is full. Apparently there is now an almost permanent encampment of VS limos and limo bikes down at Amaco and Shell. The loads on the route have slowed, but the from end remaines unaffected.

8th Oct 2001, 17:53
Would be better if it was only VS wrestling with huge problems but unfortunately the problem is worldwide and so if you take say 20 or 30% load factors out of a hugely financially geared industry it means that most airlines become become worse than worthless but in fact a liability to the owners.Where do you redeploy capacity and why would leasing companies tear up contracts.Reducing staff and operations seems the only way to survive but that in itself introduces huge extra costs and so the cycle will worsen until confidence returns.No it,s not just VS - we are all in an industry in for medium term pain and the accent will be on retaining present market or obtaining another airlines loadings rather than expansion of ones own services.Let,s hope confidence returns sooner rather than later.

The Guvnor
8th Oct 2001, 18:09
V50 - had a lot of experience with Nigeria, have you? I have - I first lived out there in the mid 70s.

Let me tell you something you're obviously unaware of - a very large number of tickets on that route are sold for Naira, and CBN isn't exactly the world's fastest when it comes to expatriating funds. Also, the fare on the ticket is rarely the fare actually paid - especially by corporates.

LGW-LOS was BCal's most profitable route - unfortunately Sir Adam had to spend a great deal of his time down there negotiating the conversion of blocked monies into hard currency.

As a consultant, you should be well aware that hiccups in cashflow can be potentially disastrous when walking a line as fine as this one is.

8th Oct 2001, 20:05
Most of VS's traffic on that route originates in the UK from just 3 companies. They also account for most of the freight, shipping tools and office stuff. The main concern is if those 3 companies change thier policies. For the moment the route remains very profitable. The biggest problem is NoShows in Economy. If the Front and Belly pay in the UK and the back dont - well its still profitable.

8th Oct 2001, 20:55
AT last someone who sees the big picture

The Guvnor
8th Oct 2001, 21:36
Yes, V50 - but what did I just say about special deals for corporates and the currency of payment? It's legal for any tickets of Nigerian residents (including expats) to be paid for in NGN - and surprise surprise, that's exactly what happens! In order to secure market share, BA frequently turns a blind eye to that rule and allows its Nigerian offices to issue PTAs for the head office wallahs to come down to Nigeria - again, paid for in NGN. I have no doubts VS does the same - and with any Nigeria Airways tie-up that's going to mean a much bigger chunk of change in the CBN.

Incidentally, I hear that the Woolly Pully is headed off to parts Asiatic with the begging bowl out.

How's this for a scenario:

RB: "Hey man, I'm brassic. Lend me a few million until the market recovers. Unfortunately, I can't give you any more shares since you're at the legal max - but hey, what's a few mill between friends?"

CCK: "Ah, so sorry. No spare cash. Let's talk about the money you already owe us and when you will be paying it back!"

RB: "Ummmm"

CCK: "OK, I have solution. You give us the whole of Virgin Blue so we can set up our Australian operation without having to bail out bloody Ansett and I'll bung you few bob"

RB: "But that's the only part of the biz that's doing well!"

CCK: "Of course! You think we want to take over any more of your dodgy operations? We've got a billion cans of Virgin Cola we can't shift!"

RB: "Er...."

CCK: "OK, you no wanna talk about that, no problem. Let's talk about something else. Like the clause in our agreement about no co-mingling funds with other group companies, and the accounting relationships of VA, Voyager, Plane Handling, Virgin Training, Virgin Spares, etc etc with companies in the BVI, Turks and Caicos and Caymans; and their relationships with V2, Virgin Mobile, Virgin Finance etc!"

RB: "Err, um, er, ... where do I sign?"

Note: The above does not refer, or impute to refer in any way that any individuals with the initials 'RB' or 'CCK' have had or necessarily will have this conversation in the future.

8th Oct 2001, 21:45
Thanks -

9th Oct 2001, 02:57
GUVNOR, go get a life, instead of spending every second of ur boring life on pprune this site would be so very much better!! Come try living in the real world. :o

9th Oct 2001, 16:04
Hi there, just want to return to the fact that VS definately depending on the North Atlantic - Airline Business etsimates an exposure of 75% based on OAG data which makes Virgin together with AerLingus an endangered species when it comes to revenues
from this segment.
Good luck out there. silversurfer

9th Oct 2001, 17:16
The Guv is entitled to his opinion, we do live in a democratic country.

That said, I'm also sick of reading what he has to say. I sometimes escape to Airliners.net and, ****** me, he's on there too.

Guv.. Do you have a full time real job or do you, as others have suggested, trawl other websites all day long and post your endless opinions to the rest of us. Please let me know and maybe we could consider a job swap.

9th Oct 2001, 19:54
The Gulf News
Tuesday, Oct 9, 2001

High-flying British tycoon and owner of Virgin airline, Sir Richard Branson, yesterday said he did not want to buy bealeagured Sabena, but instead wanted to acquire all the routes the Belgian airline had to pull out of.

"We don't want to buy Sabena, but we're trying to step into all the routes Sabena has pulled out of because they've gone bankrupt," Sir Richard told Gulf News. He was here to open the first Virgin Megastore in the Gulf - at Dubai's Deira City Centre.

Sir Richard said he was working with the Belgian Government. "We are in discussion with them. We'll know in two weeks what happens then".

American Airlines and Sir Richard were on Sunday named as two possible saviours of the Belgian airline now flying on the edge of collapse - affected as other airlines are by the steep fall in travelling public after the attacks on U.S.

Commenting on the affect on travel trade, Sir Richard said the worst-hit were trans-Atlantic carriers where travel may have dropped by up to 30 per cent - and could take longer than the 15-18 months it took for the travelling public to come back after the Gulf War.

Though against a state bail-out, Sir Richard was an even stronger opponent of a distorted playing field - created by the $18 billion in aid provided to U.S. airlines by the American Government.

Stressing that Virgin has not asked for state aid, Sir Richard thought that to maintain a level playing field, such aid could be given to trans-Atlantic carriers despite European Union Transport Commissioner, Loyola de Palacio, on Sunday ruling out such bail-outs.

"In most circumstances, governments should not be involved in supporting private airlines or companies. Private capital should be able to stand on its own feet".

"However, some governments are putting a lot of money into their airlines - American Airlines, United Airlines, Continental .... - they've been given $18 billion by America.

"Our load factors are down by as much as them (U.S. airlines). So there should be a balancing of books of carriers flying across the Atlantic.

"It is up to the government to decide. We haven't asked, but the (UK) government told us they'd make sure British trans-Atlantic carriers would not suffer any more than U.S. carriers," Sir Richard said.

He, however, was against providing state aid to short haul airlines.


9th Oct 2001, 22:49
Quote,'bmi is struggling to find pax for it's 330's-Major white elephant' unquote. Sorry Paul but bmi's loads have been excellent recently . Currently averaging 70-75% load factor plus an average of 11,000 kgs of cargo per flight.Not too bad given the current climate.
In fact ex MAN it's only bmi and Delta pulling the loads across the Atlantic.
Sorry all for going slightly 'off piste'.

10th Oct 2001, 07:12
Clicked on this thread to read about Virgin, and all I see is ***** coming out of the Guv!!! I suggest that someone sends him a picture of a naked L1011 and when he opens it, a mother ****er big **** you in the ass virus chews up his computer and promptly turns itself into a karoke machine!

10th Oct 2001, 10:35
I have to say that all the bitching and backbiting between various folk spreading lies and false rumours about the state of various airlines is only contributing to the public's unwillingness to fly.

So SHUT THE F*CK UP if you don't have something rather more positive to contribute. Good luck to Virgin Atlantic, BA, britmidlandishbmi (or whatever the daft name is nowadays) and all other long haulers badly affected by the current terrorist induced downturn.

Indiana Jones
10th Oct 2001, 11:06
Silkman, there are other airlines that are currently flying to the U.S. from Manchester, some major scheduled airlines,..so your statement is incorrect.

Cornish Jack
10th Oct 2001, 17:27
I concur. Our Scottish encumbrance would seem, in his other guise of Ceilidh on Airliners.net, to have found a little helpmeet in 'Iainhol'. Their joint blathering has finally irritated me enough to post there. I can't be bothered to waste any more time on him/them so I'll just repeat it here....
"Absolutely fascinating!! Here we have two industry EXPERTS (Ceilidh being the self-styled CEO of a non-existent airline and Iainhol being a student/bartender) giving us their deeply considered opinions of the ACTUAL, FOR REAL accomplishments of a man who has managed to do more in the average month than these two wazzocks could manage in a lifetime.
I don't know (or care) what Iainhol's agenda is - other than making utterances from his fundamental orifice, but the other half of this doom-laden pair is similarly verbose and equally irrelevant in his other personna on Pprune as 'The Guvnor'.
What's my case in trying to put this pair of prats into perspective? Well, just that I have been in the PROFESSIONAL aviation business for close to FIFTY years and have worked for both BA and latterly Virgin. I don't think that in all of that time I have heard such continuous drivel spouted with such an unjustified air of authority as has issued forth from these two - and from Ceilidh/The guvnor, in particular. It just makes me realise that the oft quoted dangers of the internet come, not from the perils of pornography but from the inanities published by the untutored."

10th Oct 2001, 18:02
'A picture speaks a thousand words..


[ 10 October 2001: Message edited by: RVR800 ]

Picture is a bit too large for the page... edited it down to a url reference.

[ 10 October 2001: Message edited by: Sick Squid ]

Old Scrotum
10th Oct 2001, 18:27
I suppose there is no chance of the Guvvenorr and his chum 411A going on a holiday to Afganistan and give the rest of us a break from their ramblings. Either that or a winter holiday in Nigeria as he knows and loves it so well! :rolleyes:

10th Oct 2001, 18:36
How about leaving the Guv bashing alone and get this back to the Virgin Atlantic discussion.

Does anyone think the limited bail out offer by Europe will be done by the UK Government? I suspect the poloical departments are pushing that one pretty hard

10th Oct 2001, 19:59
guys for all your bleating about the guv no one forces you to read his posts so i would think its somewhat self inflicted :) and on the subject of virgin dont forget rb is no angel :)