Virgin Blue Results
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Virgin Blue Results press Release
Taken from sydney morning herald
Virgin Blue uncertain on outlook
Discount airline Virgin Blue has reported a slight drop in net profit for the first half of 2004/05 and says its outlook remains uncertain.
Virgin Blue posted a 1.8 per cent drop in net profit to $63 million for the half year ended September 30, 2004.
Revenue was up 27.6 per cent to $786.9 million.
Virgin did not declare a dividend for the period.
In commentary on its performance Virgin Blue said weakened yields, record fuel prices and increased domestic competition had overshadowed the introduction of new capacity.
"The outlook remains uncertain," Virgin Blue said.
"Yield is expected to remain under pressure and below last year's levels.
"While fuel continues to be volatile and at record prices, Virgin Blue remains exposed to further increases in fuel prices that may not be recoverable through fare increases."
Virgin Blue said it carried more than six million passengers in the half year, an increase of 39 per cent on the first half of 2003/04.
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The airline said its yields had dropped 12 per cent, primarily due to the company investing in growing capacity but also due to a "highly competitive environment".
Virgin Blue's Revenue Passenger Kilometres (RPKs) were 7.4 billion, up 44 per cent, and Available Seat Kilometres (ASKs) were 9.6 billion, up 58 per cent.
Its cost per ASK was down 17 per cent on the previous first half to 7.26 cents.
Virgin Blue chief executive officer Brett Godfrey said that despite the tough revenue environment "Virgin Blue's cost base continues to be the lowest in the country".
"Our 7.26 cents per ASK includes the increasingly high fuel costs we have borne for the past six months and reflects the company-wide commitment to keeping our cost base low," he said.
The airline's total operating expenses grew 31 per cent on the previous first half to $697 million.
"The average cost per barrel for Jet fuel has increased 46 per cent compared to September last year," Virgin Blue said.
"The Company reconfirms it has limited hedging in place for the remainder of its 2005 financial year fuel requirements at around US$30 per barrel and has no fuel hedging cover in place beyond the 2005 financial year.
"Other key cost increases were in airport charges, navigation and station operations as well as labour and staff costs."
Virgin Blue increased capacity on the key Sydney-Melbourne-Brisbane business routes by 23 per cent in the first half of 2004/05 and boosted capacity on other capital city routes by 39 per cent.
Some services, including the Sydney-Canberra run, were cancelled because they were unprofitable.
Its domestic operations retain around a third of the market, it said.
International operator Pacific Blue continued to grow in the period, the airline said, with recently started flights to Fiji and Vanuatu meeting expectations and despite continuing competition and increasing rival capacity on Trans-Tasman routes
Discount airline Virgin Blue has reported a slight drop in net profit for the first half of 2004/05 and says its outlook remains uncertain.
Virgin Blue posted a 1.8 per cent drop in net profit to $63 million for the half year ended September 30, 2004.
Revenue was up 27.6 per cent to $786.9 million.
Virgin did not declare a dividend for the period.
In commentary on its performance Virgin Blue said weakened yields, record fuel prices and increased domestic competition had overshadowed the introduction of new capacity.
"The outlook remains uncertain," Virgin Blue said.
"Yield is expected to remain under pressure and below last year's levels.
"While fuel continues to be volatile and at record prices, Virgin Blue remains exposed to further increases in fuel prices that may not be recoverable through fare increases."
Virgin Blue said it carried more than six million passengers in the half year, an increase of 39 per cent on the first half of 2003/04.
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The airline said its yields had dropped 12 per cent, primarily due to the company investing in growing capacity but also due to a "highly competitive environment".
Virgin Blue's Revenue Passenger Kilometres (RPKs) were 7.4 billion, up 44 per cent, and Available Seat Kilometres (ASKs) were 9.6 billion, up 58 per cent.
Its cost per ASK was down 17 per cent on the previous first half to 7.26 cents.
Virgin Blue chief executive officer Brett Godfrey said that despite the tough revenue environment "Virgin Blue's cost base continues to be the lowest in the country".
"Our 7.26 cents per ASK includes the increasingly high fuel costs we have borne for the past six months and reflects the company-wide commitment to keeping our cost base low," he said.
The airline's total operating expenses grew 31 per cent on the previous first half to $697 million.
"The average cost per barrel for Jet fuel has increased 46 per cent compared to September last year," Virgin Blue said.
"The Company reconfirms it has limited hedging in place for the remainder of its 2005 financial year fuel requirements at around US$30 per barrel and has no fuel hedging cover in place beyond the 2005 financial year.
"Other key cost increases were in airport charges, navigation and station operations as well as labour and staff costs."
Virgin Blue increased capacity on the key Sydney-Melbourne-Brisbane business routes by 23 per cent in the first half of 2004/05 and boosted capacity on other capital city routes by 39 per cent.
Some services, including the Sydney-Canberra run, were cancelled because they were unprofitable.
Its domestic operations retain around a third of the market, it said.
International operator Pacific Blue continued to grow in the period, the airline said, with recently started flights to Fiji and Vanuatu meeting expectations and despite continuing competition and increasing rival capacity on Trans-Tasman routes
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Ansett Mark 3 here we come!
Increasing costs
further product enhancements.
And now a regional!!!!
Surely shareholders would be more impressed by a return on their investment than a bigger trainset for Brett to play with.
I hear BAE may have some 146's up for lease.....
Increasing costs
further product enhancements.
And now a regional!!!!
Surely shareholders would be more impressed by a return on their investment than a bigger trainset for Brett to play with.
I hear BAE may have some 146's up for lease.....
whispers around the traps of a purchase of a significant regional airline
Skywest chief executive Scott Henderson has also held discussions with Virgin Blue executives but those were termed more a "courtesy call" than serious discussions.
Courtesy call
Expect to see F100's in Virginblue livery with "operated by Skywest" titles by the doors .
http://www.pprune.org/forums/showthr...hreadid=101317
DJ737
The Roo Rooter
that would be the end 
please, please keep Ryanair away from Australia and Virgin Blue 
Oh and forget the unions MOL hates them...Sprucegoose
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Hang on a minute, am I reading this wrong?
Virgin's total revenue, is less than the Qantas Profit??
Cheers, HH.
Virgin's total revenue, is less than the Qantas Profit??
Cheers, HH.
Thread Starter
Virgin Blue Results press Release
Quite possibly. After all, from memory QF Catering & Holidays (when combined) had a greater profit (in one of the recent Qantas full year results) than Virgin Blue as a whole...
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I dont know if we could really compare the qantas result
to the virgin Howard.
I am neither Q nor Dj (and I hope both do well for everyone working at both) but from an outsider who views many trading companies I would have to say this is a very good result under the current ecconomic conditions.
Virgin isnt/hasnt pretended to be the size of qantas at any stage.
For a company that didnt EXIST 4 years ago, Now has 50 odd aircraft, 4000 odd employees, 34% of the australian domestic market, has made a $62 million dollar profit in the first six months and is on coarse to reach the $140 odd million doallar forecast it said by the end of the year (X-mas rush to come), it isn't bad.
There are not many companies in the world in any industry that have grown 400% in three years and stayed in the black.
Also lets not forget Qantas too operate on a much higher knife edge. As an investor I am much more worried about how Q results will fare if the open skies agreements really do open up.
I.E If singapore start running to LA which Q have a virtual monopoly on and make much of there profit as well Vigin Atlantic and others start getting more rights through to OZ from the UK and other europe ports.
As long as DJ look at each route and continue to make decisions based on route profits I think they should be find.
Especially now they are clearing out the dead wood management. I am sure Corrigan is only biting time until Godfrey is sailing into the sunset.
Well done to the guys and girls there. I hope you continue to prosper
to the virgin Howard.
I am neither Q nor Dj (and I hope both do well for everyone working at both) but from an outsider who views many trading companies I would have to say this is a very good result under the current ecconomic conditions.
Virgin isnt/hasnt pretended to be the size of qantas at any stage.
For a company that didnt EXIST 4 years ago, Now has 50 odd aircraft, 4000 odd employees, 34% of the australian domestic market, has made a $62 million dollar profit in the first six months and is on coarse to reach the $140 odd million doallar forecast it said by the end of the year (X-mas rush to come), it isn't bad.
There are not many companies in the world in any industry that have grown 400% in three years and stayed in the black.
Also lets not forget Qantas too operate on a much higher knife edge. As an investor I am much more worried about how Q results will fare if the open skies agreements really do open up.
I.E If singapore start running to LA which Q have a virtual monopoly on and make much of there profit as well Vigin Atlantic and others start getting more rights through to OZ from the UK and other europe ports.
As long as DJ look at each route and continue to make decisions based on route profits I think they should be find.
Especially now they are clearing out the dead wood management. I am sure Corrigan is only biting time until Godfrey is sailing into the sunset.
Well done to the guys and girls there. I hope you continue to prosper
Last edited by PureRisk; 17th Nov 2004 at 11:12.
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Thurs "Sydney Morning Herald"
Virgin flying into headwind
By Scott Rochfort
November 18, 2004
Virgin Blue has warned that it faces a year of uncertainty, despite the airline rebounding from its humiliating August profit warning to post a first-half net profit just shy of last year's.
Three months after warning its pre-tax profits were down 22 per cent on the year, Virgin beat most expectations yesterday by reporting a 2 per cent dip in net profits to $63 million for the six months to September 30.
Beating consensus analyst forecasts of a $58 million result, Virgin credited the further reduction in its operating costs for what its chief executive Brett Godfrey said was a "fair result".
Thanks to the strengthening dollar and the volumes of scale from its much larger fleet, Virgin said its costs had dropped from 7.73c to 7.26c per available seat kilometre (ASK) on the year.
But in light of plans by Qantas and its offshoots Jetstar and QantasLink to increase the size of their fleets, Mr Godfrey warned Virgin could still face further pricing pressure in the months ahead after already reporting a 12 per cent dip in yields on the year.
"Yield pressures are expected to continue," he said. "We do not believe that for the full year yields will recover to [2003-04] levels."
Mr Godfrey, however, confirmed the airline had managed to bump up its higher-yielding "fully flexible" fares.
Virgin shares, after rising 21 per cent in the three weeks before the result, rose 6c to $2.09 in the lead-up to yesterday's profit announcement on hopes of a much improved outlook for the airline. But they quickly slumped to $1.90 before recovering again to close 2c lower at $2.01, after the airline also warned its fuel bill would increase $100 million for the full year.
While noting Virgin's cost base was well below that of Jetstar's, Mr Godfrey said rising fuel costs would bump up operating costs for the second half.
But in one major heartening sign for investors, Mr Godfrey said there were signs Virgin was starting to "soak up" the additional 58 per cent capacity it put in the market in the year to September 30, with load factors heading back above 80 per cent in October.
In light of criticisms Virgin had expanded its fleet too fast for demand to catch up, Mr Godfrey said it was a result of the airline wanting to "fortify ourselves in the market as the country's second carrier".
In a bid to capture a higher proportion of feeder traffic from international airlines flying into Australia, Mr Godfrey said Virgin was upgrading - and even considering replacing - its Open Skies IT system so it could "interline" with the systems of other airlines. It is estimated that 15 per cent of Qantas's domestic traffic comes from inbound feeder traffic. At present, Virgin's only code-share agreements are with United and Virgin Atlantic.
Virgin also said its New Zealand-based Pacific Blue airline had made a small profit for the half.
Mr Godfrey declined to discuss any plans by Virgin to enter the Asian market or establish a frequent flyer scheme.
Virgin spokesman David Huttner said rumours about Virgin making a possible takeover bid for the regional airline Rex were "baseless".
========================================
Thurs "The Australian"
Costs put pressure on Virgin
Steve Creedy, Aviation
November 18, 2004
VIRGIN Blue faces a clouded second half as it battles volatile fuel prices, rising charges by monopoly airport and navigation providers and an uncertain revenue growth caused by tough domestic competition.
The airline foreshadowed a rise in some fares as it undertakes an across-the-board review aimed at reversing a sharp 12 per cent fall in yields in the six months to September 30.
The warnings came as the airline posted a $63 million net profit after tax for the six months to September 30, down 2 per cent, despite a 28 per cent increase in revenue from $617 million to $787 million.
The big drop in yields stemmed from a 58 per cent boost in capacity as the carrier brought in planes to shore up its 33 per cent market share against increased competition from Qantas's low-cost offshoot, Jetstar.
The increase in capacity also saw load factors fall 7.3 percentage points to 77 per cent.
"Yield pressures are expected to continue," chief executive Brett Godfrey said. "We do not believe that for the full year yields will recover to financial year 2004 levels."
Overall, the Virgin chief described the profit as "a fair result, a good result in many ways" in the wake of a 22 per cent fall in pre-tax profit for the first four months of the half.
"That's been achieved despite a material increase in fuel, a material increase in capacity in the market from ourselves, Qantas and Jetstar, and also in an environment where yields have declined materially," he said. "On that basis we're pretty happy on where we were."
Analysts, many of whom had predicted a bigger fall in profits, welcomed the result. "Virgin Blue has weathered a difficult period remarkably well," said the Centre for Asia Pacific Aviation's Peter Harbison. "As long as the economy remains strong, as indicators suggest it will, Virgin should be well equipped to handle the future."
Yesterday's results included a 17 per cent reduction in unit costs to 7.26c per available seat kilometre as Virgin benefited from the strengthening dollar, scale and productivity gains.
The airline's cash position improved markedly to a record $520 million as passenger numbers for the half rose 39per cent to 6.2 million. The debt to equity ratio improved from 82 per cent at September 30 last year to 63 per cent.
Other good news came from international unit Pacific Blue and the airline's Blue Room lounges, all of which edged into the black.
About 35 per cent of Virgin's costs are in US dollars and the airline has hedged its currency exposure to cover a fall in the Australian dollar for the rest of the financial year.
However, it is not well hedged and estimates that continuing record fuel costs will add almost $100 million to the full-year bottom line, despite the introduction of fuel surcharges.
Mr Godfrey said airport charges had also risen from 5 per cent of costs in 2001 to 15.1 per cent today and were costing the airline an additional $150 million. He renewed calls for the federal Government to step in and re-regulate airport charges in the wake of average 115 per cent increases over the past 18 months.
Virgin has completed its initial domestic expansion and is in a consolidation phase, with net growth of just two aircraft planned next year, but continues to look at opportunities overseas.
Mr Godfrey refused to comment on the airline's plans for Asia, but CAPA said an impending deal in Macau could see the carrier gain access to the huge Chinese market.
Virgin has been talking to Air Macau about providing services to bring Chinese gamblers to the resort city.
============================================
Virgin flying into headwind
By Scott Rochfort
November 18, 2004
Virgin Blue has warned that it faces a year of uncertainty, despite the airline rebounding from its humiliating August profit warning to post a first-half net profit just shy of last year's.
Three months after warning its pre-tax profits were down 22 per cent on the year, Virgin beat most expectations yesterday by reporting a 2 per cent dip in net profits to $63 million for the six months to September 30.
Beating consensus analyst forecasts of a $58 million result, Virgin credited the further reduction in its operating costs for what its chief executive Brett Godfrey said was a "fair result".
Thanks to the strengthening dollar and the volumes of scale from its much larger fleet, Virgin said its costs had dropped from 7.73c to 7.26c per available seat kilometre (ASK) on the year.
But in light of plans by Qantas and its offshoots Jetstar and QantasLink to increase the size of their fleets, Mr Godfrey warned Virgin could still face further pricing pressure in the months ahead after already reporting a 12 per cent dip in yields on the year.
"Yield pressures are expected to continue," he said. "We do not believe that for the full year yields will recover to [2003-04] levels."
Mr Godfrey, however, confirmed the airline had managed to bump up its higher-yielding "fully flexible" fares.
Virgin shares, after rising 21 per cent in the three weeks before the result, rose 6c to $2.09 in the lead-up to yesterday's profit announcement on hopes of a much improved outlook for the airline. But they quickly slumped to $1.90 before recovering again to close 2c lower at $2.01, after the airline also warned its fuel bill would increase $100 million for the full year.
While noting Virgin's cost base was well below that of Jetstar's, Mr Godfrey said rising fuel costs would bump up operating costs for the second half.
But in one major heartening sign for investors, Mr Godfrey said there were signs Virgin was starting to "soak up" the additional 58 per cent capacity it put in the market in the year to September 30, with load factors heading back above 80 per cent in October.
In light of criticisms Virgin had expanded its fleet too fast for demand to catch up, Mr Godfrey said it was a result of the airline wanting to "fortify ourselves in the market as the country's second carrier".
In a bid to capture a higher proportion of feeder traffic from international airlines flying into Australia, Mr Godfrey said Virgin was upgrading - and even considering replacing - its Open Skies IT system so it could "interline" with the systems of other airlines. It is estimated that 15 per cent of Qantas's domestic traffic comes from inbound feeder traffic. At present, Virgin's only code-share agreements are with United and Virgin Atlantic.
Virgin also said its New Zealand-based Pacific Blue airline had made a small profit for the half.
Mr Godfrey declined to discuss any plans by Virgin to enter the Asian market or establish a frequent flyer scheme.
Virgin spokesman David Huttner said rumours about Virgin making a possible takeover bid for the regional airline Rex were "baseless".
========================================
Thurs "The Australian"
Costs put pressure on Virgin
Steve Creedy, Aviation
November 18, 2004
VIRGIN Blue faces a clouded second half as it battles volatile fuel prices, rising charges by monopoly airport and navigation providers and an uncertain revenue growth caused by tough domestic competition.
The airline foreshadowed a rise in some fares as it undertakes an across-the-board review aimed at reversing a sharp 12 per cent fall in yields in the six months to September 30.
The warnings came as the airline posted a $63 million net profit after tax for the six months to September 30, down 2 per cent, despite a 28 per cent increase in revenue from $617 million to $787 million.
The big drop in yields stemmed from a 58 per cent boost in capacity as the carrier brought in planes to shore up its 33 per cent market share against increased competition from Qantas's low-cost offshoot, Jetstar.
The increase in capacity also saw load factors fall 7.3 percentage points to 77 per cent.
"Yield pressures are expected to continue," chief executive Brett Godfrey said. "We do not believe that for the full year yields will recover to financial year 2004 levels."
Overall, the Virgin chief described the profit as "a fair result, a good result in many ways" in the wake of a 22 per cent fall in pre-tax profit for the first four months of the half.
"That's been achieved despite a material increase in fuel, a material increase in capacity in the market from ourselves, Qantas and Jetstar, and also in an environment where yields have declined materially," he said. "On that basis we're pretty happy on where we were."
Analysts, many of whom had predicted a bigger fall in profits, welcomed the result. "Virgin Blue has weathered a difficult period remarkably well," said the Centre for Asia Pacific Aviation's Peter Harbison. "As long as the economy remains strong, as indicators suggest it will, Virgin should be well equipped to handle the future."
Yesterday's results included a 17 per cent reduction in unit costs to 7.26c per available seat kilometre as Virgin benefited from the strengthening dollar, scale and productivity gains.
The airline's cash position improved markedly to a record $520 million as passenger numbers for the half rose 39per cent to 6.2 million. The debt to equity ratio improved from 82 per cent at September 30 last year to 63 per cent.
Other good news came from international unit Pacific Blue and the airline's Blue Room lounges, all of which edged into the black.
About 35 per cent of Virgin's costs are in US dollars and the airline has hedged its currency exposure to cover a fall in the Australian dollar for the rest of the financial year.
However, it is not well hedged and estimates that continuing record fuel costs will add almost $100 million to the full-year bottom line, despite the introduction of fuel surcharges.
Mr Godfrey said airport charges had also risen from 5 per cent of costs in 2001 to 15.1 per cent today and were costing the airline an additional $150 million. He renewed calls for the federal Government to step in and re-regulate airport charges in the wake of average 115 per cent increases over the past 18 months.
Virgin has completed its initial domestic expansion and is in a consolidation phase, with net growth of just two aircraft planned next year, but continues to look at opportunities overseas.
Mr Godfrey refused to comment on the airline's plans for Asia, but CAPA said an impending deal in Macau could see the carrier gain access to the huge Chinese market.
Virgin has been talking to Air Macau about providing services to bring Chinese gamblers to the resort city.
============================================
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It would seem that a LOT of people like to comapre DJ's profit to that of the ENTIRE QAINTASS empire profit - well, that's like comparing apples and Roo turds - not a whole hell of a lot in common!
If someone could post the p&L for QDom and Jetsare, on a PER SECTOR basis, I believe it would be a much more fortuitous comparison. Even a direct P&L comparison between Jetscare and DJ. Jetscare was afterall set up as direct competition to DJ.
Now, the rumours about the SIA SYD-LAX. Yep, that's going to happen, and pretty soon. How about Qantas' reaction when SIA also start doing the "Empire routes" in direct competition to them?
Of course Jetscare Asia was only permitted to operate by the Singapore government (major shareholder in SIA) after considerable route negotiation with QF, involving Australia as well...
If someone could post the p&L for QDom and Jetsare, on a PER SECTOR basis, I believe it would be a much more fortuitous comparison. Even a direct P&L comparison between Jetscare and DJ. Jetscare was afterall set up as direct competition to DJ.
Now, the rumours about the SIA SYD-LAX. Yep, that's going to happen, and pretty soon. How about Qantas' reaction when SIA also start doing the "Empire routes" in direct competition to them?
Of course Jetscare Asia was only permitted to operate by the Singapore government (major shareholder in SIA) after considerable route negotiation with QF, involving Australia as well...
Sprucegoose
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Pure Risk and RTA,
I am not trying to compare the two airlines/companies, more to point out the difference in magnitude between the two.
Despite the size of the Virgin Empire around the world and the many wins they are having in this region, VB is still only a small player in the larger scheme of things.
Even with their absolutely amazing gains in the last four years, there still is a long way to go and many more battles, on lots of different fronts to overcome.
Cheers, HH.
I am not trying to compare the two airlines/companies, more to point out the difference in magnitude between the two.
Despite the size of the Virgin Empire around the world and the many wins they are having in this region, VB is still only a small player in the larger scheme of things.
Even with their absolutely amazing gains in the last four years, there still is a long way to go and many more battles, on lots of different fronts to overcome.
Cheers, HH.
