DJ Profit Drops
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DJ Profit Drops
Virgin Blue's profits plummet
16nov05
BUDGET airline Virgin Blue today said it would continue to look to strengthen its appeal to the business sector as it reported a 33.1 per cent fall in annual net profit.
Virgin Blue reported a net profit of $105.2 million for 2004/05, down from $157 million in the previous year.
The airline also declared a 25 cent final dividend.
After 12 months of consolidation, including cost and productivity initiatives, withdrawal from unsustainable routes and investment in its business traveller strategy, Virgin Blue will continue to focus on improving the quality of its revenue streams," Virgin Blue chief executive Brett Godfrey said.
"We are now well positioned to take advantage of the size, scale, and frequency achieved in our 2003-2004 expansion.
"In the last quarter of 2004-2005 we have brought to fruition a number of significant strategic projects, culminating in the launch of our long considered frequent flyer programme yesterday.
"Looking forward to 2005-2006, our primary focus remains on continuing to develop opportunities in the Australian market, including strengthening our appeal to the business sector, further product innovations and strategic development of our network.''
16nov05
BUDGET airline Virgin Blue today said it would continue to look to strengthen its appeal to the business sector as it reported a 33.1 per cent fall in annual net profit.
Virgin Blue reported a net profit of $105.2 million for 2004/05, down from $157 million in the previous year.
The airline also declared a 25 cent final dividend.
After 12 months of consolidation, including cost and productivity initiatives, withdrawal from unsustainable routes and investment in its business traveller strategy, Virgin Blue will continue to focus on improving the quality of its revenue streams," Virgin Blue chief executive Brett Godfrey said.
"We are now well positioned to take advantage of the size, scale, and frequency achieved in our 2003-2004 expansion.
"In the last quarter of 2004-2005 we have brought to fruition a number of significant strategic projects, culminating in the launch of our long considered frequent flyer programme yesterday.
"Looking forward to 2005-2006, our primary focus remains on continuing to develop opportunities in the Australian market, including strengthening our appeal to the business sector, further product innovations and strategic development of our network.''
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It certainly hasnt hurt their share price at all - it's up over 20%.
Yes, they have a nice shiny new loyalty scheme which is something they claimed was never part of the "Virgin Model or business plan".
It certainly worries institutional investors when the share price rises or falls so sharply.
Ditto with Qantas which is up over 10% in the last week or so.
Either way good to see rising share prices for both.
Yes, they have a nice shiny new loyalty scheme which is something they claimed was never part of the "Virgin Model or business plan".
It certainly worries institutional investors when the share price rises or falls so sharply.
Ditto with Qantas which is up over 10% in the last week or so.
Either way good to see rising share prices for both.
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Potentializing the potency of a Virgin Blue
In order to get ahead and gain solid ground, Virgin Blue needs to give up the silly onboard shenanigans and concentrate on SIA type quality service AND the things that do make a difference. People's aspirations (and their hopes for their children) spring to mind.
Suggestions:
a. To foster an interest in youngsters eventually joining the industry, perhaps offer 10 recorded brownie points for each such person (and members of his immediate family) for each time they travel with Virgin Blue. A target of 1000 points would guarantee a job interview (depending upon other quals) - and an achievement of 1500 points the guarantee of an apprenticeship (in an area of choice). 2000 points would guarantee a job on probation for a year. Not hard to rack up points over the years. From management's point of view, think of the inbuilt loyalty that it would generate. If thought worthwhile, just differentiate the value of each traveller's journey by doing it on a sky-miles basis (e.g. Sydney-Perth 50 points / Sydney- Melbourne 20 points / Sydney-Canberra 10 points etc). Loyalty schemes do work. It just depends what they're premised upon. Business customer loyalty is a very fickle and impermanent erstwhile grab for custom. A top award might be payment of University fees for an aviation degree (4000 points say). 5000 points might qualify a youngster for a Commercial Pilot's training course.
b. Make each ticket issued a weekly lottery entry for a free trip
somewhere.
c. Make each ticket issued a "rights issue" for share ownership. "This ticket entitles the bearer to one share of Virgin Blue stock, redeemable in multiples of ten such tickets"
If bums on seats and load factors make all the difference to profitability, then an investment in non-fickle and longer-term customer loyalty would appear to be worthwhile. That sort of approach would appeal to me and accord with the tactics that the airline's progenitor Richard Branson has always been famous for. No doubt marketing gurus and actuaries would improve greatly upon the above amateurish ideas - but I'm sure you get the idea.
Both my wife and I, after traveling on Virgin Blue, thought that all the comedic giggles were very off-putting. It's all very transparent and conveys a great impression of transient impermanence (as in here today / gone tomorrow). There's such a thing as trying too hard. But building genuine goal-centric familial loyalty might just pay dividends. Everybody has family.... and every parent has goals for their children.
Suggestions:
a. To foster an interest in youngsters eventually joining the industry, perhaps offer 10 recorded brownie points for each such person (and members of his immediate family) for each time they travel with Virgin Blue. A target of 1000 points would guarantee a job interview (depending upon other quals) - and an achievement of 1500 points the guarantee of an apprenticeship (in an area of choice). 2000 points would guarantee a job on probation for a year. Not hard to rack up points over the years. From management's point of view, think of the inbuilt loyalty that it would generate. If thought worthwhile, just differentiate the value of each traveller's journey by doing it on a sky-miles basis (e.g. Sydney-Perth 50 points / Sydney- Melbourne 20 points / Sydney-Canberra 10 points etc). Loyalty schemes do work. It just depends what they're premised upon. Business customer loyalty is a very fickle and impermanent erstwhile grab for custom. A top award might be payment of University fees for an aviation degree (4000 points say). 5000 points might qualify a youngster for a Commercial Pilot's training course.
b. Make each ticket issued a weekly lottery entry for a free trip
somewhere.
c. Make each ticket issued a "rights issue" for share ownership. "This ticket entitles the bearer to one share of Virgin Blue stock, redeemable in multiples of ten such tickets"
If bums on seats and load factors make all the difference to profitability, then an investment in non-fickle and longer-term customer loyalty would appear to be worthwhile. That sort of approach would appeal to me and accord with the tactics that the airline's progenitor Richard Branson has always been famous for. No doubt marketing gurus and actuaries would improve greatly upon the above amateurish ideas - but I'm sure you get the idea.
Both my wife and I, after traveling on Virgin Blue, thought that all the comedic giggles were very off-putting. It's all very transparent and conveys a great impression of transient impermanence (as in here today / gone tomorrow). There's such a thing as trying too hard. But building genuine goal-centric familial loyalty might just pay dividends. Everybody has family.... and every parent has goals for their children.
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a. To foster an interest in youngsters eventually joining the industry, perhaps offer 10 recorded brownie points for each such person (and members of his immediate family) for each time they travel with Virgin Blue. A target of 1000 points would guarantee a job interview (depending upon other quals) - and an achievement of 1500 points the guarantee of an apprenticeship (in an area of choice). 2000 points would guarantee a job on probation for a year. Not hard to rack up points over the years. From management's point of view, think of the inbuilt loyalty that it would generate. If thought worthwhile, just differentiate the value of each traveller's journey by doing it on a sky-miles basis (e.g. Sydney-Perth 50 points / Sydney- Melbourne 20 points / Sydney-Canberra 10 points etc). Loyalty schemes do work. It just depends what they're premised upon. Business customer loyalty is a very fickle and impermanent erstwhile grab for custom. A top award might be payment of University fees for an aviation degree (4000 points say). 5000 points might qualify a youngster for a Commercial Pilot's training course.
Those silly kids building hours in the NT to become pilots or those silly apprentice engineers have it all wrong. All you need do is have mummy and daddy fly you to lavish holidays and the points will guarantee you a job!
Why bother studying hard at school to get into a uni course when you can take a few more holidays and be assured of a scholarship???? Absolute bluddy genius!
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Not a bad idea.
Beats just allowing Virgin Blue going down the tubes (which is where it's headed fast - thanks to Patrick, Toll and others.).
Branson couldn't care less. He's milched it for all it's worth.
I give it about two years before it starts into becoming a distant memory unless their marketeers come up with some gimmick that will rescue it from its doldrums.
Anybody running that airline will be more interested in what allows the airline to [first] survive and then perhaps prosper, than concerning themselves with the hard row to hoe that typifies the typical OZ ascendancy to the left (or right) seat of an RPT jet. And so that should be too.
Beats just allowing Virgin Blue going down the tubes (which is where it's headed fast - thanks to Patrick, Toll and others.).
Branson couldn't care less. He's milched it for all it's worth.
I give it about two years before it starts into becoming a distant memory unless their marketeers come up with some gimmick that will rescue it from its doldrums.
Anybody running that airline will be more interested in what allows the airline to [first] survive and then perhaps prosper, than concerning themselves with the hard row to hoe that typifies the typical OZ ascendancy to the left (or right) seat of an RPT jet. And so that should be too.
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Yeah, the share price has really been on a roller-coaster ride of late.
From $1.48 a few weeks ago up to $1.85 only late last week.
Now down to $1.56. Thats a lot of volatility which is always dangerous, particularly in such a short period of time.
I agree that they are going to have to do something to increase both yield, pax loadings as well as profit.
A certain degree of innovation may be required but I dont think Mr Godfrey is up to the task.
They are looking at business class as well as their new loyalty scheme which is something both Branson and Godfrey described as the problem with other airlines as well as being discriminatory - something that was never part of the "Virgin Culture" (well, not for Australia anyhow!).
Now we have Ozjet biting at the heals of everyone else and certain punters claiming there is a large enough market to sustain four different airlines!
I'd hate to be managing those peoples financial affairs.
Agree that VB will have to do something pretty amazing or risk oblivion - it is going nowhere at the moment and institutional investors/analysts have given it the thumbs down for the foreseeable future.
From $1.48 a few weeks ago up to $1.85 only late last week.
Now down to $1.56. Thats a lot of volatility which is always dangerous, particularly in such a short period of time.
I agree that they are going to have to do something to increase both yield, pax loadings as well as profit.
A certain degree of innovation may be required but I dont think Mr Godfrey is up to the task.
They are looking at business class as well as their new loyalty scheme which is something both Branson and Godfrey described as the problem with other airlines as well as being discriminatory - something that was never part of the "Virgin Culture" (well, not for Australia anyhow!).
Now we have Ozjet biting at the heals of everyone else and certain punters claiming there is a large enough market to sustain four different airlines!
I'd hate to be managing those peoples financial affairs.
Agree that VB will have to do something pretty amazing or risk oblivion - it is going nowhere at the moment and institutional investors/analysts have given it the thumbs down for the foreseeable future.
