Toll grits teeth as VB shares head south
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Just checked Etrade and indeed it has been updated.
Interesting to note QF are at 100.6%, but with a higher earnings stability.
Rex has by far the best with D/E at only 6%!
Interesting to note QF are at 100.6%, but with a higher earnings stability.
Rex has by far the best with D/E at only 6%!
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Virgin Blue to cut flights
June 13, 2008 03:25pm
Article from: AAP
VIRGIN Blue has announced a $50 million package of cost savings and capacity cuts to help offset surging jet fuel prices.
The initiatives are the first outcomes of an ongoing review monitoring global fuel prices, which equate to 35 per cent of the company's cost base.
Virgin Blue sees its current financial year fuel bill rising above $500 million, up 21 per cent on the prior year.
"It's not a case of planning interim measures to offset a spike in the cost of fuel - all airlines must come to terms with a new reality in our industry,'' Virgin Blue chief executive Brett Godfrey said in a statement.
Virgin said effective immediately it will raise airfares by an average of $5 across 55 per cent of its Australian domestic routes.
There also will be an immediate salary freeze for all management positions in the new fiscal year.
"No staff redundancies are necessary as a result of these initiatives,'' Virgin said.
Virgin said other measures include cutting flights and re-routing.
"Virgin Blue will cease its once-weekly Sydney - Proserpine service effective July 2008, however daily connecting services through Brisbane will remain,'' Virgin said.
Virgin will also stop flying its thrice-weekly Darwin to Melbourne direct service, effective from August.
This route would be serviced instead via a daily service through Brisbane, Virgin said.
The airline said it would not reduce services on Trans-Tasman, Pacific Islands and domestic New Zealand routes operated by its Pacific Blue subsidiary.
"Boeing 737 services operated by Polynesian Blue, Virgin Blue's joint-venture airline with the government of Samoa will not be affected,'' it said.
Virgin said the removal of four aircraft from the Australian domestic market would result in a six per cent reduction in planned capacity growth for the next financial year.
It also said it would re-examine loss-making services in the domestic market and look to identify better-performing, new or uncontested markets
June 13, 2008 03:25pm
Article from: AAP
VIRGIN Blue has announced a $50 million package of cost savings and capacity cuts to help offset surging jet fuel prices.
The initiatives are the first outcomes of an ongoing review monitoring global fuel prices, which equate to 35 per cent of the company's cost base.
Virgin Blue sees its current financial year fuel bill rising above $500 million, up 21 per cent on the prior year.
"It's not a case of planning interim measures to offset a spike in the cost of fuel - all airlines must come to terms with a new reality in our industry,'' Virgin Blue chief executive Brett Godfrey said in a statement.
Virgin said effective immediately it will raise airfares by an average of $5 across 55 per cent of its Australian domestic routes.
There also will be an immediate salary freeze for all management positions in the new fiscal year.
"No staff redundancies are necessary as a result of these initiatives,'' Virgin said.
Virgin said other measures include cutting flights and re-routing.
"Virgin Blue will cease its once-weekly Sydney - Proserpine service effective July 2008, however daily connecting services through Brisbane will remain,'' Virgin said.
Virgin will also stop flying its thrice-weekly Darwin to Melbourne direct service, effective from August.
This route would be serviced instead via a daily service through Brisbane, Virgin said.
The airline said it would not reduce services on Trans-Tasman, Pacific Islands and domestic New Zealand routes operated by its Pacific Blue subsidiary.
"Boeing 737 services operated by Polynesian Blue, Virgin Blue's joint-venture airline with the government of Samoa will not be affected,'' it said.
Virgin said the removal of four aircraft from the Australian domestic market would result in a six per cent reduction in planned capacity growth for the next financial year.
It also said it would re-examine loss-making services in the domestic market and look to identify better-performing, new or uncontested markets
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What... about VB, freeze on management salary
, routes, crew lay-offs
, PB/Poly?
Those frames could go to my friends at Polynesian/PB IF they had the crew
but they are also just about to experience another mass resignation IF the murmur of a payrise knockback is true... (Another resigned yesterday... what happens when all the duds gather, to run a company
)
Is Branson going to buy up on the shares, at this price?
, routes, crew lay-offs, PB/Poly?Those frames could go to my friends at Polynesian/PB IF they had the crew
but they are also just about to experience another mass resignation IF the murmur of a payrise knockback is true... (Another resigned yesterday... what happens when all the duds gather, to run a company)Is Branson going to buy up on the shares, at this price?
Last edited by Capt_CheeseDick; 13th Jun 2008 at 08:41.
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Those frames could go to my friends at Polynesian/PB...
Yep they could sure be utilized on half a dozen new runs while also increasing heavily needed capacity/frequency around the Pacific! Crew and conditions are issues.
Capt Cheese : Sir Richard is probably circling right now but are Toll willing to unload at such low value?
Yep they could sure be utilized on half a dozen new runs while also increasing heavily needed capacity/frequency around the Pacific! Crew and conditions are issues.
Capt Cheese : Sir Richard is probably circling right now but are Toll willing to unload at such low value?
Bums on seats
'Bout time they started looking at sectors that aren't paying.
Now look at the bums on seats and how much they're paying.
What about those RED seats, mostly empty, sector after sector.
Maybe if they gave value for money for the RED seat they would get some takers.
Come on guys, get with the programme.
It's not working, stop dreaming and just fix it.
Talk about flogging a dead horse.
Now look at the bums on seats and how much they're paying.
What about those RED seats, mostly empty, sector after sector.
Maybe if they gave value for money for the RED seat they would get some takers.
Come on guys, get with the programme.
It's not working, stop dreaming and just fix it.
Talk about flogging a dead horse.
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What about those RED seats, mostly empty, sector after sector.
Maybe if they gave value for money for the RED seat they would get some takers.
Maybe if they gave value for money for the RED seat they would get some takers.
I find the way Virgin worded the capacity reduction as being OZ domestic while making it clear Pac Blue wouldn't be dropped interesting. It hints at further Pac Blue growth, (but the issues around crewing are well known here). The more traditional LCC format of Pac Blue does give it some room to undercut AirNZ.
Now that the Virgin Blue 738 and Pac Blue 738 differ in terms of IFE or not and red seats or not (ie have different cabin configs) and NZ cabin crew to pax ratios allow 1:50, I'm wondering if Pac Blue will reconfig the front half of the cabin to get an extra row of seats (eg remove 1 row of blue zone, drop seat pitch to 30" and remove front screen).
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Just out of curiosity, if you send four A/C OS but as reported by the ABC news tonight expect no job losses, um, four Aircraft = 2 full crews a day= longer stand down time?? or ????
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They're already short of crew for the existing network, sick and Leave coverage plus arriving aircraft (Emb etc). There is/has been a constant stream of training going on for some time.
Heavy Cargo
You clearly have no idea
The CRJ and the Emb are two totally different beasts and the pax appeal of the Emb is very high.
The Emb will allow VB to enter markets that are uneconomical for a 144 seat 737, or unaccessible because the 737 cant operate into the airfield.
The 104 seat 190 will be a good substitute on some trunk routes at quieter times, maximising profit.
I reckon it is a better business proposition than a one of a kind Belfast, a couple of foreign registered 727's and some gas guzzling 737-200's.
If Heavylift was such a great proposition why dont they take the aeroplanes off the Philipines register and set up the AOC here? They have missed one opportunity when they shifted off the Sierra Leone register.
You clearly have no idea
The CRJ and the Emb are two totally different beasts and the pax appeal of the Emb is very high.
The Emb will allow VB to enter markets that are uneconomical for a 144 seat 737, or unaccessible because the 737 cant operate into the airfield.
The 104 seat 190 will be a good substitute on some trunk routes at quieter times, maximising profit.
I reckon it is a better business proposition than a one of a kind Belfast, a couple of foreign registered 727's and some gas guzzling 737-200's.
If Heavylift was such a great proposition why dont they take the aeroplanes off the Philipines register and set up the AOC here? They have missed one opportunity when they shifted off the Sierra Leone register.
Teresa Green, you have picked up an interesting point... 4 aircraft to go, but no crew loss. In fact, right now on the 737, we have 2 command courses (at various stages) going through & there is no plan to stop them. I think something else is going on here. What about surplus 737's being redeloyed on Pac Blue routes out of Australia? ... that would free up PB aircraft for route development out of NZ, and allow expansion of their domestic operation...without PB having to deal with what are now "hybrid" aircraft. And as someone else pointed out, they can't get enough pilots to run PB's current ops, let alone expand.
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Virgin said the removal of four aircraft from the Australian domestic market would result in a six per cent reduction in planned capacity growth for the next financial year.
With another 16 E-jets and another 2 737's due to arrive in the 2008-2009 fiscal year and only 4 737's to depart there will be growth in the next year so no crew losses but looks like plenty of new crew required.
Cheers .
With another 16 E-jets and another 2 737's due to arrive in the 2008-2009 fiscal year and only 4 737's to depart there will be growth in the next year so no crew losses but looks like plenty of new crew required.
Cheers .
In my opinion the E-Jet is a very safe bet. As Dehavillanddriver posted, it can and now will be used where the 737 can't make money. If oil prices remain high I can see more 737's going back to their leasing companies over the next couple of years and being replaced by the E-Jets.
I liken it to the Qantas 767/737 combo...ie 767's used on major trunk routes whereas 737 used on smaller and off-peak routes, and since Virgin has a smaller domestic share than Qantas I can see the E-jets supplementing the 737. I know this is a simplistic point of view.
If things improve soon, then we'll see the E-Jet do what it was intended to do....open up new routes otherwise we'll start to see them do say Syd-Mel during the middle of the day etc.
I liken it to the Qantas 767/737 combo...ie 767's used on major trunk routes whereas 737 used on smaller and off-peak routes, and since Virgin has a smaller domestic share than Qantas I can see the E-jets supplementing the 737. I know this is a simplistic point of view.
If things improve soon, then we'll see the E-Jet do what it was intended to do....open up new routes otherwise we'll start to see them do say Syd-Mel during the middle of the day etc.
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Nah, you don't get it DHD. HC has said VB will go tits up anyway. That's why Heavy Lift bought Oz Jet!! So they can slide right on in afterwards. Just think how much money them luvly 737 200's will make for them!!
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Turbantime and Tourismman
You guys are dreaming....and clearly you know nothing about airline economics. In competitive markets the key to success is having the lowest 'unit costs' and unit costs roughly equate to how many seats you have to sell, the fixed costs per seat (monthly lease rate or not, accruals or not, insurance, etc.) and the direct costs per seat (fuel, crew, maintenance, ramp and enroute charges, etc.). Unit Cost is the basis for the margin you can charge per passenger in order to make a profit and in competitive markets margins are squeezed very tightly through competitive mechanisms.
Qantas through the CityFlyer program is operating a mix of mostly wholly owned widebody and narrow body aircraft on a mix of long and short haul sectors using sophisticated yield management tools to minimise their 'unit costs' and maximise profits. Jetstar and Tiger and at the regional level REX does the same with an even lower cost base.
Virgin's fleet is leased and not owned which when it comes to low unit costs is a big MINUS and because Virgin's fleet seats fewer passengers than their competitors (NG at 155 seats, EJet 170 at 78 seats, EJet 190 at 109 seats, A320 at 177 seats, 767 at 269 seats, A330 at 250 to 293 seats, 747 416 seats), Virgin's Unit Costs will always be much higher than the competitor's and when this is combined with the double whammy of historically high fuel prices, Virgin is operating in a very dangerous region of it's performance envelope.
If Virgin puts up prices to ease the cost burden (as announced on Friday), it's competitors can afford to reduce prices (courtesy of lower unit costs) and keep them 'on the ropes' until something major occurs. Unfortunately in Australia there are many historical precendents for this, starting with Compass Airlines, then Southern Cross Airlines and finally Ansett and globally the financial press has very recently reported the failure of a significant number of airlines due to this phenomenon!
As a further confirmation of the magnitude of this problem, earlier this evening 'ninemsm' listed a story heralding what could well be the catastrophic failure of the airline industry in the U.S. due to fuel price induced insolvencies. Virgin's announcement on Friday shows they are only 'fiddling at the edges' of their problems. Time will tell what happens next in Australia!!
You guys are dreaming....and clearly you know nothing about airline economics. In competitive markets the key to success is having the lowest 'unit costs' and unit costs roughly equate to how many seats you have to sell, the fixed costs per seat (monthly lease rate or not, accruals or not, insurance, etc.) and the direct costs per seat (fuel, crew, maintenance, ramp and enroute charges, etc.). Unit Cost is the basis for the margin you can charge per passenger in order to make a profit and in competitive markets margins are squeezed very tightly through competitive mechanisms.
Qantas through the CityFlyer program is operating a mix of mostly wholly owned widebody and narrow body aircraft on a mix of long and short haul sectors using sophisticated yield management tools to minimise their 'unit costs' and maximise profits. Jetstar and Tiger and at the regional level REX does the same with an even lower cost base.
Virgin's fleet is leased and not owned which when it comes to low unit costs is a big MINUS and because Virgin's fleet seats fewer passengers than their competitors (NG at 155 seats, EJet 170 at 78 seats, EJet 190 at 109 seats, A320 at 177 seats, 767 at 269 seats, A330 at 250 to 293 seats, 747 416 seats), Virgin's Unit Costs will always be much higher than the competitor's and when this is combined with the double whammy of historically high fuel prices, Virgin is operating in a very dangerous region of it's performance envelope.
If Virgin puts up prices to ease the cost burden (as announced on Friday), it's competitors can afford to reduce prices (courtesy of lower unit costs) and keep them 'on the ropes' until something major occurs. Unfortunately in Australia there are many historical precendents for this, starting with Compass Airlines, then Southern Cross Airlines and finally Ansett and globally the financial press has very recently reported the failure of a significant number of airlines due to this phenomenon!
As a further confirmation of the magnitude of this problem, earlier this evening 'ninemsm' listed a story heralding what could well be the catastrophic failure of the airline industry in the U.S. due to fuel price induced insolvencies. Virgin's announcement on Friday shows they are only 'fiddling at the edges' of their problems. Time will tell what happens next in Australia!!
Last edited by THE ORACLE; 14th Jun 2008 at 10:13.