Merged: Virgin Blue Share Price - how low can it go and for how long?

[roamingwolf]

I don't think that there is any chance of VB successfully selling off V Oz.

I dunno about that mate.Theres another airline in OZ that has a rep for buying competitors if they look like a threat.
Mini Me buys V Australia if not the whole box and dice with VB then he's got J* mark II with lower crew costs and gets rid of the competitor in OZ as well as on the pacific money run and he gets some new 777 aircraft as a sweetener for little more than sweet FA.

he keeps VB and V australia in their paint scheme like Gerry Harvey has with Harvey Normans and Domayne.He owns both and they compete with each other and help each other to keep other chains from starting up and Gerry pockets the dough and laughs all the way to the bank.Thinking about it I reckon Gerry harvey should run VB instead of BG.

[roamingwolf]

That might be why QF raised $500 million the other day,so they can buy VB.

[Wod]

It is politically impossible for QF to pick up Virgin. The pollies would legislate to achieve "competition".

Air New Zealand might be interested, though.

And they have form

[Skystar320]

They have form, but a bad form....

Bite more than they can chew and run everything into the ground....

[Wingspar]

As someone high up in QF told me years ago,

It's in QF's interest to have sound competition.

[Lookleft]

Air New Zealand have already tried to buy Virgin and had "Beardie Branson" rip the cheque up on TV (even though he had agreed to the deal). One of the sticking points was the Virgin brand and what would happen to it if the purchase went ahead.

[roamingwolf]

It is politically impossible for QF to pick up Virgin

In politics there is nothing impossible.What if VB and V Australia were going under?
No only lasts about 5 min in politics.

[indamiddle]

singapore airlines could buy 49% of va with 51% owned by an aussie entity, similar to the allco job on the failed qf deal. it would still have to go by the FIRB. if successful, sometime down the track they could purchase a significant, but not majority, share of the aussie entity. effectively they would control va. the only problem here is that they already own 51% (or is it 49%?) of virgin atlantic which has been a problem child and a money pit for many years.

[Section28- BE]

Twas it not the FIRB that knocked them buying the second half of AN on the head, with some arrangement to contain the ANZ bit onshore ???. Resulting in that B@stardized ANZ investment/arrangement.

[tsalta]

VB takeover

In the current environment it is highly unlikely there are any possible purchasors for a failing airline around. The last thing airlines need at the moment is additional capacity and debt. VB has plenty of both.

I hate being so down on VB as I, like most have friends there and would love to see it survive. However, their half yearly statement was a joke.

After going over the half yearly report several times I still can't see where the 60 million underlying profit is. I can only find about 1.1 million of profit.

I would be very concerned if I was working there.

tsalta

[airtags]

tsalta that's right - why would anyone pay $500 for a loaf of bread.

VB has a net asset value of almost zero and given the debt burdens ahead anyone with a desire for aviation would be better off waiting for the liquidators auction rather than paying a premium for a low value product.

The iceberg is the off balance sheet liabilities - VB is so highly geared it has side deals on almost every aspect of its operations and it's these 'hidden'/non reportable liabilities that would wipe out any residual asset value.

The really sad part is that the CEO appears to be ignorant of the bad wx - ....the interview transcripts from this week's pressers are testimony to a lack of fiscal responsibility and governance. (loved the bit about it being the media's fault!!!!)

That said I'm sure Friday's Oz will be full of praise and puff after the cockatoo island p*ss up tomorrow night - [which those attending should thank all the virgin crew who have been forced to take leave without pay and give up their wages to cover the costs for the party]

[Section28- BE]

Sale and Leaseback- 4 x 737-800's

I note, VB announced to the market today (Mon, 2 March 09) the Sale and Leaseback of 4 Hulls- B737-800's.

1 x "late 2008" and 3 x 4th Quarter 2009 Deliveries.

Sold to BOC Aviation (100% owned by the Bank of China).

Rgds
S28- BE

[abc1]

TSALTA, don't take this the wrong but from your posts I can only conclude that your fiscal knowledge seems more of a ''copy and paste job'' on facts rather than an informed opinion.
The current environment is ripe for M&A's and not when the market is at its peak as the recently demonstrated take overs or attempts ranging from from RAMS to Alcoa or Hard Yakka to name a few.
VB has a positive cash flow,market share, brand and it posted a profit.Its turnover increased.Why then didn't the share price slump to near zero like Centro for example?
The investment strategy of management, on the other hand, well I am not informed so I will refrain from speculating as that in itself just feeds the rumor mill, especially with glee and hope they get it wrong.
Risky yes but with risk comes reward depending on what your risk reward ratio is based on.

[ANstar]

Both Singapore Airlines and Air NZ have done similar things in the past 6 months.

Normally airlines will sell and leaseback for a couple of reasons

- Cash flow (Which isn't DJ's issue as they have positive cash flow)
- To meet capital requirements for new aircraft or investments (poss the 777's)
- To realise the current value of the aircraft/ this is done especially when the market price of said aircraft may decline significantly in the near future.

It is usually banks that do these deals and they structure them in such a way that they get numerous tax breaks etc as well.


Both Air NZ and Singapore Airlines have done similar deals in the last 6 months. And airlines like BA have done in the past as well.

Flight Global also hinted that they could be looking to defer frames 5-7

[pylet]

Are these aircraft in addition to those parked for the 8% reduced capacity mentioned last week:

The eliminated aircraft, believed to be B737s, will be used "as operational spares" until next year.

Virgin Blue: Branson plays his Poker hand | Centre for Asia Pacific Aviation

good article.......

[Skystar320]

Jim Irwin, such an armchair expert with a can of VB in hand I presume???

[tsalta]

ABC1,

VB has a positive cash flow

- Incorrect. VB is burning cash at an alarming rate.

market share.

- Domestically - yes, Internationally - No

brand

- Yes

it posted a profit.

- A great big NO.

Why then didn't the share price slump to near zero like Centro for example?

Is a decline from the mid two dollar mark to 25 cents not enough of a decline for you?

Personally I think my financial opinions are very well informed. I am quite frankly dismayed there appears to be very few on these boards (like yourself for instance) who grasp the dire situation which VB are in at the moment.

Even Anstar in his latest post says that VB have positive cash flow???????? I am at a complete loss to understand how anyone can arrive at that conclusion.


Tsalta

[Skystar320]

At only 21, it seems the choice is a leather armchair, with a glass of Scoth and a fine cuban cigar?

[tsalta]

Skystar

If you would like to debate the subject, I would be more than happy. However, as usual, you have nothing to contribute.

tsalta

[slice]

When you own your own aircraft you can park them up

That in effect does cost you in terms of an idle depreciating asset. I would interested to know the terms of the leaseback in terms of minimum contracted hours / rates etc. i.e. fly these airframes at the minimum and flog the ones you still own as part of the capacity reduction - as mentioned previously there are also tax / banking issues that come into the equation. Are there any REAL (not tsalta) aviation accountants here that know these issues in any depth ?

Oh wait what am I saying! That's like asking for real pilots on Pprune!

(Specks of gold in avalanche of dust!)

I have heard talk of redeployment of VB ac/ to PB for near SE Asia flying (Singers etc.)