Merged: Virgin Blue Share Price - how low can it go and for how long?
short flights long nights
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Nil Defects...last quote .185 cents, so yes you are correct
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I would imagine that at or around 10c it would be in a trading halt whilst things were sorted out. I don't think the board would sit and watch whilst it went to 1c which is the lowest it could trade at.
Looking at the ASX top 300 yesterday in the Fin Review. VBA is still around position 250 or 260 on market cap even though the share price is so low. There are plenty of other listed companies struggling along as well.
The share prices aren't really a good indication of how companies are going at the moment as the demand for shares is off. People would rather hide there money under the bed whilst they wait for the GEC to finish.
Those selling shares are either scared or retiring and are getting out to take whatever cash they can and locking in a loss or those who are cutting back in every area to keep the family home due to margin lending.
Scary and uncertain times for everyone.
Looking at the ASX top 300 yesterday in the Fin Review. VBA is still around position 250 or 260 on market cap even though the share price is so low. There are plenty of other listed companies struggling along as well.
The share prices aren't really a good indication of how companies are going at the moment as the demand for shares is off. People would rather hide there money under the bed whilst they wait for the GEC to finish.
Those selling shares are either scared or retiring and are getting out to take whatever cash they can and locking in a loss or those who are cutting back in every area to keep the family home due to margin lending.
Scary and uncertain times for everyone.
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Anybody read the small atricle on Virgin Blue in the Financial Times yesterday?
It said that Virgin Blue expect to break even next year (but this excludes V Australia costs only).
So does this mean (due to their cost saving initiatives that help compensate for falling passenger demand) they expect $0 profit/loss minus what ever V Australia loses? If so at least they're not making a loss from the flying domestically? Wonder how much V Australia will lose? Aren't they now, due to the GEC, expecting 4 years until they break even from start up? After this GEC I'm sure it will be a success, especially with more code-sharing on the way. Just have to see the recession through though which is the '$64000 question'. How much has Virgin Blue openly got in the bank?
It said that Virgin Blue expect to break even next year (but this excludes V Australia costs only).
So does this mean (due to their cost saving initiatives that help compensate for falling passenger demand) they expect $0 profit/loss minus what ever V Australia loses? If so at least they're not making a loss from the flying domestically? Wonder how much V Australia will lose? Aren't they now, due to the GEC, expecting 4 years until they break even from start up? After this GEC I'm sure it will be a success, especially with more code-sharing on the way. Just have to see the recession through though which is the '$64000 question'. How much has Virgin Blue openly got in the bank?
Virgin Blue's stock suffers in weak key markets.
Steve Creedy, Aviation writer | March 10, 2009
Article from: The Australian
VIRGIN Blue shares reached a low of 18c yesterday after the airline sector was hit by signs of weakening demand in key overseas markets, including the US.
Shares in Australia's No.2 carrier showed no sign of pushing back above the 20c level and closed unchanged at 18.5c. Qantas shares fell 5.5c to $1.42.
The poor showings came after statistics on Friday revealed that 2 per cent fewer Australians travelled overseas in January.
Overall arrivals rose 6.4 per cent but key markets continued to weaken, with arrivals from Japan down 33.4 per cent and the US falling 9.3 per cent.
Outbound business travel also fell by 24.3 per cent in January, the lowest level since April 2003, although leisure travel rose 4 per cent.
There were also some signs that growth in short-haul overseas travel, while still up 4 per cent in January, was slowing.
At least one analyst believes these conditions will favour Virgin over Qantas.
Credit Suisse notes the smaller airline has relatively low exposure to long-haul travel and should continue to benefit from the relative strength of short-haul business travel.
But Virgin shares, which traded for $2.80 as recently as 2007, have continued to slip since the airline last month reported an interim net loss after tax of $101.4 million and a 65 per cent fall in underlying net profit after tax (NPAT) to $39.9 million,
While the current share price is below analysts' targets of 27c to $1.20, there are mixed views on what to do with the stock.
A Bloomberg survey shows recommendations include two buys, a sell, an underperform, an outperform and a hold.
The Centre for Asia-Pacific Aviation yesterday said Virgin's shares had fallen by more than a third since the beginning of the year because of "relentless pressures" at home and internationally.
It cited last month's comments by chief executive Brett Godfrey that Virgin was facing an exceptionally challenging and unprecedented operating environment.
"The entry of V Australia on the Pacific route is confronting severe headwinds as demand slips and competitor Qantas cuts its lowest fares to about a third of the pre-V Australia announcement levels," the Sydney-based aviation think-tank said.
"The situation is not helped by a need for the restructuring of the carrier's current shareholding, where Virgin Group holds a veto-controlling 25.5 per cent and is unlikely to withdraw at current price levels."
Steve Creedy, Aviation writer | March 10, 2009
Article from: The Australian
VIRGIN Blue shares reached a low of 18c yesterday after the airline sector was hit by signs of weakening demand in key overseas markets, including the US.
Shares in Australia's No.2 carrier showed no sign of pushing back above the 20c level and closed unchanged at 18.5c. Qantas shares fell 5.5c to $1.42.
The poor showings came after statistics on Friday revealed that 2 per cent fewer Australians travelled overseas in January.
Overall arrivals rose 6.4 per cent but key markets continued to weaken, with arrivals from Japan down 33.4 per cent and the US falling 9.3 per cent.
Outbound business travel also fell by 24.3 per cent in January, the lowest level since April 2003, although leisure travel rose 4 per cent.
There were also some signs that growth in short-haul overseas travel, while still up 4 per cent in January, was slowing.
At least one analyst believes these conditions will favour Virgin over Qantas.
Credit Suisse notes the smaller airline has relatively low exposure to long-haul travel and should continue to benefit from the relative strength of short-haul business travel.
But Virgin shares, which traded for $2.80 as recently as 2007, have continued to slip since the airline last month reported an interim net loss after tax of $101.4 million and a 65 per cent fall in underlying net profit after tax (NPAT) to $39.9 million,
While the current share price is below analysts' targets of 27c to $1.20, there are mixed views on what to do with the stock.
A Bloomberg survey shows recommendations include two buys, a sell, an underperform, an outperform and a hold.
The Centre for Asia-Pacific Aviation yesterday said Virgin's shares had fallen by more than a third since the beginning of the year because of "relentless pressures" at home and internationally.
It cited last month's comments by chief executive Brett Godfrey that Virgin was facing an exceptionally challenging and unprecedented operating environment.
"The entry of V Australia on the Pacific route is confronting severe headwinds as demand slips and competitor Qantas cuts its lowest fares to about a third of the pre-V Australia announcement levels," the Sydney-based aviation think-tank said.
"The situation is not helped by a need for the restructuring of the carrier's current shareholding, where Virgin Group holds a veto-controlling 25.5 per cent and is unlikely to withdraw at current price levels."
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I find it interesting that VB wont tell the market how much they got for their 737s they just sold to the Chinese Bank BOC.
Virgin Blue leases back new 737s - Brett Godfrey, chief executive of the Brisbane-based carrier, flagged the arrangement when he announced the first-half loss last week.
He said then that an asset realisation program involving freehold property and the sale and lease-back of aircraft also raise over $150million.
Geoff Easdown - Herald Sun
March 03, 2009 12:00am
He said then that an asset realisation program involving freehold property and the sale and lease-back of aircraft also raise over $150million.
Geoff Easdown - Herald Sun
March 03, 2009 12:00am
It gives some more breathing space but its like taking your wifes jewellery to the pawn shop.
Desperate times.
your assumptions on the 4 BOC 737's are wrong. I would suggest that VB raised nothing by selling these aircraft as one was not "owned" but rather financed via some other bank - they might have realised a few $$$ but deposits on leases have to be paid too which are held until the aircraft are handed back. The other 3 are simply VB handing over their purchase rights to BOC as lessee. VB probably used the deposits held by Boeing as the deposits for the leases. These deals are done all the time all over the world. Typically airlines including QF have a mix of leased and "owned" [meaning funded by some bank consortium] aircraft. Not many pay cash ever...
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The conversion from purchase to lease often occurs. It may not in itself release large amounts of cash, but could have a positive tax advantage (varies country to country).
My understanding is that Virgin's cash position is limited due to finance guarantees which effectively restrict access to "cash in the bank".
In other words, the business as a going concern really needs to be cash flow positive and that includes VA as well.
If it's not ( and that is almost certainly the case right now), then it's only a matter of time.
I wouldn't place too much emphasis on the share price in such a turbulent market. What is important are the company fundamentals and cash reserves.
My understanding is that Virgin's cash position is limited due to finance guarantees which effectively restrict access to "cash in the bank".
In other words, the business as a going concern really needs to be cash flow positive and that includes VA as well.
If it's not ( and that is almost certainly the case right now), then it's only a matter of time.
I wouldn't place too much emphasis on the share price in such a turbulent market. What is important are the company fundamentals and cash reserves.
DH is correct as it is all about cashflow. If its positive = good, negative = not good because you're into reserves and tapping lines of credit etc. Tax effectiveness is an accounting issue. Survival is cash...
Bo777 - I think some posters are getting a tad excited with the doom and gloom scenarios they are painting. That said there are a tough couple of years ahead but as the domestic operation seems to be basically holding its own by reducing capacity, the big issue for the group is V Aus. On the one hand it is just about the worst time to start these Pacific services, however one thing that seems to be overlooked is that V really only have to try to grab a relatively small portion of United / QFs market share. Whether they succeed or not remains to be seen - QF may respond by crushing the yield to maintain market share or it may not. There is also word of expanding PB routes into SE Asia via Darwin a la Jetstar - this I guess spreads the risk a bit. I understand DPS is going very strongly (PER up to daily soon) so this might encourage expansion that way.
As for the share price, well that might get some big player interested and that changes everything. I doubt that it will go completely insolvent but if V Aus becomes the black hole of legend then we may see the whole show wind up less than half the size it is now.
Remember this is Pprune Dununda - the Jerry Springer show of internet aviation.
As for the share price, well that might get some big player interested and that changes everything. I doubt that it will go completely insolvent but if V Aus becomes the black hole of legend then we may see the whole show wind up less than half the size it is now.
Remember this is Pprune Dununda - the Jerry Springer show of internet aviation.
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VB life expectancy
Im starting to hear talk up here in HK about VB and their current position. Is the situation down there really looking that shaky that they possibly won’t be around in 6 months? IF so this will be a very sad day in Aviation, a lot of mates looking for jobs. Don’t wish that on anyone……
Last edited by 629bus; 11th Mar 2009 at 13:32.
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Yep, VB actually has a pretty strong position, they are well liked (mostly) they offer cheap (ish) fares, they have a good solid number of aircraft/ assets... and they usually keep the PAX and Employess relatively happy...
I think VB could come out well from this downturn
I think VB could come out well from this downturn
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That said there are a tough couple of years ahead but as the domestic operation seems to be basically holding its own by reducing capacity
&
Adding PER-DRW & v.v
Effective 27/28 April 2009
7378FE