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

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

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Old 3rd Sep 2010, 22:39
  #801 (permalink)  
 
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Spike,
Sounds interesting. Are you Dutch my friend ? I have investments in a few portfolios, the bulk being resources and property. However butter is a new concept. I will take that under advisement !
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Old 4th Sep 2010, 22:39
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Cactus,

We agree on a number of things. But my gripe is the efforts here in general to rewrite the short history of Virgin Blue to vilify Godfrey. Most of the outstanding result that Borghetti is quoted as praising was made in the 10 months before he took up his role or in the 8 months before he was selected. If Godfrey had been a goose DJ wouldn't have made it this far. I'm not just a shareholder. I have family in the airline. And if it hadn't been for Godfrey a lot of pilots who wanted to come back to Australia would still be eating sand because they would be on a black list. I don't think anyone is perfect, but he had good run, and still owns part of the operation.
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Old 5th Sep 2010, 09:41
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Denabol

Make no mistake, Godfrey is a goose, and like all geese, he surrounded himself with other geese.

That is not to deny the fact that he and his gaggle oversaw the massive growth of the last ten years, and is testament to his entrepreneurial skills that he was able to ride the wave.

What we have evidenced over the last 4 years or so is a clear indictment of his management skills. Once the going got tough, they had no ideas, as evidenced by the disastrous introduction of premium, in flight entertainment, and V Australia.

As JB has stated, on it's current trajectory, VB had about 5 years to extinction. Through his knowledge of how the big boy airlines play, and his contacts within the industry he has taken the flying circus and given it a direction that may not ensure a bright future, but gives it a fighting chance.

As an investor, you would be aware that the market is never wrong. Sometimes it may be a bit misaligned, but never wrong. The market voted and it said Godfrey and his gaggle was a liability and he had to go. The market is now cautiously endorsing what appears to be the foundations of a grown ups airline that may be able to compete with serious airlines like Qantas.
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Old 5th Sep 2010, 10:38
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BG was right to pitch the idea of VB to RB and his launch timing was perfect, up and running with the wrinkles out by the time Ansett fell over or was pushed.

Certainly the VB he created was not what he expected pre Ansett demise. My humble opinion is that any reasonably competent manager could have built the airline within the vacuum created by Ansett being out of the market.

They were probably playing catch up for 2-3 years just to bring in new airframes and scale up everything. Once that settled down BG had no new ideas that worked. Can anyone point to a stroke of brilliance other that actually starting the operation? Perhaps getting pilots to work for 2/3 of what other 737 drivers were earning in Australia but that was simply leveraging those who wanted to come home.

As mentioned above, JB is in the seat and the share price reflects that the market likes what it sees and hears from JB.

Fair praise for BG, he started it, it was his baby but it eventually needed more skills and experience than he could provide. He has become a very rich man as a result and good luck to him.
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Old 5th Sep 2010, 21:00
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I'll repeat the obvious. If we exclude earnings from loyalty programmes Virgin Blue is making twice as much money from airline operations than Qantas and Jetstar combined with fewer planes. Look at the DJ and QF presentations on the ASX site. Take notes. Compare the operational passenger earnings. Talk to your broker.

But I bow to the wisdom of the board. Godfrey was obviously a complete fool and we are all so much smarter and would have driven the airline bust in about four months.
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Old 6th Sep 2010, 11:41
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denabol,
If Godfrey had been a goose DJ wouldn't have made it this far

Are you serious?? There are a plethora of geese that have carved out a name for themselves in history then succumbed to their own ego, ambitions, greed or arrogance. You are naive my friend. Try studying these two for starters - Dennis Kozlowski and Jeff Dachis.
And if it hadn't been for Godfrey a lot of pilots who wanted to come back to Australia would still be eating sand because they would be on a black list
So because he hired pilots from 89 that makes him worthy of a knighthood? I think not. I have no disrespect for the pilots he hired, some are good friends of mine, as well as others who didn’t partake in the events of 89. He hired many people from many different airline backgrounds, both near and afar.
I don't think anyone is perfect, but he had good run, and still owns part of the operation

Big deal. He still owns a portion courtesy of a share float of which he was gifted a large chunk. Branson also owns a small piece of the pie even though his take in total has been reported as over $900 million to date. For that kind of return I too would remain ‘part owner’ with a minor portfolio as an outward statement that ‘I have trust and faith in the organization’. What a crock. If you think that because a former executive in a listed company owns a slice that this makes it a sound investment then I would say ‘good luck on your future and past investments’ based on that formula.
But I bow to the wisdom of the board. Godfrey was obviously a complete fool and we are all so much smarter and would have driven the airline bust in about four months

Aagh a sense of humor from the one who is pain! Four months you say? I will give your revered former leader some credit, I doubt it. But who knows what the future would have held under his ongoing direction, only a crystal ball could accurately answer that.
It is time for you to take a denabol and go and relax.

Virginexcess,

What can I say, your posts are accurate in all aspects. Nice to see that ‘somebody is awake at the wheel’.But your masterstroke was this –
As an investor, you would be aware that the market is never wrong. Sometimes it may be a bit misaligned, but never wrong. The market voted and it said Godfrey and his gaggle was a liability and he had to go
touché

icarus2001,
My humble opinion is that any reasonably competent manager could have built the airline within the vacuum created by Ansett being out of the market
Spot on. No need to be humble. Arnold from ’Diff'rent Strokes’ could have turned a dollar out of that stroke of sheer good luck
Fair praise for BG, he started it, it was his baby but it eventually needed more skills and experience than he could provide
Now, I will exercise my own humility. Yes, it was his baby, agreed. But the latter part of your sentence is the painful truth. This was evident by 2005.

Last edited by Cactusjack; 6th Sep 2010 at 12:03.
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Old 6th Sep 2010, 12:13
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VB Shares?

Hell no. Talk JB into listing himself and I will buy shares in him. High capital growth based on bugger all performance. You can't go wrong. Dip me in honey and throw me to the lesbians if I'm wrong!

Last edited by flying-spike; 6th Sep 2010 at 12:24.
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Old 7th Sep 2010, 19:41
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Since VBA made its move up from around 30c the increase in volume has been significant.
Average vol. for the last few weeks has been about 10m per day, for the last 9 trading days its 50m.
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Old 8th Sep 2010, 01:54
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And for every buyer, there is a seller - wealth is only created from anothers' loss, in this case......
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Old 8th Sep 2010, 03:57
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wealth is only created from anothers' loss
Sounds cute, but a completely specious argument.

Wealth, is in fact created from mutually beneficial exchange of property, ideas and possessions.

Last edited by Red Jet; 8th Sep 2010 at 04:07.
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Old 8th Sep 2010, 09:46
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The fact that the employees trading window is presently open would account for some of the increase in turnover.
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Old 8th Sep 2010, 19:05
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That wouldn't account for the increase, 63m yesterday. Staff would've had to get them pretty cheap to make it worth their while to sell them at the current price.
Tiger report they've cancelled flights due to a shortage of pilots.
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Old 8th Sep 2010, 21:36
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US plans rejection of Delta-Virgin Blue tie up

Ex Associated Press via the SMH:

US plans rejection of Delta-Virgin Blue tie up

September 9, 2010 - 7:21AM
Plans by Delta Air Lines and affiliates of Virgin Blue Group to collaborate on flights between the US and Australia have suffered a setback, with the US Transportation Department saying it expects to deny their request.
Delta currently flies only between Sydney and Los Angeles. UAL Corp's United Airlines and Australian carrier Qantas Airways currently dominate the flight schedule between the two countries.
Delta and Australian budget airline Virgin Blue wanted permission to coordinate fares and schedules, and to share money from the flights.
Usually, antitrust laws would block that kind of collaboration, but airlines can get permission in some cases for joint ventures if they can show that consumers will benefit. Australian authorities approved the proposal in December.
However, the Transportation Department said the airlines have not shown that the alliance would provide enough benefits for travelers such as lower fares or increased capacity. Also, the DOT said that Delta and Virgin Blue plan to limit their cooperation to the largest routes between the US and Australia, limiting the benefit for travelers.
The two "have virtually no experience as commercial partners and employ business processes that they admit are not compatible," the DOT order said. "They have only just begun to explore the feasibility of arms-length cooperation, much less the degree of cooperation that requires, or would merit, a grant of antitrust immunity."
The airlines have two weeks to object.
"We strongly believe our proposed alliance with the Virgin Blue Group will be good for consumers," Delta said in a written statement.
"We are reviewing the DOT's tentative order and will respond within the comment period."
AP
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Old 8th Sep 2010, 22:25
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Maybe its time once and for all to close up whats only a loss maker for vb. Can't imagine their balance sheet if BG never bothered with the 777. Or even the EMB for that matter..or live tv.. or premium economy. Amazing the company is still open with all these rubbish loss making ideas. Hopefully JB will "cut the crap".

Tiger report they've cancelled flights due to a shortage of pilots.
Hope they cancel the airline. Why would you want to work for this outfit.
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Old 8th Sep 2010, 23:49
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at present time this is only a preliminary denial
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Old 9th Sep 2010, 08:06
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Sandilands argues that this could see V Australia off the Pacific route and Singapore Airlines in.

Virgin sings the Delta blues while the Singapore girl hums along in waiting – Plane Talking
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Old 9th Sep 2010, 08:10
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Yep that'll be it. No US flights no V Australia.
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Old 9th Sep 2010, 09:01
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Maybe its time once and for all to close up whats only a loss maker for vb.
If VA paid pilots 300K a year would that make it a better operation.

Seems to me that some people here think that if an Australian based airline doesn't pay what QF pays then they shouldn't be allowed to operate.

VA will survive operating AUH-SYD (MEL) (BNE)-LAX and probably to Japan with the 777's, and there is no shortage of people to fly them.

Also on the cards PER-AUH with VA metal codeshare with EY.
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Old 9th Sep 2010, 11:34
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Couldn't give a damn what their pilots make. Just basing it on what JB has said "VA loses ALOT of money". "Delta deal will make the world of difference". Then again the Etihad deal might have changed his mind. I don't think he's "in" to losing money.

Sandilands makes some interesting points in his blog.
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Old 9th Sep 2010, 12:24
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As of the most recent figures, VA is currently profitable on a month by month basis, also Alan Joyce stated on the ABC that Qantas are close to break even on the LA route, so it would stand to reason that VA would be break even or better on the same route, given ticket prices are comparable and VA's cost base would be significantly less than Qantas.

There is little doubt that JB won't stick with VA if it continues to make a loss, but there is every indication at present that genuine sustained profit is not too far off, with or without the Delta deal. A tie up with Delta would just put it beyond doubt for the short term.
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