Virgin Australia to be privatised ?
Funny how the press 2 months ago were singing JB's song
Virgin Australia is flying high as the nation's second biggest airline benefits from 12 year-low oil prices and higher domestic airfares.
Virgin swung to a net profit of $45.7 million for the six months to December 31, with a $33.8 million benefit in the fall in oil prices offsetting a $19.2 million impact from the Bali volcanic flight disruptions in November.
The result was a major turnaround from $53.1 million net loss suffered a year earlier.
Virgin expects to book a similar gain from further oil price falls in the second half of fiscal 2016, chief executive John Borghetti said.
Virgin also remains on track to exceed its target of $1.2 billion in cumulative cost savings by the end of the fiscal 2017.
Those savings will include the sale of five Embraer 190s and six of its Embraer 170s, which are currently sub-leased to Delta Air Lines. As a result, Virgin will boast a fleet of 154 aircraft.
Virgin's underlying interim profit before tax jumped sharply to $81.5 million from $10.2 million a year ago, driven by strong revenue from its domestic operations and ongoing improvements at Tigerair.
Virgin Australia profit flying high
Virgin Australia is flying high as the nation's second biggest airline benefits from 12 year-low oil prices and higher domestic airfares.
Virgin swung to a net profit of $45.7 million for the six months to December 31, with a $33.8 million benefit in the fall in oil prices offsetting a $19.2 million impact from the Bali volcanic flight disruptions in November.
The result was a major turnaround from $53.1 million net loss suffered a year earlier.
Virgin expects to book a similar gain from further oil price falls in the second half of fiscal 2016, chief executive John Borghetti said.
Virgin also remains on track to exceed its target of $1.2 billion in cumulative cost savings by the end of the fiscal 2017.
Those savings will include the sale of five Embraer 190s and six of its Embraer 170s, which are currently sub-leased to Delta Air Lines. As a result, Virgin will boast a fleet of 154 aircraft.
Virgin's underlying interim profit before tax jumped sharply to $81.5 million from $10.2 million a year ago, driven by strong revenue from its domestic operations and ongoing improvements at Tigerair.
Virgin Australia profit flying high
Maybe JB is being a scape goat and the Air NZ sell down a product of thier own doing?
The direction Virgin has taken under JB strikes me as that of a house renovation (which was needed) but along the way the inevitable cost over-runs occur and its hand it hat to the bank again and again (NZ,EY,SQ).
The house will most likley get finished but one of the bankers with the smallest pockets (NZ) has to bail out as they are in the process of getting hit hard on thier once gold mine regional routes. To make matters worse for NZ, they are about to loose thier North American grip and competition seems to be coming into the south pacific routes.
Maybe its Air NZ running scared rather than JB having failed?
If so would the irony be thats its the QF group (with AA) doing the damage? Could the Irishman be a genius afterall? Do I need to reassess what im smoking? Who knows.
The direction Virgin has taken under JB strikes me as that of a house renovation (which was needed) but along the way the inevitable cost over-runs occur and its hand it hat to the bank again and again (NZ,EY,SQ).
The house will most likley get finished but one of the bankers with the smallest pockets (NZ) has to bail out as they are in the process of getting hit hard on thier once gold mine regional routes. To make matters worse for NZ, they are about to loose thier North American grip and competition seems to be coming into the south pacific routes.
Maybe its Air NZ running scared rather than JB having failed?
If so would the irony be thats its the QF group (with AA) doing the damage? Could the Irishman be a genius afterall? Do I need to reassess what im smoking? Who knows.
Thread Starter
1a sound asleep
I am not confident JB has saved Virgin Australia. He certainly has dug a bigger hole for them to climb out of.
You mentioned a figure of $1B. It appears to me that Virgin Australia is only worth about half its book value if all debts and liabilities are carried forward.
With total assets of $1,586,000,000 and liabilities of $2,300,800,000 the balance sheet is a mess.
With long term debt being 68% of the companies capital and a debt/equity ratio of 256.6% some serious surgery needs to be performed before a serious suitor would be interested.
Whilst it is true Delta purchased the SQ 49% holding in Virgin Atlantic after SQ lost a total of approx. $1B on their foray. Virgin Atlantic is now a shell of its former self having dropped services to Sydney, Tokyo, Vancouver, Mumbai and Cape Town. In addition its UK 'Little Red' domestic airline has closed down.
And yes you are correct; Virgin America is on the chopping block. After a huge airfare sale recently to raise some cash it appears the major partners in the airline (similar to Virgin Australia ) have offered the airline for sale after less than 18 months as a public company. So far Alaska Airlines and Jet Blue have made offers for the airline with an announcement expected as early as next week.
A number of years ago anything to do with Richard Branson was regarded as a 'sideshow'; nothing appears to have changed.
I am not confident JB has saved Virgin Australia. He certainly has dug a bigger hole for them to climb out of.
You mentioned a figure of $1B. It appears to me that Virgin Australia is only worth about half its book value if all debts and liabilities are carried forward.
With total assets of $1,586,000,000 and liabilities of $2,300,800,000 the balance sheet is a mess.
With long term debt being 68% of the companies capital and a debt/equity ratio of 256.6% some serious surgery needs to be performed before a serious suitor would be interested.
Whilst it is true Delta purchased the SQ 49% holding in Virgin Atlantic after SQ lost a total of approx. $1B on their foray. Virgin Atlantic is now a shell of its former self having dropped services to Sydney, Tokyo, Vancouver, Mumbai and Cape Town. In addition its UK 'Little Red' domestic airline has closed down.
And yes you are correct; Virgin America is on the chopping block. After a huge airfare sale recently to raise some cash it appears the major partners in the airline (similar to Virgin Australia ) have offered the airline for sale after less than 18 months as a public company. So far Alaska Airlines and Jet Blue have made offers for the airline with an announcement expected as early as next week.
A number of years ago anything to do with Richard Branson was regarded as a 'sideshow'; nothing appears to have changed.
Many forget that JB has saved VA. IT was a LCC that was floundering. It has taken lot of time, effort and cash to transform it into a full service airline.
Mistakes include some issues with fuel hedging and perhaps some poor fleet choices. Some of these issues he inherited.
SQ owned 49% of VS. Do you really think they have the required $1B to invest in VA? Both SQ and EY are busy with their own issues
Who is hiding in the bushes. DELTA. They already bought SQ's 49% of VS. VX is on the market (as of last week)
Watch out for the Delta controlled Virgin Airline Group. Cashed up and ready to pounce
Mistakes include some issues with fuel hedging and perhaps some poor fleet choices. Some of these issues he inherited.
SQ owned 49% of VS. Do you really think they have the required $1B to invest in VA? Both SQ and EY are busy with their own issues
Who is hiding in the bushes. DELTA. They already bought SQ's 49% of VS. VX is on the market (as of last week)
Watch out for the Delta controlled Virgin Airline Group. Cashed up and ready to pounce
Is the Virgin brand worth paying the large royalty fees for the name. Maybe it needs a new name and ditch the Virgin brand?
Is part of the problem the fact that have failed to join *Alliance ?
Way too different planes and the fleet?
Lack of investment from the likes of NZ to really be able to grow to become a true QF competitor?
The way I see it with no alliances or services to most international destinations its better to be a QF customer for loyalty and network of destinations. I think it is under capitalised as well as mismanaged to a degree
Funny ... I guess code share with Etihad to most ports in Europe, Singapore airlines to most ports in Asia, and Delta to most ports in USA aren't the same as QF code shares with Emirates
Southwest Airlines have stood the test of time with an all-737 operation likewise Ryan Air and Easyjet [A320] etc...
Virgin should have blackened the skies with 737's and not worried about trying to match QF..
Virgin should have blackened the skies with 737's and not worried about trying to match QF..
Virgin should have blackened the skies with 737's and not worried about trying to match QF.
So either way not a good deal then??
The recreation of Ansett is what has occurred without tight cost controls and top airline guys running it...
Reminds me of Robert Amman saying after he won the then Coastwatch contract from Skywest that "I know I'll be successful because I know nothing about this industry!"
The recreation of Ansett is what has occurred without tight cost controls and top airline guys running it...
Reminds me of Robert Amman saying after he won the then Coastwatch contract from Skywest that "I know I'll be successful because I know nothing about this industry!"
JB's refusal to look for a chinese partner isn't going to help VA ....
Yes China's economy may be on a fall, but yet it's still got heaps of dirty cash coming out of its people, while QF is enjoying those 'dirty money', VA is just falling behind....
Yes China's economy may be on a fall, but yet it's still got heaps of dirty cash coming out of its people, while QF is enjoying those 'dirty money', VA is just falling behind....
These problems DO NOT exist in other alliances. Jesus, QF had this sorted with BA, AA, etc. in the 90's, it's not rocket science, just requires the correct systems and processes and a realisation it's a whole industry not just the other airlines having to play by VA's rules. There are other issues as well, I've heard from some passengers that they check in then get to the gate and they're not on the flight so have to sit somewhere else, a seat they didn't want.
I really think what VA need is someone like NZ or DL to take full ownership who will shake the crap out of it and implement the right processes and systems and have the will to say get lost to those who don't agree.
There appears to be reading between the lines, a lot of 'pre-conceptions' amongst VA management and many of these are wrong and stops the airline clicking into place with partners... this is anecdotal of course, just based on talking to people in the industry. I gather part of it seems to be a) insufficient capability in systems to deal with disruption and b) the tools not at the coalface in comparison with, say, QF where most disruption management is automated and/or available to the coalface and requires 2-3 clicks and all passengers are re-accommodated on first available flights. I haven't used their systems so I don't know for sure but that certainly seems to be the centre of a lot of problems. Anyway, it would certainly be interesting to be on the inside and know what is true and what is rumour. It does say a lot for the media though, they have been fawning all over the CEO for years and totally ignored the realties because of jazzy TV commercials, etc.
Hello,
Bullwinkle, Cant understand your logic, the A330s are utilised approx 16 hrs per day, 777s with the long layover LAX approx 10hrs per day.
777s fly with at least 3 cockpit crew or maybe 4? to LAX and AUH, 330s 2 cockpit crew.
Borghetti knew full well from his days at Qantas how much revenue Qantas derived from 330 operations to/from Perth.
Bullwinkle, Cant understand your logic, the A330s are utilised approx 16 hrs per day, 777s with the long layover LAX approx 10hrs per day.
777s fly with at least 3 cockpit crew or maybe 4? to LAX and AUH, 330s 2 cockpit crew.
Borghetti knew full well from his days at Qantas how much revenue Qantas derived from 330 operations to/from Perth.
The Townsville refueller's assistant says that a Chinese carrier is to buy the Air NZ (not the bank ANZ) share package and will take a very active role in the direction that Virgin Australia goes in the future.
Government.
NGO.
QUANGO.
Public company.
Private company.
keep up LeadSled
http://www.companydirectors.com.au/d...on-definitions
NGO.
QUANGO.
Public company.
Private company.
keep up LeadSled
http://www.companydirectors.com.au/d...on-definitions