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Virgin Australia to be privatised ?

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Virgin Australia to be privatised ?

Old 30th Mar 2016, 23:57
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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
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Old 31st Mar 2016, 04:11
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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.
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Old 31st Mar 2016, 05:11
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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.
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Old 31st Mar 2016, 05:20
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Originally Posted by 1a sound asleep
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
That is absolute rubbish. Speak to any staff member and they will tell you he has destroyed it. Some of the people he has brought in (with a few exceptions) are incompetent or do not inspire any confidence. The mark of success and progress at VA is the number of times 'going forward', 'reaching out', etc. can be worked into the conversation... 'let's talk about x y or z and 'what that looks like' or 'we need to discuss the xyz 'space'... maybe it's throughout business but some people I have spoken to say most meetings are dominated by this garbage and very little is achieved. Anyone with any talent is driven out. This appears to be replicated in some of the companies that have been taken over with good people leaving as a result. The depth of expertise present even in QF and NZ and other airlines is not present, hence solutions to airline 101 problems are complicated, onerous and laughable. From what I've heard from friends in New Zealand, there is also significant frustration from NZ regarding VA's belligerence in refusing to accept industry norms for the exchange of passengers in disruptions, apparently often NZ just gives its passengers to QF in disruptions rather than have them go back and forward between VA and NZ while they argue over standard paperwork. It's a complete and utter mess by all accounts, budgets do not get met or are unrealistic, technology that could help is purchased then abandoned short-shortsightedly at the first financial blip, managers don't get reports on their budget and P/L which is unheard of in other airlines. Godfrey was a respected person and leader, he navigated to profitability and many wish he would return. What JB has done, billy the blind man's dog knows was obvious, just not with the obscene cost.
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Old 31st Mar 2016, 05:25
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Originally Posted by B772
1a sound asleep
A number of years ago anything to do with Richard Branson was regarded as a 'sideshow'; nothing appears to have changed.
I appreciate your perspective. Originally as VB VA was nothing more than a LCC. It has taken a lot to get it to where it is. Where to from here?

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
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Old 31st Mar 2016, 06:55
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Originally Posted by 1a sound asleep
....The way I see it with no alliances or services to most international destinations...
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
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Old 31st Mar 2016, 08:21
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Does anybody else wonder how much they might save if they didn't buy all their pilot's RM Williams boots?
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Old 31st Mar 2016, 08:22
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The leather jackets, no ties, and red jets were rock n roll..white jets and black suit and tie are elevator music...yawn
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Old 31st Mar 2016, 09:16
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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..
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Old 31st Mar 2016, 11:34
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Virgin should have blackened the skies with 737's and not worried about trying to match QF.
And then be crushed by Jetstar as QF threw unlimited cash into the Jetstar black hole? Which is basically what has been going on since 2000.
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Old 31st Mar 2016, 12:30
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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!"
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Old 31st Mar 2016, 14:22
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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....
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Old 31st Mar 2016, 17:35
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Originally Posted by Agent86
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
I think the point was that QF has membership of a major alliance (oneworld) and thus has codeshares everywhere whereas VA is relying on selected carriers and ownership partners. So what about EY, the flight is often late (not EY's fault apparently, it's to do with an ATC congestion out of AUH... but when the flight arrives late, apparently SABRE is dysfunctional in terms of transferring passengers or there are problems with who 'owns' the booking, etc.).
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.
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Old 31st Mar 2016, 22:29
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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.
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Old 1st Apr 2016, 00:10
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I think your numbers need to be reversed. 4 crew on B777 Ops as well
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Old 1st Apr 2016, 04:01
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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.
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Old 1st Apr 2016, 05:23
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Remember the heady days when the shares were issued at $2.00?
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Old 1st Apr 2016, 05:24
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Not if EY gets in first..........
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Old 1st Apr 2016, 06:20
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Privatised ???
And when was Virgin nationalised?? I must have missed that one.
Tootle pip!!
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Old 1st Apr 2016, 07:32
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Government.

NGO.

QUANGO.

Public company.

Private company.

keep up LeadSled

http://www.companydirectors.com.au/d...on-definitions
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