Tigerair fleet change to B737.

[Green.Dot]

There was a time around 2015-2016 where Tiger was really gaining momentum. OTP was close to 90% (smashing Jetstar) and that was the same year they turned a modest profit. Staff morale and optimism for the 14 x 320 operation was quite high and VA told the ACCC when they bought TT in 2014 that they would expand to 35 aircraft by 2018. It was the “go-to” job for a lot of pilots. Then it all literally came crashing down following the July 2016 announcement by genius JB that they were going to complete a fleet transition to 737 by mid 2019.

Bali flying- fail. 737 fleet transfer- fail. Training costs- fail. Promised growth of aircraft- fail. Staff morale- fail. Staff retention- fail. OTP- fail. Reduction in aircraft and staff- tick!

Anyway, the past can’t be changed. Point is Tiger CAN make money. The Tiger brand CAN recover- people still buy cheap airfares, ask the people who fly Air Asia if they care about reputation.

VA SHOULD be investing in Tiger or whatever they rebrand as if they go down that path. As the previous poster said JQ/Qantas group have been handed another golden egg. VA should largely forget about JBs widebody pissing contest with Qantas and do what they do best. That is fly narrow bodies and make money!

Best wishes to all the Tiger and Virgin staff, you deserve better than the crap JB set up for you... where is he? Maybe enjoying the Italian sunshine with an Order of Australia medal around his neck? 🤬

https://www.google.com.au/amp/s/amp....05-gqlk8h.html

[-41]

Originally Posted by QldPilotGuy

Umm Virgin "propping up" Tiger ? What exactly is your source ? Did you read and examine the Half Yearly results ?
Tiger actually had the highest load factors on flights in the Virgin Group and with one of the lowest cost bases in Australia it is the profitable part of the group.
It's actually Virgin that is pulling down Tiger, Virgin posted a loss and in response they made almost no changes to the Virgin network but instead culled Tiger which will help their books look better in the short term.
If Virgin think that getting rid of half of Tiger will mean Tiger passengers will fly Virgin they are incredibly misguided, they have literally just handed Jetstar a Golden Egg.

Virgin paid $1 for TT, then invested millions in a loss making business.

Not so Sure VA is “pulling down” Tiger , to the outside observer it appears they merely delayed the inevitable.

[No Idea Either]

That’s right -41, $1 dollar and I believe they also took on all the debt, somewhere around $180 million IIRC.
Nice to have had a clean slate but alas I fear it’s been to no avail.

[porch monkey]

QPG, Wtf are you smoking?

[PPRuNeUser0198]

Dear me QPH. You must be joking? TT has mostly been a 'loss leader. It has only made a profit a couple of times. It has lost more than it has made. It is a loss-maker at nett. For FY19 it was negative EBITDAR. It was essentially bankrupt. It is able to operate because of VA. Be assured - TT is not 'propping up' VA. VA domestic is a cash cow. It is what keeps the VA group functioning as an airline. TT financials have improved now mostly due to reducing cost through less aircraft and obliterated head office labour force. This naturally will increase unit revenue and yield, as they've announced. Also understand that the 'first half' is the 'good half'. The second half is where everything gets very ugly. Being handed clapped out (and paid down) B737's will dramatically reduce the cost base for TT as the lease expense for the 320's exits, and there will be for sure - synergies for maintenance, systems etc...

And you have to look at cashflow. Don't get caught up in 'underlying' and 'statutory' profits so much. Free cash is king!

[turbantime]

How does one garner cashflow stats from the asx release? Serious question.

[Colonel_Klink]

Originally Posted by QldPilotGuy

Umm Virgin "propping up" Tiger ? What exactly is your source ? Did you read and examine the Half Yearly results ?
Tiger actually had the highest load factors on flights in the Virgin Group and with one of the lowest cost bases in Australia it is the profitable part of the group.
It's actually Virgin that is pulling down Tiger, Virgin posted a loss and in response they made almost no changes to the Virgin network but instead culled Tiger which will help their books look better in the short term.
If Virgin think that getting rid of half of Tiger will mean Tiger passengers will fly Virgin they are incredibly misguided, they have literally just handed Jetstar a Golden Egg.

One of the more simple things I’ve read here - and you’ve highlighted very clearly how some pilots simply do not understand the fundamentals of running an airline.

Hint: High load factors doesn’t mean the flight is making money. It’s based on yield. If a TT aircraft departs full and everyone paid $50 for a ticket - it’s unlikely the flight is making money. It’s also why a half full 737 at VA with 4 full fare J class pax might be making money. Given the very low yield of TT flights, they have to have a high load factor (probably higher than where it is at the moment).

Ultimately though it’s Tiger’s cost base that has killed it. The place was really going to struggle as soon as the fleet replacement was delayed for a silly amount of time.To me the fleet replacement made perfect sense at the time it was announced, given economies of scale with VA etc - it was just the implementation that was a complete basket case (not helped of course with the Max issues).

It caught me by surprise though that TT aren’t getting more 73s from NZ - I thought they may have got 5 or so aircraft from there given the bloodbath on the Tasman after the split with ANZ.

Make no mistake - I feel for all the TT pilots given the uncertainty they face, none of which they had any control over. The VA group certainly isn’t a great place to be working at the moment

[PPRuNeUser0198]

How does one garner cashflow stats from the asx release? Serious question.

Statement of Cashflows @ https://www.virginaustralia.com/cs/g...rim-report.pdf

[coaldemon]

A transition to a new type when there were A320's on lease with no exit strategy wasn't the best idea. The concept of buying B737's new and transitioning them through the Business Units at set intervals say 12 years to Tiger and then 18 years to VARA would have made sense if executed correctly. It doesn't seem that was the case.

[coaldemon]

And that cashflow statement for the first 6 months is not good reading either

[PPRuNeUser0198]

Debt is a killer. Their leverage is alarming at 6.4x.

[turbantime]

And that cashflow statement for the first 6 months is not good reading either

That’s because 711 million of that cash was used to buy back velocity at an inflated price.

[VH-ABC]

Maybe Airbus is helping out with that problem.

[coaldemon]

Nothing to do with Airbus they sold the frames to whichever Lessor it was that took on the risk. They will not take over the leases unless they are making a huge markup on the replacements. Also for simplicity if you raise around $1 Billion AUD in the Oz and US markets then spend $700 Mil on Velocity and end up with less cash in the bank after 6 months then there is an issue. I think that is why the CEO was dealing with the Investors today. They may be a bit worried as their bonds lose value in the current market.

[burned_out]

Shall we start the meme's now?

I think this should start the meme piss take... ok... I'll light the fuse!



VA and TT Management

[machtuk]

The road to the cliff face Tigers are now facing started when the geniuses walking into to a pilot meeting & said we are going to change the fleet to B737 & everyone will have to train up on type within 18 months, 3 year bond $45K, that was yeas ago now, thank you!! From that day on the die was cast & it's been a clustetfcku ever since!

RIP Tigers, you had the potential just not the leadership!

[2dotsright]

Originally Posted by burned_out

I think this should start the meme piss take... ok... I'll light the fuse!



VA and TT Management

Great post, SOOOOOO TRUE...Ya won't get much response from the 737 guys (and Gals), most are VERY junior in the company and have never seen any crap in their short careers,,,,which are about to become much shorter. If Seniority is respected then there are about 25 or more 73 Captains who'll be kissing those 4 bars goodbye...Anyway, this is all overshadowed by the calamity happening. If QF is cutting 60% of their domestic fleet then Virgin will go at least as much so the piddling little Tiger hanging there like a dag on the sheets bum is Gonesky.... sorry, but true

[2dotsright]

Great post, SOOOOOO TRUE...Ya won't get much response from the 737 guys (and Gals), most are VERY junior in the company and have never seen any crap in their short careers,,,,which are about to become much shorter. If Seniority is respected then there are about 25 or more 73 Captains who'll be kissing those 4 bars goodbye...Anyway, this is all overshadowed by the calamity happening. If QF is cutting 60% of their domestic fleet then Virgin will go at least as much so the piddling little Tiger hanging there like a dag on the sheeps bum is Gonesky.... sorry, but true

[PoppaJo]

Well...if it’s Last in, First out, they will need to borrow Pilots from Virgin to keep the operation running, as the 737 is largely crewed by the back half of the list.

I assume they will expedite this whole process now essentially with the Airbus ending service sooner rather than later, well rather than sitting around idle for the next few months.

The downtime can be used type training Airbus Pilots so come August they are all set to go.

Are there any VARA opps for these 737 or Airbus guys?

[PoppaJo]

If I had stayed, and joined in 2005 in Singapore, I would have stayed on the Airbus, so after 15 years I get the boot? All the young FOs joined on temp contracts a few years back get to stay and play? Pretty bad.

Scooter might be interested guys.