VA pilots worried about employment 2021

[PPRuNeUser0198]

No offence, but ‘good time to buy’?? At $0.10 per share they may go up $0.02 one day

No offence taken. During the GFC the price recovered within a year from 0.15 to 0.71. I am going to hedge my bets that the price recovers. They're doing the things they need to do in order to improve the financials. What is good is ASK's is stagnant in the DOM market and VA are reducing ASK's which will drive up unit revenue whilst cASK will reduce. The virus will pass. They'll recover. So long as they have enough operating cash flow to keep going (not including the unrestricted cash or further borrowing they may do). Debt remains very cheap.

[Stickshift3000]

Originally Posted by T-Vasis

This is the lowest it has ever been. Fifteen cents during GFC. Complete wipeout in value (and a good time to buy)

There are always two future share prices: higher or lower than current price.
Only if you believe the share price will increase in future would it be a good time to buy...

[DUXNUTZ]

Originally Posted by T-Vasis

No offence taken. During the GFC the price recovered within a year from 0.15 to 0.71. I am going to hedge my bets that the price recovers. They're doing the things they need to do in order to improve the financials. What is good is ASK's is stagnant in the DOM market and VA are reducing ASK's which will drive up unit revenue whilst cASK will reduce. The virus will pass. They'll recover. So long as they have enough operating cash flow to keep going (not including the unrestricted cash or further borrowing they may do). Debt remains very cheap.

Next financial results for Jan - June gonna be even worse.

[Arthur D]

How strong is their balance sheet?

redundancies
Grounded aircraft
route withdrawls
latent capacity

I would suggest there is a distinct possibility they will need to go looking for cash to prop up the operation. Unlikely this will come from existing shareholders.

Meanwhile, as they withdraw, Qantas gains a leg up with every vacated route.

Sound familiar?

I would rather try my odds at the Casino than VA shares

Looking more and more like Ansett every day I’m afraid.

[who_cares]

I’d definitely cover my bet by buying QF shares also. Wish I’d bought in 2008, six months later Va shares had tripled and QF shares doubled.

[ABP]

Arthur D, don't be afraid. Ansett lost $2,300,000 a day in today's rates during its last year or two of operations. That's neatly $850,000,000 a year.

VA has lost $100,000,000 this last six months at a statutory level (incorporating restructuring and one off costs), with an underlying profit of $19,000,000.

VA is on a ruthless restructure which is required and will not be profitable until 2022 at least. With revenue healthy and having increased yearly, they are dealing with their cost base now. I'm sure they'll get there, once the Coronavirus is dealt with.

There have been many silly mistakes written for all to see in their reports such as continuing to pay for debt in US dollars, poor fuel hedging, millions spent on ATR and E190 leases that are no longer being operated etc...

Additionally paying one of the World's most expensive lease agreements for A330s.

All these issues aren't forever and Paul Scurrah is focusing on profit, unlike previous management it would seem.

[PPRuNeUser0198]

redundancies
Grounded aircraft
route withdrawls
latent capacity

All good things that will reduce cost, improve unit revenue and yield. Exactly what they need to do. VA needs to right-size the business and focus on profitable markets - not just compete with Qantas. Just because Qantas operates into a market, it does not mean it is lucrative. It may be marginally profitable at best. VA is generating cash. They can borrow on the market if need be. I wouldn't compare VA and Ansett. Market and business dynamics are very different. Qantas certainly does not want VA to fail. Each has its share of the profit pool in the domestic market. It is harmonious. Whislt JB spent money to lift VA to QF 'standards' - PS is now driving large-scale cost reductions, a focus on profitability, and wants to return VA culturally to be more aligned to its 'roots'. If they can keep generating operating cash - they'll get through this a leaner and more effective business.

[domaus]

Does everyone realise that for the last 5 years QF have been selling assets such as catering and airport terminals? The airport terminals generated over 1 Billion in sales alone. Melbourne sold last year for just under $355 million for example. This has been reported to fund Project Sunrise and aircraft purchases. But they can't sell assets forever. Clever of Joyce to do so, to leave on good terms.

[Mr Google Head]

Originally Posted by who_cares

I’d definitely cover my bet by buying QF shares also. Wish I’d bought in 2008, six months later Va shares had tripled and QF shares doubled.

Hmmmm buying 2 separate airline stocks I don’t think I’ll be coming to you for investment advice 😂😂😂🤪🤪

[who_cares]

Originally Posted by Mr Google Head

Hmmmm buying 2 separate airline stocks I don’t think I’ll be coming to you for investment advice 😂😂😂🤪🤪

If VA was to go under(not saying they will), I’d bet that QF shares would sky rocket.

[AerialPerspective]

Originally Posted by Paragraph377

No offence, but ‘good time to buy’?? At $0.10 per share they may go up $0.02 one day, if a miracle occurred! Years of pathetic management and a share price that since it was floated has pretty much dropped by100% in value would indicate it is a dud investment. It’s a shame, no doubt about it, but a reality. The airline has done well to survive this long considering the type of decision making that has gone on for two decades behind mostly closed doors....Best of luck to the Pilot Group.

Largely the only reason it's survived despite the crap management has been the billions tipped in by it's gullible investors.

[B772]

who cares: Your a rocket scientist !.

All jokes aside.
This is the performance of Aust airline stocks. This excludes any dividends that may have been paid.

Alliance 1 Yr -12% 3 Yrs +226% 5 Yrs +370%
Qantas 1 Yr - 9% 3 Yrs + 38% 5 Yrs + 79%
Rex 1 Yr -33% 3 Yrs + 10% 5 Yrs - 1%
Virgin 1 Yr -46% 3 Yrs - 45% 5 Yrs - 78%

Anyone who is still holding VA shares from the float in 2003 at $2.25 per share should have their head read. In early 2005 a shareholder Chris Corrigan of Patricks was not happy with the direction of Virgin and mounted a takeover to become the largest shareholder with only 62% of the company. Branson would not budge and retained 25% ownership. In 2006 Toll purchased Patricks and attempted to sell the 62% holding. They could not find a buyer. If Branson and other minority shareholders owning 13% had sold to Corrigan of Patricks Virgin Australia would not be in the spiral dive they are today and could have been a more formidable competitor to Qantas . As it is Virgin does not meet the listing rules if it were to be listed on the ASX today.

[AerialPerspective]

Originally Posted by domaus

Does everyone realise that for the last 5 years QF have been selling assets such as catering and airport terminals? The airport terminals generated over 1 Billion in sales alone. Melbourne sold last year for just under $355 million for example. This has been reported to fund Project Sunrise and aircraft purchases. But they can't sell assets forever. Clever of Joyce to do so, to leave on good terms.

The leases were going to end anyway and it was a smart move to sell them back to the airports early and capitalise on their greed, instead of waiting until later and getting nothing for them.

Catering was a sad departure but the economies of scale with DNATA owning hundreds of catering centres and bulk purchasing ability was not sustainable compared to Qantas with 3-6 centres and not benefiting from the same economies of scale. Yes, they could have done some sort of joint procurement with One World but I'd say most of it's airline partners don't operate catering centres anyway.

The sales are shown separately on the balance sheet also and they don't reflect the underlying profitability of the company which would still be there regardless.

[Paragraph377]

But but where did all the money go?

Originally Posted by B772

who cares: Your a rocket scientist !.

All jokes aside.
This is the performance of Aust airline stocks. This excludes any dividends that may have been paid.

Alliance 1 Yr -12% 3 Yrs +226% 5 Yrs +370%
Qantas 1 Yr - 9% 3 Yrs + 38% 5 Yrs + 79%
Rex 1 Yr -33% 3 Yrs + 10% 5 Yrs - 1%
Virgin 1 Yr -46% 3 Yrs - 45% 5 Yrs - 78%

Anyone who is still holding VA shares from the float in 2003 at $2.25 per share should have their head read. In early 2005 a shareholder Chris Corrigan of Patricks was not happy with the direction of Virgin and mounted a takeover to become the largest shareholder with only 62% of the company. Branson would not budge and retained 25% ownership. In 2006 Toll purchased Patricks and attempted to sell the 62% holding. They could not find a buyer. If Branson and other minority shareholders owning 13% had sold to Corrigan of Patricks Virgin Australia would not be in the spiral dive they are today and could have been a more formidable competitor to Qantas . As it is Virgin does not meet the listing rules if it were to be listed on the ASX today.

Very good post. After Ansett collapsed and Virgin Blue floated itself on the stock exchange Branson made a whopping $960m in total. Not bad for someone who ‘wanted to save the Australian public from the horrible duopoly of QF and AN’. Then, after he sold his majority stake he still pocketed $50k per year per aircraft tail for VB using the Virgin logo. That’s why they changed the design and name eventually. Of course he kept a couple of percent invested ‘to show he had faith in the airline’. What a crock. The second biggest winner from the float was Rob Sherrard who pocketed close to $100m once he sold his shares. Not bad for the former bankrupt from Sherrard Aviation. Godfrey waited too long and as the share price dropped he only made around $60m. Godfreys other mates like Bruce Highfield (head of HR) and some others also made several million from the float. The whole concept was to make a select handful of people very very rich while the rest of the workforce earned ****e money because they were blindly following the pied piper Branson who is nothing more than a cluey marketer. They did a good con job, I know of several pilots who borrowed between $50k to $100k and purchased at the list price because they were convinced the airline would be a great investment and provide a robust return. Hmmmm, didn’t quite work out that way unless you were ‘gifted’ all of your shares for free such as what happened with Branson, Sherrard, Godfrey and ‘mates’. Staff were none the wiser, some even still none the wiser today, dedicating their waking moments to working for an airline which paid them peanuts and treated them with contempt behind the scenes. The place was, is and always will be an act of smoke and mirrors. The ultimate glitter coated turd.

[PPRuNeUser0198]

Margin lending. Such a poor investment strategy. People who do this are really misinformed.

but the economies of scale with DNATA owning hundreds of catering centres

And Gate Gourmet as another competitor. The cost base for GG and Dnata has always been lower than QF, and its legacy awards. QF was losing airline catering business. Too expensive. They had scale once. But sold off centre by centre. Dnata has an agenda to 'rule the world'. QF had no hope. QF would have received a very handsome sum for the SYD and MEL facilities.

Lufthansa are also looking to exist LSG and airline catering. Airlines need to get out of it. Focus on the core business for flying aeroplanes and running loyalty programs.

[Cloud Cutter]

Originally Posted by T-Vasis

Margin lending. Such a poor investment strategy. People who do this are really misinformed.

Sweeping generalisations. Such a poor debating strategy.

Have you ever used debt to finance the purchase of real property? Buying shares on margin is no different in principle. The key to success on both counts is appropriate risk management.

[PPRuNeUser0198]

Not really. Margin loans for shares are much riskier than property. Especially if they were purchasing a single stock, and in particular, an airline stock, as indicated above. Having debt secured against the value of the shares which can fluctuate daily leading to a host of issues that do not exist with property. Hit a downturn and you're forced to sell your stocks at a loss or funnel more cash to the lender. And they're also expensive. I am sorry, but there is a difference between the two. Borrowing to buy shares isn't good advice and not worth the risks for the general person.

Back on topic now..

[CamelSquadron]

Originally Posted by T-Vasis

[font="arial"]
And Gate Gourmet as another competitor. The cost base for GG and Dnata has always been lower than QF, and its legacy awards. QF was losing airline catering business. Too expensive. They had scale once. But sold off centre by centre. Dnata has an agenda to 'rule the world'. QF had no hope. QF would have received a very handsome sum for the SYD and MEL facilities.

QF was forced to close its Adelaide catering facility. The Airport would not renew the lease and intends to demolish the building.

[Paragraph377]

Originally Posted by CamelSquadron

QF was forced to close its Adelaide catering facility. The Airport would not renew the lease and intends to demolish the building.

Airport property is a lisense to print money. It’s certainly the cheaper alternative these days to have a third party caterer working from an off-airport site donthe catering and cleaning, depending on location of course. And T-Vasis is correct - margin loans for purchasing shares is crazy, unless you are an inside trader. Then again, some people have been burned brutally by property too, buying during the mining peak in places like Karatha, Emerald, Moranbah and so the list goes on and on.

[wheels_down]

https://australianaviation.com.au/20...airport-board/