Sorry LGR, just a poor attempt at humour. :O

Don,t VB rent everything ? Cant be worth that much.

What will the VB share price be when finally QANTAS decides to sue for the use of its paint scheme.
Just saw a billboard for V Aus and it looked like the big Q....Not to mention the VB rip-off contrast of the big Q..
There could be a reason for it though..

What happened to Virgin Values???
 

From what I've read here and the opinions of mates inside VB the past strength of its once great esprit d'corp and positive relationship with management has gone. That kills productivity. Well known fact - just ask South West (USA) and their legendary President / CEO Herb Kelleher.

...and that is exactly why Virgin is really in the position that its in.

Many of the founding staff, who were the most passionate, and productive, have turned their backs on the place and what is left are a legion of micro-managers who have no interest in Virgin values, strategy or entreprenurial teamworking.

When BG wakes up and starts to demand the 'Virgin' being put back into managerial performance then maybe there will be a long term future.

:(

If Vb is such a good product then why hasn't the market spoken and bought all the good valu shares at $0.85.
Scratch and sniff.....................starting to smell pretty bad!

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

With the VB share price below 50 cents (after floating at close to $2.40) how low can this share price plummett before the inevitable?

I spoke recently with an analyst with Standard and Poors who by the way give companies their credit ratings worldwide.
He stated that unless VB cuts something like 35% of its fleet, concentrates on primary trunk routes primarily with a higher yield and/or raise their prices by up to 30% they wont survive.

Also suggested was the idea of dumping the B777's to the USA which would incur losses for a few years that VB just cant afford.
Those preliminary figures were apparently costed at a jet fuel price of US$95 per barrel and the losses to the USA could skyrocket even further with jet fuel at around US$160 per barrel!

To make matters worse Mr Godfrey recently purchased a large number of shares at around 75 cents per share.
His vote of confidence didnt seem to impress anyone else.

Any takers?

It begs the question, What is going to happen in the Australian aviation industry in the near future?:hmm: Or is it just another one of lifes speed bumps?

The bogans are going to have to get used to paying more for air travel, most of them make more $$ than pilots anyway these days.

I know a lot more about finance than piloting and this is such a dumb question to ask about a company which has so few shares available for trading that it ought to be delisted from the ASX.

These sort of bleatings about VBA have been going on since they were listed. Every single analyst projection about the company, for which one of my family flies, has proven dead wrong or turned out to be a Qantas inspired wet dream.

A year from now there will still be a Virgin Blue. The flights will still be chokka. It might even make money. It will have at least half a billion left in cash. Get over it.

I agree, with such a small proportion of the company listed the share price doesn't effect the company directly as much as others, like Qantas. The fact is they do have quitea large cash reserve. There loads are as good as any other carrier. Like ALL airlines high fuel will mean lower profits. However overall the business model is sound. The EMB will help manage low yielding routes. They have most of the terminal/gates locked up in most capitals. Like all airlines they Are deferring planes where they have too. They will be around in a year and more. Low share prices like for all us (as in supers etc) only are bad if you need to sell now. Which most people wont.
A bigger question is how long tiger will keep going. Yes singapore backed however losing nearly $1 mil a week as I have it on very good word even they wont back something like that forever. I know many of the tiger guys moving to jetstar recently are very relieved and happy to get out now.

With all due respect, your mate is an S&P analyst (i presume), what would he know about running an airline! Cut 35% of the flleet? Big call from a speculator!
Half of these clowns wouldnt know if their rear ends were on fire.

Onya Silverslueth! - 'Many of the Tiger pilots', Crikey! I know of two such people, doesn't sound like MANY to me!

A little off topic there Silversleuth but in answer to your comment about the Tiger pilots, I've heard that they only moved for personal reasons. They didn't want to leave, but Jet* offered them the base of their choice. Something Tiger cannot do at the moment.
The other thing I heard is that they are not making as much money because of the cost of fuel, not as you say .

Have a nice day :ok:

This would be the same standards and poors that gave most of the credit and finance companyies in the US AAA ratings just before the Credit Crunch? They deserve to be in jail!

Silversleuth

".....losing $1m per week, I have it on very good word....."

FROM WHERE MATE, do you have it on very good word?? Since people inside the company get told nothing, cannot find out anything, including where the next base will be, how the hell would you know??!!

Nice try mate, but very transparent.

AA and United
 

I wouldn't have believed it as I'm moving there at the end of the year (US), but AA will cut 7000 jobs by the end of the year and United have binned 750 pilots. Yes there will still be an AA and United, but what will it mean for those working for them.

Why then would VB be any different?

I fear the good times might be over for this industry. I hope I'm wrong.

American Airlines to cut 7,000 jobs - Times Online

950 pilots at United Airlines to lose their jobs in layoffs - USATODAY.com

Beacuse they are trading profitably!!

There is a WORLD OF DIFFERENCE between what the share market values the shares at and whether the company is profitable. Many of the rising stars of the share market disappear in a blaze of (in)glory.

FMG shares were going ballistic before one shovel of iron ore had been exported. The share market deals in perceptions and clearly people are worried about VB. As they are worried about QF also.

The VB share price (50c today) is certainly taking a battering but THIS HAS NO BEARING on the short to medium term viability of the company.

Those old enough to remember the stock market "crash" of 1987 will know that the media were fortelling the end of the world as we knew it. It rapidly became apparent that the sharemarket and real world economy are very much disconnected.

VB continue to pack aircraft with us, the great unwashed and so long as costs remain less than incomes then all will be fine.

As to whether their shares are a good investment...remember that for every seller getting out at 50 cents, someone is buying in because they thing it is a good buy...perhaps undervalued. What is break up valuation anyway?

Really ???

Guys,
Regarding that 1mill TT loss, well that might be TR, but not TT. TT are doing much better than TR, mainly cause TR has long and horrible flights, not 1hour lengths etc....

Shelly starts at TT next week, so mabye they are heading for the better

And yes, SQ wont keep funding Tiger if they keep recording loses, abit like QF with JQAsia. Its been 4years before $5mill profitability is announced, so god help us whats next:eek:

It'll get worse before it gets better
 

From today's Oz


Virgin Blue facing $75m loss: analysts | The Australian

:eek:

A well presented fella walks into a village in the jungle and announces that he will gladly purchase any monkey for $10. The villagers were thrilled and rounded up the nearest monkeys and sold them to him.
The next day the same fella offers $20 a monkey, and after much searching the villagers managed to find more monkeys.
The next day he offered $30 but only a six turned up. The next day $40 with only one or two, and the day after $50 until he had all the monkeys in the region in his cage.
Then he announced that he had to leave on business for two days but his assistant would purchase any new monkeys that were presented for $100.
After he left the assistant told the villagers that if they bought the monkeys in the cage from him for $35, they could sell them back again to the fella for his asking price of $100.
The villagers couldn't have bought the monkeys off him any quicker than they did. And they bought all the monkeys back.
That night the assistant too had to leave on business for two days.
And neither he nor the well presented fella were ever seen again.

You now have a thorough understanding on how the stock market works.

halas

Brilliant. In a nutshell. Pretty much sums up most of the "reports" that come out of the market too. If you take the time to actually read the so called reports, you see that they are full of "maybes" "ifs" and "might" and "based on this scenario" They are simply predictions, and generally no more accurate than your average Tarot card reader!

Same thing with oil as well. Get in early and buy huge quantities cheap. Talk the price up with reports of supply shortages, "peak oil", instability in producing countries etc. Lead the market along by placing a few contracts to buy at high prices. Sit back and watch the price rocket ahead as everyone else tries to get in. Sell out just before the bubble bursts and count your profits. :rolleyes:

The other thing to remember is that if these "analysts" are so freaking clever why do they work for wages for someone else? Why aren't they all retired at 35 and rolling in money?

Yep, rolling in bs just gets messy!:ugh:

Most airlines based their basic model (equipment,routes,frequency,staffing levels etc) on oil prices about $90 per barrel one year ago. Fuel then was around 25% of operating cost for a large operation with jets.

Oil is now approaching $150 dollars a barrel, if you have not hedged prices fuel has jumped 10-12% as a percentage of operating cost to 35-37%.

Depending on the airline this will erase profit and in some cases put you into the red.

A model that worked one year ago will not work now without major adjustments. Oil prices may come down, but if they do not all airlines (including Virgin Blue) will have to make large adjustments to their basic model to survive.

If you work for an airline that is not changing at the moment it is either being subsidised by the share holders in some way or it is going to go broke.

A year ago AUS$1 would buy US$0.70, now US$0.95.

So 1 year ago US$90 barrel of oil = 90/.70 = AUS$128
Today oil $145 barrel = 145/.95 = AUS$152

The sky is not falling for australian airlines.:ugh:

I would have to say that all the Aussie carriers are doing that. They have been very tight fisted when giving out pay rises and will certainly use the high price of oil to continue on with that. VB has put a pay freeze on middle management something that QF could announce to help with there continuing and upcoming EBA negotiations.

VB has a very low cost model, don't forget last year they made over 200M profit so they certainly have the costs they can control sorted out.

QF has palmed off the no so profitable routes to its LCC to do the same.

The situation on Australia is certainly no different from the rest of the world with regards to the price of oil but the US economy is in much worse shape than ours at the moment and you can't compare the two.

Australia still continues to be in demand by countries such as China and India and that may be the difference in the coming months or years.

I read yesterday that the price of oil is also being affected by the weak US dollar. I wonder if anyone can chart the two to see if there is any correlation in that.

sorry Desmotronic , but anybody who gets paid in $USD will tell you that a year ago the xchange rate was around 80 - 83c and dropped to a low of 78 in August. It has not been as low as 70c since 2005. It's just a minor point, but if we're going to put up stats, let's get 'em right.

Fair enough if you want to be precise, 71c low in march 2006, at that time oil hit a low around US$60. Illustrates the point though. Currency movements have offset more than 50% of the rise in the local fuel cost assuming nil hedge. With partial hedging the cost change is even less.

How about 6 months from now... AUD$1 = US$1.05 - $1.10 ?

Even if oil holds at these levels with an appreciating AUD$/US$ , we could easily see falling local fuel costs. This scenario seems likley since the aussie is rising against almost all other currencies (on the back of the biggest mining export boom in history) while US$ is doing exactly the opposite. ie it's not just a unilateral case of a weak US$.

What to do in your position oldhasbeen...? Buy gold with your greenbacks... :E

Fact: on 20 Feb, DJ announced first half-year profit of $113m (source: DJ website)

Fact: on 11 Apr, DJ issued a profit warning that 07/08 full-year profit would not exceed $100m (source: The Age, Virgin Blue shares head for a tailspin | theage.com.au)

Already we're talking about a second half loss, the question is how much. I guess we'll find out next month.

At 50c a share, DJ is worth A$525.6m. And for every 1c drop, the company loses $10.5m in value. If it comes to a point where the company's assets are worth more than its shares, wouldn't it make sense for the shareholders to just sell everything off and call it a day? DJ owns about 20 737's, and their list price is US$57-79m (source: Boeing website). Let's say they're sold off at half-price, or for argument's sake A$25m a frame, you'd get A$500m. And there's those brand-new E-jets.

If I was Toll Holdings I'd shut it down. Shareholders don't like bad investments. How much more money could you pour into it?

Those financial analysts may know f**k-all about the airline business, but I wonder how much the DJ management know it either. The Embraer was a big mistake, and they're pressing ahead with a new airline flying to a country whose economy is yet to hit rock bottom.

if you look at VB price chart with the axis set to log scale it is starting to look sexy at 50c... :8

Gee I wish I had a BAD INVESTMENT that returned over $200 million last year and about $90 million this year!

How can you say the E Jet was a mistake, based on what?

Yes and when the US economy tanks and AUS$1 is buying US$1.10 then doesn't that make it attractive to AUSTRALIAN travellers?

One can presume that analysts within VB ran the ruler over the operation, costs per seat/km, capital or leasing costs, break even point per pax load, route evaluations before the H/O bean counters had a say. I doubt if BG decided to have a few "coz they looked nice". I have no inside knowledge but perhaps some credit is due to VB for being able to evaluate the options. If you reckon they were wrong then let's hear why.

Lol, I work for a airline like that:)

Betsy,

You have to own the aircraft outright to make that work. I'm not sure about the 737's but I don't think VB would have paid cash for the E-Jets.

None of the E Jets are leased from a leasing company

The E-jets have been plagued with technical problems. Yesterday alone VH-ZHB was broken all day in Sydney. 11 flights got canned.

If A$ reaches that level, it'd mean the US economy being in a deep recession, or the RBA official rate much higher than current 7.25%. Could many Aussie travellers really affect overseas holidays when their mortgage rate is 10%+, or Yanks visit down under?

I've been hearing rumous that SQ could possibly buy out DJ ... does anyone else even think this is a possibility?

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

Like any company, the lowest this company's shares can go is zero.

I'm not trying to be 'funny, but that is a risk inherent in stock market investment.