Virgin Australia - any big announcements' for 28 Feb?

[ric_melb]

Of course there are many dimensions to the Australian airline industry, with the two main airlines being Virgin and Qantas.
As most of us think and feel, Qantas has made many mistakes, and its loss is not just impacted by events outside its control.
However these Virgin results seem to highlight that Borghetti's strategy has adversely affected the profit pool of domestic airlines.
The statutory Virgin loss after tax was $83.7 million. However if you add the Virgin loss of 49.7 million, the Tiger loss of 18.4 million, and restructuring losses of 49.9 million, you get a total of $118.0 million. Seems to me both Borghetti and Joyce need to focus on making domestic profits and end the capacity battle forthwith.

 

[Must...Fly!]

The most interesting thing I found in all the VA pages was what was not there - no information at all about future staffing requirements, capacity, route or profit planning.

 

[under the radar]

the egos of those in the 'ivory tower' affect the lives of those that support them... classic 'pyramid' ... no secret JB bears a grudge against his ex employer (QF).. and I suppose he thought he was 'safe' in his 'crusade' (with the 'support' of various airlines' wallets) to topple QF..

 

[Mal P]

I just had my Silver status upgraded to Gold... even though I was 400 points away from qualifying and my review date is in September. I now have a new review date of February next year. Interesting... wonder why they did that?

 

[robd]

I just had my Silver status upgraded to Gold... even though I was 400 points away from qualifying and my review date is in September. I now have a new review date of February next year. Interesting... wonder why they did that?

Did they email you with the change, or were you logged in and noticed?

 

[eastwest101]

I just had my Silver status upgraded to Gold... even though I was 400 points away from qualifying and my review date is in September. I now have a new review date of February next year. Interesting... wonder why they did that?

And have you got a lot of forward bookings between now and Sept? Or possibly your employer changed from another airline to VA or something like that?

 

[Mal P]

I didn't have any emails from them, just logged in and noticed a line in my activity history that said "Status review - see Account Details" and when I scrolled up, I was Gold! I only have a return domestic ticket and a return international booked, all in Economy so not enough to have covered the status credits required for the upgrade but they must have just bumped me up. I wonder if this has happened to anyone else? Perhaps they are trying to lure customers away from "troubled" Qantas or something like that (my company predominantly flies with Qantas) similar to the status match thing they had going years ago?

 

[mannej]

Could it be remnants of their old status system where they placed the upgrade error down to the fact it was Friday the 13th? ;-)

 

[Dan_]

I'm sitting on 470 SC and didn't get an upgrade. I am currently in the lounge waiting for my flight to Syd that will net me 40SC so on my birthday I will get a present from Velocity

 

[eastwest101]

I haven't read the full transcript of Borghetti's announcement but it was interesting to see his not-so-subtle "I'll see your evil foreign investment/overcapacity argument and raise you a complaint about the effect of the carbon tax" comments, and I also note him usng the "end of the age of entitlement" language in a press conference when asked about Govt Debt Garantees - no surprise where those points were aimed at as its fascinating to see CEO's using politicians own catchphrases back at them.

The Eureka Report had some comments about VA looking at a business efficiency program and a few numbers and update on Velocity membership at the end that may be interesting for some:


Virgin swings to first-half loss


Staff Reporter28 February 2014

Virgin Australia Holdings has followed suit with rival Qantas Airways in declining to provide guidance for the rest of the year, as it too swung to a first-half loss.
In the six months to December 31, the airline posted a net loss attributable to members of $83.7 million, a 463.9% decline on the $23m profit recorded in the previous corresponding period.

The airline said its first-half performance was impacted by achallenging trading and competitive environment; ongoing subdued consumer sentiment and economic uncertainty; the effect of strong market capacity growth, as well as the unrecovered $27m cost of the carbon tax. In the same period revenue was $2.242 billion, a 6.4% increase on the $2.106bn recorded in the first half of 2012.

Earlier this month, Virgin had flagged a loss before tax in line with the analysts' median forecast of $49 million. It delivered just that with a pre-tax loss of $49.7m. The figure excludes the impact of Tiger Airways Australia, as well as business transformation and other expenses. At the end of the half, Virgin's total cash position was $896.4m, while its unrestricted cash position was $665.4m. Both are improvements on the respective $315.9m and $338.9m recorded at the end of the previous corresponding period.

Virgin said its business efficiency program continues to progress towards the target of $400 million in coughulative productivity gains for fiscal 2015, but also noted it has found additional cost saving initiatives, over and above this program, that will be implemented over the next three years. The group declined to pay a dividend. Virgin's results come a day after rival Qantas swung to a first half statutory loss of $235 million and announced plans to axe 5,000 jobs as part of a bid to cut $2 billion in costs over three years.

Uncertain environment prohibits guidance: Borghetti
Virgin chief executive officer John Borghetti said the airline's focus for the first half had been consolidating its position as an effective competitor in all key market segments. In achieving this, he said several major strategic initiatives had been executed, including the restructure of its the balance sheet and the completion of strategic investments. "Given the infancy of these initiatives and the tough operating and trading environment, we are yet to see their full impact," he said.

In the 18 months ahead, Mr Borghetti said Virgin will focus on optimising the business for consistent and sustainable performance. "This will be achieved through accelerating efficiency and productivity initiatives, both internally and through leveraging the scale of our alliance partners, fast-tracking penetration into higher-yielding market segments in order to grow yield, continuing to lead the Australian industry in customer experience and creating value through our customer loyalty program."

Mr Borghetti said given the uncertain economic environment, the group was unable to provide guidance for the remainder of the 2014 financial year. However he said Virgin had increased its proportion of domestic revenue from the corporate and government market. It had also outperformed Qantas on the key measures of growth in total group revenue, domestic yield, international Yield and group revenue load factor. Virgin said it was beginning to see positive results from its acquisition of the Skywest business in April 2013. "Consistent with expectations, Skywest remains on track to be earnings accretive from financial year 2015. Virgin said following strong growth in the first half Velocity Frequent Flyer membership now exceeded 4 million. “We continue to see growth across all key metrics and we are confident of achieving our target of 5 million members by the end of the 2015 financial year," Mr Borghetti said.

 

[robd]

I didn't have any emails from them, just logged in and noticed a line in my activity history that said "Status review - see Account Details" and when I scrolled up, I was Gold! I only have a return domestic ticket and a return international booked, all in Economy so not enough to have covered the status credits required for the upgrade but they must have just bumped me up. I wonder if this has happened to anyone else? Perhaps they are trying to lure customers away from "troubled" Qantas or something like that (my company predominantly flies with Qantas) similar to the status match thing they had going years ago?

Hmmm…. Mine still shows April 2014 review. 2 flights in My Bookings - 1 domestic Y & 1 International J.

 

[JohnK]

Probably an increase in routes and new aircraft orders after Qantas passengers vote with their wings and move business on the 27th.

Move business to Virgin?

You can see it any way you want but the grass is definitely not greener on the other side.