Virgin Australia Financials 2019/20

[jakeseven7]

That wasn’t the reason they moved at all. The narrow mindedness of a few on here in their insular Sydney world is a bit sad. Get out more.

GM of Marketing at the time was quoted saying exactly that actually. The irony of that is that he was one of the ones made redundant! JB also wanted Marketing (A key strategic driver of business) close to Corporate.

I'm not from Sydney either btw but it is true that Melbourne especially and also Sydney have attract better corporate talent than Queensland.

 

[Mr Pumblechook]

VARA are based in Perth at 111 St George's Terrace. I expect that to be fully shut down.

I wonder how much VA paid for Skywest only to shut most of it down

 

[Spongbob]

I could do this research myself, but ...
Does anyone know the price VAH sold the 30% share in Velocity FF several years ago?
I think it was much less than the $700 million (AUD) they raised to buy back the 30% share?

 

[muppet]

I could do this research myself, but ...
Does anyone know the price VAH sold the 30% share in Velocity FF several years ago?
I think it was much less than the $700 million (AUD) they raised to buy back the 30% share?

Yep, around $300 million if memory serves.

That's certainly an interesting way to try to make money ....

EDIT: $335 million

Virgin Australia to buy back rest of frequent flyer program for $700m

Virgin Australia said it entered an agreement to buy back the 35 per cent of its Velocity frequent flyer program that it does not already own from private-equity group Affinity Equity Partners.

www.smh.com.au

 

[Spongbob]

Even adjusting for inflation, the $335 million of 2014 is only about $360 million today. So I guess Affinity Equity Partners would be happy with the sale back to VAH of their 35% share in Velocity.

 

[jakeseven7]

Interesting article today about the airline duopoly, being staunchly defended by the fact that VA is losing money hand over fist and 'duopolists don't lose money'!

'Duopoly' accusation over rising Sydney-Melbourne airfares

Australia's airport lobby group says a 73 per cent increase in the cheapest available airfares between Sydney and Melbourne over the past nine years is proof that Qantas and Virgin's "cosy duopoly" is hurting consumers.

www.theage.com.au

 

[harvyk]

Interesting article today about the airline duopoly, being staunchly defended by the fact that VA is losing money hand over fist and 'duopolists don't lose money'!

'Duopoly' accusation over rising Sydney-Melbourne airfares

Australia's airport lobby group says a 73 per cent increase in the cheapest available airfares between Sydney and Melbourne over the past nine years is proof that Qantas and Virgin's "cosy duopoly" is hurting consumers.

www.theage.com.au

Duopolies can still exist in one area, and yet lose money overall. Yes they may be keeping in step with each other over this one route, but VA (and QF) fly to more places than SYD-MEL, and on many of those routes they are competing with more than just each other.

It's entirely possible that VA are using SYD-MEL to subsidize other non-preforming routes.

Of course, there is all sorts of ways for accountants to make a company look like it's failing whilst actually making a profit (and vice-versa). Not saying that's what's happening here, but certainly we as pax probably won't lose if someone does take a magnifying glass to things from time to time.

 

[Isochronous]

Interesting article today about the airline duopoly, being staunchly defended by the fact that VA is losing money hand over fist and 'duopolists don't lose money'!

'Duopoly' accusation over rising Sydney-Melbourne airfares

Australia's airport lobby group says a 73 per cent increase in the cheapest available airfares between Sydney and Melbourne over the past nine years is proof that Qantas and Virgin's "cosy duopoly" is hurting consumers.

www.theage.com.au

Should've all bought SACL shares when they first floated!

 

[justinbrett]

Ansett did a pretty good job of losing money. And before you say it wasn’t a duopoly when they folded, they started burning money long before Virgin entered the scene.

 

[Saab34]

Poor comparison for MEL-SYD in that timeframe. Tiger has just started Sydney then Jetstar entered it a few months after, between them there was an extra 15-20 daily flights a day compared to the previous year. Fares most certainly crashed when that started.

Tiger went into that Christmas with like 10 flights a day, Jetstar also started the Tullamarine-Sydney run with 8-10 flights a day. That’s probably one of the largest capacity influxes ever seen in such a short time on the domestic front.

 

[flydoc]

Trigger pulled:

According to media, PS will announce at the VA AGM today that the underperforming Melbourne to Hong Kong service will be dropped, along with a 2% reduction in domestic capacity with a focus on optimising VA and TT roures and markets.

Virgin Australia swings axe on international and domestic routes

Virgin will drop its Melbourne to Hong Kong service and cut back on some domestic routes as it looks to avoid financial turbulence.

www.theage.com.au

 

[woodborer]

It's in the ASX announcements. See speech by PS.

https://www.asx.com.au/asxpdf/20191106/pdf/44b9zfnt7fks80.pdf

 

[Must...Fly!]

Interesting. Wonder if the F100s will be sold or parted out to sort the remaining fleet.

 

[TheInsider]

It's in the ASX announcements. See speech by PS.

https://www.asx.com.au/asxpdf/20191106/pdf/44b9zfnt7fks80.pdf

I read that statement and it seems very basic. So many 'we', and so many short statements, so many 'one, two three' etc. Sounds like something Trump would write or say.

Also the new buzz word 'laser focus'....

 

[Melburnian1]

Perhaps a new CEO can't do everything immediately, and there may be constraints such as aircraft leasing arrangements, or, if aircraft are owned, a perception that selling them will realise poor value for investors BUT it's surprising that he hasn't announced the closure of TT.

It's a chronic underperformer - continual losses or at best inadequate profits, shocking timekeeping, a divided fleet, cancellations and most of all (like JQ) it doesn't enjoy a great reputation among travellers.

The further two per cent reduction in VA capacity will help both it and QF/JQ raise fares - although the reluctance of leisure travellers to set foot in a plane may be 'pull' in the other direction.

 

[dajop]

BUT it's surprising that he hasn't announced the closure of TT.

Decoding his speech, it seems it will be pulled back from golden triangle routes, in favour of OOL, MCY, CNS ....

Some of them are about getting the balance right between Tigerair and Virgin Australia. There are many instances where we have both aircraft operating on the same routes at the same time. For example, we’re looking to focus Virgin Australia on routes that have a business and leisure orientation. We’re also looking to re-focus Tigerair flights on key holiday destinations

 

[Melburnian1]

Decoding his speech, it seems it will be pulled back from golden triangle routes, in favour of OOL, MCY, CNS ....

dajop, what's your view on TT routes like SYD - PPP and return that run four days a week?

Classic leisure route, but is one like this a (further) drag on TT? One to keep, or for chopping block?

 

[HS-TQE]

TT if I recall correctly tried SYD-MCY twice (once under SIA ownership and the most recent attempt under VA ownership) and ultimately failed on both attempts.

 

[dajop]

dajop, what's your view on TT routes like SYD - PPP and return that run four days a week?

Classic leisure route, but is one like this a (further) drag on TT? One to keep, or for chopping block?

Hard to tell, looking at fares not performing that differently to JQ, sometimes you see TT significantly lower priced than JQ, but this does not seem to be the case on the four random weeks I looked at. Whether it is profitable or not is a different question. It may well be one to keep though.

 

[ozfflyer]

Interesting. Wonder if the F100s will be sold or parted out to sort the remaining fleet.

VA & Alliance are close. Surely Alliance would take the F100s & either part them out for own use or squeeze any life left in them before major expensive check due. IIRC called a D check. Maybe Alliance would take over some of the very thin VA routes.

Can an F100 do eg. BNE/HIR or too much over water ?