What is Virgin Australia's strategy (post-administration)?

[Saab34]

Virgin needs to show investors improved financial health vs the same period last year, that is incredibly important, something its major competitor is doing. Considering the curve balls in this half, I remain skeptical. Many of the issues are of VA’s own doing.

Investors put up with nothing but excuses for most of the last decade, the appetite for more of these moving forward are incredibly low.

If profit trends backwards, it will be the stock standard fuel headwinds, weather, air traffic control, employees behaving badly, wage hikes, and so forth.

That’s great and all, but we heard all that rubbish for the last decade.

 

[RooFlyer]

Virgin needs to show investors improved financial health vs the same period last year, that is incredibly important, something its major competitor is doing.

Is Qantas showing improved financial health over last year? Last year was an absolutely bumper profit. Whereas this year they have all sorts of additional, maybe one of costs such as the sacked worker court case settlement, pending and uncertain ACCC penalty costs, and other costs to reinvigorate the airline and it’s appeal.

We really need to get our minds around the fact that investing in an IPO of Virgin is not just an investment in the company, but also an investment in the sector, and also the overall market going forward.

A very sexy and profitable stock at the moment might struggle more than it should if the overall sentiment in the market is bad, because investors look not just at the value proposition at the moment, but the value and performance outgoing forward and if the market is looking like a bear market, then nothing will help the IPO.

 

[Saab34]

I wouldn’t call Virgin’s last FY results as too sexy. $109m H1, $4m H2 didn’t really have analysts jumping for joy. Many questioned during what was a high demand/fare time, ‘is this the best as it will get’, while others cautioned if they had cut enough costs.

Time will tell.

 

[HS-TQE]

VA is a long way from listing if this year is to go by. I remember at this point last year leading into January this year that some of the posters with their insiders sources and their fans were insisting that "VA will be listed in 2023!", only to backpeddle when there were further issues in VA later in the year (outside of the issues not in their control) that was pretty much self inflicted by Bain themselves.

 

[anyonebutqantas]

Can't believe anyone would ever buy VA stock though. Just not a good value proposition - a confusing and uninspiring business without a clear market position

 

[ThatMrBlake]

Strategy is apparently the new planes and building trust through luggage tracking…

https://www.theaustralian.com.au/business/aviation/new-planes-luggage-tracking-virgin-australias-plan-to-turn-its-tarnished-image-around/news-story/cc8ecdced01af05ee7666b99bbc5a69e?amp

 

[Saab34]

Strategy is apparently the new planes and building trust through luggage tracking…

That is a tone deaf response.

Stick a piece of A4 paper in every executives
office with number 80% on the wall.

No bonuses until they hit that basic performance target.

That is what we want. I don’t care about baggage tracking, Apple does that for me live. We just want decent performance. Management need to be held to account for the rubbish performance over the last half.

 

[antycbr]

I don’t care about baggage tracking, Apple does that for me live.

Quite.

The AirTags are great when you’ve been rerouted due to a VA cancellation so you can see that your bag never made it on to the flight.

The crew also seem to lack any form of urgency to turn an aircraft. The only time I’ve seen an incentivised crew was when the aircraft was flying HBA-SYD up against the curfew, otherwise it’s a comedy show of people running up and down the aerobridge.

To VA: OTP and schedule integrity are important. I won’t keep booking you if they don’t improve.

 

[twinaisle]

The crew also seem to lack any form of urgency to turn an aircraft.

Are you onboard to see any of this "lack of urgency"?
No one will be boarding until catering have catered, the aircraft has been cleaned and wheelchair passengers are off.

I've given permission for boarding multiple times before the time were supposed to and what has that archived? Nothing. More time of ours wasted and we still left on-time. Passengers are slow. I push for ground staff to follow procedures and commence offload at -10 these days.

The last thing we want to do is to be at work any longer than we have to.

Maybe thank your fellow passengers for causing a lot of mess in the aircraft with spilt chips, popcorn and rubbish which requires even more time to clean.

No one's going to be working faster than they already are. Everyone's tired. Minimum turns are 35 mins and if we're late, we're late. It's the company's problem and not ours.

 

[antycbr]

Are you onboard to see any of this "lack of urgency"?
No one will be boarding until catering have catered, the aircraft has been cleaned and wheelchair passengers are off.

I've given permission for boarding multiple times before the time were supposed to and what has that archived? Nothing. More time of ours wasted and we still left on-time. Passengers are slow. I push for ground staff to follow procedures and commence offload at -10 these days.

The last thing we want to do is to be at work any longer than we have to.

Maybe thank your fellow passengers for causing a lot of mess in the aircraft with spilt chips, popcorn and rubbish which requires even more time to clean.

No one's going to be working faster than they already are. Everyone's tired. Minimum turns are 35 mins and if we're late, we're late. It's the company's problem and not ours.

Some individuals are trying hard but the net result is that nothing happens on time. I appreciate your effort but you are ultimately part of the company and the products it provides. I appreciate you are doing your best in a difficult situation.

The bigger issue is that the company has too aggressive a schedule to deliver reliably and all of the parts required (gate, ramp, catering, tech and cabin crew) are not able to work in unison to get the aircraft away on time except when there is a bigger external threat (curfew).

 

[SCM]

I think VA strategy should be simple and uncontroversial, and I think they are actually working on it, it's just some tidying around the edges.

VA makes the best profits flying domestically, so the focus should be strengthening domestic routes, more owned aircraft - at least for the maxes (higher profit margin long-term, better strategically), focusing on the lounges (lunch/dinner food is terrible and devoid of meat). There isn't that much fundamentally wrong with it, in principle it's primed to make a lot of money - they need some expert process engineers to figure out how to get timings and performance correct, probably delays are a problem of too high aircraft turnover (ie. lack of aircraft), beyond the recent weather problems all around the country.

I think a lot of things will improve once they get the new aircraft delivered, which will lead to right-sizing the fleet, then the name of the game will be fleet renewal. Now than Qantas has finally decided to buy some new aircraft, VA will need to keep up in deficiency for pricing & profit margins. They could replace their aircraft on a 10-year time period and that will be just fine and affordable, the older aircraft can do the golden triangle all day without an issue still generating lots of cash.

 

[wenglock.mok]

Some individuals are trying hard but the net result is that nothing happens on time. I appreciate your effort but you are ultimately part of the company and the products it provides. I appreciate you are doing your best in a difficult situation.

The bigger issue is that the company has too aggressive a schedule to deliver reliably and all of the parts required (gate, ramp, catering, tech and cabin crew) are not able to work in unison to get the aircraft away on time except when there is a bigger external threat (curfew).

I was witness to one of these aggressive turns today in ADL on VA441, which was turned around from an already very late VA434. Thankfully (and in part due to the threat of us getting very close to the SYD curfew), the ground crew and cabin crew got all of us onboard, sat down and ready for departure within the 35 minutes that they had planned for it but boy was it stressful for everyone, especially for the cabin crew and it really showed in their faces.

Looking at FR24, this is not an uncommon occurrence so I'm not sure why they feel they need to schedule these 35-40 minute turns on an aircraft's line of flying as that gives the aircraft no chance of recovering from delays that accumulate during the day.

 

[Saab34]

I’m not sure if new aircraft are the issue here, or if old aircraft are the problem.

There isn't that much fundamentally wrong with it, in principle it's primed to make a lot of money - they need some expert process engineers to figure out how to get timings and performance correc

So the Management of this company isn’t essentially match fit? That’s how it comes across to me, as in amateur hour.

I think a major factor here that Management needs to look at is the relationship between themselves and the front line teams. It’s an industry that skews highly front line, only 5% are not somehow involved in the operations side of it. I don’t believe the ops staff are onboard with management, so nobody cares. That relationship will likely sour further when the place goes public, and Management then resign and walk off with million dollar payouts from the listing. Let’s be serious, it’s the only reason they joined this mob, to get that large payout, as leaked in the media the other year.

 

[SCM]

I think a major factor here that Management needs to look at is the relationship between themselves and the front line teams. It’s an industry that skews highly front line, only 5% are not somehow involved in the operations side of it. I don’t believe the ops staff are onboard with management, so nobody cares. That relationship will likely sour further when the place goes public, and Management then resign and walk off with million dollar payouts from the listing. Let’s be serious, it’s the only reason they joined this mob, to get that large payout, as leaked in the media the other year.

Probably, I think they hoped to do some very simple set of things and float making a profit. In reality, the IPO markets are still dead, and the longer they don't IPO, the more under-the-surface issues will surface, which if not dealt with, will ultimately negatively impact eventual valuation.

The standard in AU is appallingly low, I heard from some QF pilots that Vanessa is getting on the ground and getting busy fixing problems which AJ ignored and/or let happen during his tenure as useless idiot. I would imagine VA, especially after the restructure also has a lot of problems to get through, and someone needs to be working through them with an eye on the long-term prosperity of the airline. The thing is, I'm sure that's not exactly the set of goals set out for Jayne H, I'm guessing she probably has only short-term profitability related goals, not necessarily operational smoothness, reliability, on-time performance, etc.

 

[twinaisle]

I'm not sure why they feel they need to schedule these 35-40 minute turns on an aircraft's line of flying as that gives the aircraft no chance of recovering from delays that accumulate during the day.

It's purely so we can work up to 4 flights a day. Longer turns means less productivity but the trade off is that you sometimes get crew who are tired and don't seem to care especially if it's sector #3-4 and delays

 

[wenglock.mok]

It's purely so we can work up to 4 flights a day. Longer turns means less productivity but the trade off is that you sometimes get crew who are tired and don't seem to care especially if it's sector #3-4 and delays

Thank you for the hard work that you all do!

See, my thoughts are when you run into a curfewed airport on the last scheduled sector of the day, the onus then is on the poor ground crew and cabin crew who now have to try to manage turning the plane around in a less than realistic timeframe, which was what happened yesterday. That is barring all the other stuff that may happen that falls outside of their control (e.g. engineering issues that pop up, flow control).

So at the end of the day, yes the cabin crew on my flight looked tired and flustered but they still cared enough to offer us multiple top-ups of beverages, and brought us a very nicely laid out pantry tray full of snacks for us to take with us. Your management are really lucky to have staff like that and I hope they realise it before it's too late! I will definitely be dropping them a note to let them know about this ridiculous situation although I'm convinced they wouldn't care since I have no status with them.

 

[twinaisle]

Thank you for the hard work that you all do!

See, my thoughts are when you run into a curfewed airport on the last scheduled sector of the day, the onus then is on the poor ground crew and cabin crew who now have to try to manage turning the plane around in a less than realistic timeframe, which was what happened yesterday. That is barring all the other stuff that may happen that falls outside of their control (e.g. engineering issues that pop up, flow control).

So at the end of the day, yes the cabin crew on my flight looked tired and flustered but they still cared enough to offer us multiple top-ups of beverages, and brought us a very nicely laid out pantry tray full of snacks for us to take with us. Your management are really lucky to have staff like that and I hope they realise it before it's too late! I will definitely be dropping them a note to let them know about this ridiculous situation although I'm convinced they wouldn't care since I have no status with them.

Thank you for your kind words.
On a good day then usually there is a bit of time to spare between flights especially if it ends in a curfew chaser.

I've done plenty of MEL-PER-SYD curfew chasers and I'm astounded by how slow some passengers can be with zero sense of urgency during boarding especially if we cop a delay meaning there's no "fat" as we try to urgently get out of PER for SYD.

 

[MEL_Traveller]

Are you onboard to see any of this "lack of urgency"?
No one will be boarding until catering have catered, the aircraft has been cleaned and wheelchair passengers are off.

I've given permission for boarding multiple times before the time were supposed to and what has that archived? Nothing. More time of ours wasted and we still left on-time. Passengers are slow. I push for ground staff to follow procedures and commence offload at -10 these days.

The last thing we want to do is to be at work any longer than we have to.

Maybe thank your fellow passengers for causing a lot of mess in the aircraft with spilt chips, popcorn and rubbish which requires even more time to clean.

No one's going to be working faster than they already are. Everyone's tired. Minimum turns are 35 mins and if we're late, we're late. It's the company's problem and not ours.

35 minute turns are unrealistic. I have never experienced a turn in that time… more like an hour from the time the aircraft pulls up to the time doors close and we’re on our way.

That scheduling is not the crew’s issue, I agree.

I do agree however that passengers are slow. And it seems a VA peculiarity. Rex and Qantas don’t take as long. I don’t know why the difference.

However, I’ve lost count of the times when there is a hold up in the aisles on VA and the crew at the boarding door do a lot of tippy-toeing to see what the issue is, but never seem to act. There’s no announcement to please step out of the aisles, or please be seated, or please move around those standing in the aisles. Other airlines have those announcements. Boarding seems quicker.

Catering… don’t know why that can’t be conducted or finalised during boarding, as is common in other countries.

It’s frustrating when the gate and crew are ready to board early, we start boarding early, but there’s no announcement in the passenger terminal to announce this, other than localised at the gate. This means some pax don’t hurry and only arrive when they’re allowed to, 10 mins before scheduled departure. Sort of defeats a very early boarding call.

 

[ChrisBNE]

I do agree however that passengers are slow. And it seems a VA peculiarity. Rex and Qantas don’t take as long. I don’t know why the difference.

I’ve often wondered how the Lite fares impact operations, as they do not include checked baggage.

Leisure pax are attracted to these fares from a point, and they are incentivised to then take maximum carry on. And there is only so much room in those overhead bins.

Anecdotally, the flights with more corporate pax know what’s up. They get in and sit down with minimal fuss. They are practiced and wanna get the bus up in the air asap.

 

[dajop]

I’ve often wondered how the Lite fares impact operations, as they do not include checked baggage.

Yes, I think charging for luggage tends to push out turn times, unless, like the European lower cost carriers you also charge for wheel aboards and restrict carry on to smaller backpacks and the like.

Southwest seem to do well with turns (during normal operations) perhaps because of free checked luggage and non assigned seating.

Always a trade off.