Is John Borghetti doing a good job?

[Anna]

I'm starting this thread in the interests of balance.

With all the AJ bashing going on in another thread, I don't think it should slip under the radar that JB also delivered terrible financial results. And he only runs a comparatively tiny operation with all the financial backing his heart could desire.

Discuss. Don't show your working. This is the internet

 

[markis10]

He didn't deliver terrible results if you read them! As I posted elsewhere, summed up nicely by Aus Aviation:

How both airline groups have reacted to these losses really tells the story. Qantas is slashing jobs, selling off assets and cutting its fleet growth. Virgin, meanwhile, seems intent on maintaining a steady cruising altitude, flagging no major changes to its operations.

That is because for Qantas the biggest challenge is managing decline in its international for business, whereas Virgin’s challenge is managing growth. Virgin’s restructuring costs will fall away and as it continues to grow, scale will drive down its unit costs. For Qantas international the problem is almost exactly the opposite.


No wonder Borghetti could afford to smile when Joyce could only grimace.

http://australianaviation.com.au/20...bservations-on-the-qantas-and-virgin-results/


Making the right investments is a lot harder than slashing and burning, something any accountant can do.

 

[carwashhair]

I think so. I think the losses chalked up by both QF and VA thru increasing domestic capacity are part of a long term game, and also not unrelated to international alliance/partner traffic.
Joyce's position is unenviable, while Borghetti is taking the fight to Qantas using what he learned of their weaknesses against them. And while it's not a completely level playing field (imo), Borghetti's plans feel progressive or expansionary. It's been a long time since you could say the same of QF.

 

[Mogul]

JB has a plan on where VA are going and he is sticking to it. Once the "game change" program is completed and lot of the related one off cost's are behind them I think you will see a completely different set of financial results.

JB doesn't seem to be rattled by some speed bumps along the way and is clearly focussed on where VA will be in a few years. Yes he does have large financial backers (SQ, Air NZ, etc.) but he can't pull the wool over theirs eye's as they are all profitable airlines and they obviously agree with the direction he is taking VA.

 

[greenfish]

A voice of dissent here. The Skywest and Tiger acquisitions were ill-timed and probably ill-advised. The Sabre implementation was botched. The loss including the business transformation losses are proportionately much worse than QF. My opinion is that next year's results will be terrible too, as the true extent of the downturn in mining investment impacts both VA and QF.

The saving grace for JB is having guaranteed foreign government support.

 

[UP4014]

Virgins results haven't been good for a while, while the losses are smaller so is the airline.



Matt

 

[RooFlyer]

A voice of dissent here. The Skywest and Tiger acquisitions were ill-timed and probably ill-advised. The Sabre implementation was botched. The loss including the business transformation losses are proportionately much worse than QF. My opinion is that next year's results will be terrible too, as the true extent of the downturn in mining investment impacts both VA and QF.

The saving grace for JB is having guaranteed foreign government support.

Couldn't agree more. The in-air product is good, but the on-ground support has been appalling. (new lounges acknowledged). Yes, the Sabre roll-out was appalling and the web site - where the majority of their business is transacted, I would think - has been nothing short of disgraceful.

BTW - did we EVER get an acknowledgement of these issues from the airline?

 

[Jousams]

The tiger acquisition was unlikely a 'choice' for virgin. It was probably more akin to 'if you want help from us (SIA), you take tiger'.

 

[under the radar]

gotta love the Richard B retweet by VA proudly displayed on VAs twit page...RB wholeheartedly supports an increase to his bank balance.. mixed in with ANOTHER photo op to feed his ego.. this guy makes me throw up a little in my mouth whenever/wherever he appears

 

[ledj]

IMO JB is doing a great job. I've never had the service from qantas I get from Virgin Australia either in the air or on the ground. Ive never had the perks from qantas I get from VA.
I haven't flown qantas since the first day of Virginblue.
Well done, keep up the good work.

 

[Mwenenzi]

I haven't flown qantas since the first day of Virginblue..

So you have no basis of making a comparison. A lot has happened to Australian aviation in ~13.5 years
Virgin Australia History | Virgin Australia

2000

• Virgin Blue’s first flight was DJ214 from Brisbane to Sydney on 31 August 2000.
• The airline had one route, two aircraft, and a dedicated team of just 200 people.

 

[samh004]

To me, I think he's doing an okay job considering he's winning corporate accounts and transforming the business, however he's not doing much for shareholders right now. Ultimately, he's a pawn of 3 other players who have another agenda. Whether he realises that and is fine with it or not, who knows.

 

[gwilli1]

yes , i agree . As for the pawn , if my perception of JB is correct , I think he knows where exactly where he stands in the pecking order and will play it to his/VA advantage as long as he can .

It was always going to be a win /win situation in a losing environment for JB when he took the reigns of VA . He had so much more to gain in moving VA up the Australian aviation ladder then AJ did with QF trying to contain costs of a legacy airline. JB & VA have had a vision and have generally stuck to it , albeit with a few bumps , but there doesn't seem to be any "panic" that seems to have set in at QF . I personally believe , that JB is a more astute CEO than AJ will ever be and I believe also that we would have seen a different QF , if JB had got the job as QF CEO .

In saying that , VA still have some problems that need addressing. Their website , including seamless integration with Velocity , gaps in the "International" network , and consistency of their onboard service across the network , just to name a few.

To me, I think he's doing an okay job considering he's winning corporate accounts and transforming the business, however he's not doing much for shareholders right now. Ultimately, he's a pawn of 3 other players who have another agenda. Whether he realises that and is fine with it or not, who knows.

 

[Standby]

A plus and minus view
I think JB has done a sterling job adding bells and whistles to VAs product and service offering, improving it, but with significant cost increases (ongoing +~4% this year plus transformation costs) showing little by way of profitable return when comparing Mainline VA to Mainline QF.
The increased cost for adding food and beverage across much of network, isn't included in 1st half as roll out is outside the reporting period . The cost of providing even a muffin plus drink will add $2-3 per passenger. If they couldn't recoup a $2.50 carbon tax per sector what chance have they of covering food? That has to add another $10-20M in costs annualised in FY15 just on the markets that weren't getting the "full service" offering ie all the high volume frequency /passenger markets like the Triangle+ ,ADL alone.
If at VAs half yearly announcement their the share resister was like for like with QF(ieNot lop sided) I wonder if
shareholders, staff and experts would be baying for the CEOs head in response to the result that has
1.A "Transformed" business making a loss, with no guidance when it will be profitable
2.An LCC (Tiger)weighing around their neck & yet to to wreak the havoc on their network as JQ does to QF .Remember TT has a significant Growth number of planes on order.
3.Share price languishing with their profit (currently only held up only by the 80% friendly investors with deep forgiving pockets)
4. No dividend again How many years now? (QF playng catch-up here)
5.Adding unprofitable capacity into the market (well unprofitable this year)

Many say VA is a Mini me Qantas , there appears lots going wrong at both businesses just different by degree.
The same way Joyce is trying to reduce the cost gap by freezing wages I'm sure many VA staffers and crew are wondering why they get paid a lot less than QF, especially now with similar products.
This will make the next round of EBA discussions tougher for JB to deal with and further cost increases. Last years tech crew EBA wasn't smooth and it wont get easier.

So JB actually has a fair bit in common with AJ at the moment, yet only 1 is under significant scrutiny(quiet rightly though as I feel Joyce & Clifford have made a number of blunders).
Like Joyce, how much time should JB get to deliver before being held accountable. From a financial perspective both have under delivered from a shareholder perspective.

 

[civinod]

IMO JB is doing a great job. I've never had the service from qantas I get from Virgin Australia either in the air or on the ground. Ive never had the perks from qantas I get from VA.
I haven't flown qantas since the first day of Virginblue.
Well done, keep up the good work.

Don't mean to be rude but what are all these great advantages that you get from VA.

Personally I am not big on hotdogs!!

 

[Deleted member 29185]

JB had one good year......then blunder after blunder. VA should be a lot better received than they currently are. Tough business all round though.

 

[Mogul]

Was reading today that VA domestic made 25 mil in profit. International, Tiger, restructuring, etc. was where the loss came from.

 

[Jousams]

Was reading today that VA domestic made 25 mil in profit. International, Tiger, restructuring, etc. was where the loss came from.

Yes. Financials were quite interesting.

I wonder what international routes have gone to ****?

Not long ago, VSamoa was a great business, it also lost 1 mill in the half.

EDIT. Just realised it's probably highly seasonal lol

 

[grubbidok]

Even if you don't think much of JB, I bet there are a lot of QF shareholders out there wishing he'd been given the QF gig instead of Joyce.

 

[QF WP]

I think John Borghetti is going a great job, based on the fact that's he doesn't have the same legacy issues as QF. As I said to them on Friday when answering a survey for my recent ADL/BNE flight:

VA have my vote for Customer Service (phone and in-person including ), crew and Priority Boarding, Family Pooling and fleet, meals on board.

QF have my vote for FF program (benefits and partners plus ASA's), Website and Lounges (particularly F&B).

if John B gets it right now, the we'll see some real differences.

Surprising given that until 3 years ago, I was a complete QF fan. However having achieved Gold and then Plat for the past 2 years on VA, I'm now happy to maintain Gold on QF. Quite the reverse, who'd have thought