Virgin Australia's half-year profit soars

[Milefest]

Virgin Australia's half-year profit soars as domestic fares rise

Virgin Australia has posted an eight-fold rise in underlying profit before tax in the first half to $81.5 million, as a result of ongoing fare increases in the domestic market and better conditions in the international market.

 

[Jousams]

'Soars' is a bit of an exaggeration...

 

[JohnK]

Why wouldn't profit soar?

Australia has some of the most expensive airfares in the world where 2 or more carriers operate a route. Competition? Hahaha. More like collusion. How do they continue to get away with it?

 

[Fiches Mouser]

Why wouldn't profit soar?

Australia has some of the most expensive airfares in the world where 2 or more carriers operate a route. Competition? Hahaha. More like collusion. How do they continue to get away with it?

Fares seemed to have risen by at least 25% across the board over there past year, and the product hasn't changed. Based on the rapid price increase alone it's no surprise...

 

[anat0l]

Australia has some of the most expensive airfares in the world where 2 or more carriers operate a route. Competition? Hahaha. More like collusion. How do they continue to get away with it?

Deregulation and capitalism.


Good to see Virgin on the up; at least this guarantees an active competition at least in the domestic market.

 

[Milefest]

Fares seemed to have risen by at least 25% across the board over there past year, and the product hasn't changed. Based on the rapid price increase alone it's no surprise...

Yep they have. I've noticed that happy hour has been better than it was mid last year though. I remember them having pretty average deals for dates 6+ months out.

 

[JohnK]

Good to see Virgin on the up; at least this guarantees an active competition at least in the domestic market.

Competition? In my view $145 and $155 SYD-BNE and vv is not competition.

 

[Fiches Mouser]

Competition? In my view $145 and $155 SYD-BNE and vv is not competition.

Agree. Very poor.

I wouldn't mind paying these prices but the service just isn't there to justify it. Give me damn meal. Give me a glass of wine at lunchtime. Seriously.

 

[anat0l]

Competition? In my view $145 and $155 SYD-BNE and vv is not competition.

Consider if VA disappeared, leaving QF once again as the sole major player in the domestic market (let's discard JQ and TT for a second). Would you be feeling any more optimistic about the price and its outlook?


No idea how the sticker prices went up so much. I haven't seen anything like this since just before the 2008 financial crisis, and they didn't even get this high, accounting for inflation. But I guess those who will want to go, will pay, and everyone else just has to please themselves some other way. If the airlines' sales dropped off so much due to the high price being such a large disincentive to purchase, resulting in a large capacity drop, they'd be foolish not to lower the fares. So we'll see.


Prices won't really drop if the market doesn't "force" them to do so. Government regulation to specify a price for each sector is a folly effort.

 

[JohnK]

Consider if VA disappeared, leaving QF once again as the sole major player in the domestic market (let's discard JQ and TT for a second). Would you be feeling any more optimistic about the price and its outlook?

I'd be travelling a lot less which is what has happened anyway. I have struggled with Qantas Platinum for the past 2 years. Think this year will get to 1200 SCs exactly a few days before requalification end May. I have struggled maintaining Virgin Gold and need some creative SQ routing to get over the line.

When I first starting commuting SYD-BNE in 2008 I think the Qantas airfare touched $128 for a few months. In 2010/2011 the airfare was down to ~$85 and has been creeping up since. Oil is mucher cheaper now and the uncertainty that was there in 2008 is not there now.

The difference between Qantas and Virgin was ~$15-$20. It is now $4-$10.

Last year and this year is the firsr time in 8-9 years that I have seen Qantas business class not full. On most flights I am on a Friday night BNE-SYD economy is not full. Spare seats in business. Sunday SYD-BNE not much better but the 6:05pm flight does well.

I have never had this many vacant seats next to me in the 8 years I have been commuting.

Now looking for airfares in June/July and neither airline is discounting. Don't know what I'll do as I need some flights but not paying $155 each way for 3-4 weeks. Not looking forward to JQ or TT as their schedules are poor. SYD-OOL has also crept up to ~$99 each way. Maybe that is what I will do.

 

[Melburnian1]

These are all valid points but interestingly Mr Borghetti keeps publicly suggesting that the leisure market (within Australia) is 'weak' while VA's international division continues to be a loss-making failure.

Perhaps for domestic travel if the fares became cheaper demand might be somewhat stimulated.

 

[anat0l]

Does accounting for the international operation include any revenue co-garnered by relevant codeshare partners?