Virgin Blue signals losses up to $80m

[Nigelinoz]

Virgin Blue signals losses up to $80m on natural disasters, fuel price spike | News.com.au

VIRGIN Blue shares have taken a big hit after the airline said high fuel prices, adverse weather and natural disasters would result in a before tax loss of up to $80 million for 2010/11. The airline group, comprising Virgin Blue, Polynesian Blue, Pacific Blue and V Australia, said it expected to post a full year before tax loss in a range between $30 million to $80 million.

"This assumes no further significant increase in fuel prices and no material deterioration in the trading environment," Virgin Blue said.

The guidance excluded hedging ineffectiveness, Virgin Blue said.

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[pauly7]

Hope this doesn't impact their relaunch....

 

[Sprucegoose]

Surely that can't be coming from their mainstream OZ operations.

Their V Australia ops did drag the chain a bit.

 

[Nigelinoz]

Hope this doesn't impact their relaunch....

Agreed,hopefully though they have made provision for the relaunch costs in the budget for this year.
Cheers
N'oz

 

[Timba-Jet]

It would be interesting to see how much V Australia operations contributed to the losses, and/or if there one-off start up expenses incurred with the re-launch that will not carry into next year.

Is there underlying result still sound.
Has DJ gained Dom market share from QF?

 

[odysseus]

It would be interesting to see how much V Australia operations contributed to the losses, and/or if there one-off start up expenses incurred with the re-launch that will not carry into next year.

Is there underlying result still sound.
Has DJ gained Dom market share from QF?

It doesn't appear that V Australia has negatively impacted the latest result, aside from the general fuel impact, but domestic operations have the greater share of that.

The issues in this are a mix of one-off and ongoing issues. Fuel is ongoing, which they hope to mitigate but they say it is only partially offset by surcharges. Obviously there are points where you keep increasing your surcharge and people stop flying.

The one-off issues are specific, but still have $65 m impact which is a very high figure in the context... and this is a flow on from previous one-offs.

Personally, I'm surprised the share price is as good as it is - but then I said that last time it was hit by their revision (and now it's back where it was then, after bumping up temporarily).

 

[pauly7]

Has DJ gained Dom market share from QF?

Nope - and weren't expected to given they haven't changed donut yet

They need to get away from being/being perceived as a budget LCC ASAP, with rising fuel prices QF is in a much better position to rise prices than DJ with their much stronger position with business.