Stormy clouds?

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Were they? From memory, they were turning over significant losses. (mind you, my memory is not always accurate).
Virgin Blue's only loss other than it's startup year was FY09 (aka the GFC which coincided with the launch of V Australia). Borghetti has made a loss every single year - except the year that Qantas was grounded.

Here is the scorecard (you can verify easily if you are willing to trawl through the annual reports):
In 10 years from a standing start Godfrey accummulated $1.036b of profit (EBIT statutory measure, not "underlying") counting 2010 as Godfrey since he finished up in May.
In 6 years Borghetti has accumulated losses of $1.291b (same measure - statutory EBIT). At the same time he has tripled the invested capital and trashed the balance sheet.

So, no, your memory is not accurate on this occasion sorry. Seems the Virgin Board has the same problem. Christopher Luxon was the only one smart enough to see what was going on and call it as he saw it and vote with his feet.
 
Yes lots of speculation here as others have commented on - but its interesting to ponder on the source material and if VA do or does not have any internal leaks. Interesting comments about how with fuel hedging and fixed cost leases that VA really only have the yield lever to pull or push vs QF whom seem to have more capacity options (larger network, more frequency and resorting to JQ or use of Qantaslink B717s etc). Most people seem to agree that the VA regional ATR decision was a bad one and the jury still seems to be out on the TT acquisition. One thing that wasn't touched on much was that VA are kidding themselves if they think that HNA will be the knight in shining armour as many Australian companies have found out that deals with Chinese enentities aren't worth the paper they're written on in a lot of cases. The analysis seems to be the quarter had higher revenue per passenger (not surprising seeing as a lot of AFFers have commented on generally rising airfares from all airlines) but less sectors flown, this must mean more aircraft on the ground not doing anything, with the rising airfares possibly growing both JQ and TT. It doesn't matter how good your yields are on those SYD-MEL-BNE triangle services if you have a dozen of so aircraft still sitting on the ground, then those yields will be eaten up by fixed aircraft lease costs. Despite all the "good news" from Qantas & Jetstar I wouldn't say that they are completely out of the woods yet either.

Some poor fleet timing decisions will continue to hamper VA and also QF for a few more years, given that everyone (including the airlines) were pissing and moaning about the high AUD we saw from 2011-2015 I find it curious that they weren't buying aircraft then while the exchange rates were in their favour. Its like the world gave them lemons and they tried to make orange juice. We are in a world of low interest rates now as well so I don't see the logic in doing all the hard work to make aircraft leasing companies rich, I thought the idea was to make money for your shareholders? :rolleyes:
 
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Virgin Blue's only loss other than it's startup year was FY09 (aka the GFC which coincided with the launch of V Australia). Borghetti has made a loss every single year - except the year that Qantas was grounded.

Here is the scorecard (you can verify easily if you are willing to trawl through the annual reports):
In 10 years from a standing start Godfrey accummulated $1.036b of profit (EBIT statutory measure, not "underlying") counting 2010 as Godfrey since he finished up in May.
In 6 years Borghetti has accumulated losses of $1.291b (same measure - statutory EBIT). At the same time he has tripled the invested capital and trashed the balance sheet.

So, no, your memory is not accurate on this occasion sorry. Seems the Virgin Board has the same problem. Christopher Luxon was the only one smart enough to see what was going on and call it as he saw it and vote with his feet.
Hey crazydave98, haven't heard from you in some time. Thanks for the clarification, as I said I wasn't sure but I was under the impression that losses were the reason for the game change! Makes one wonder why they bothered. Many of us (me included) have stated many times we would prefer the old DJ model of being a bit better than JQ but still a budget airline (just without the giggling Gerties in the aisle).
 
Most people seem to agree that the VA regional ATR decision was a bad one

Who is "most"?

Certainly lots of destinations so affected were glad VA came along to provide some competition against QF(link).

Certainly many seemed to prefer the ATRs over the Q400s!

I wonder if VA could milk those towns or businesses based there more for concessions in order to continue service there (though IIRC many of those destinations are regulated routes by the governments).

and the jury still seems to be out on the TT acquisition.

This I couldn't quite understand. I thought that was taking way too big a risk, and to what anticipated benefit?


Ponder point - VA still most likely holds an unshakeable grip on the OOL markets (viz. to SYD and MEL). I believe one of the qualities that JB went on about in the early days was servicing markets which QF did not or very poorly (e.g. only JQ services). I wonder if this market is still a big gem (or crutch) in the VA portfolio.
 
Branson ... I suspect he wouldn't be so desperate to save face that he would intervene at all.
Realistically, SRB has no face to save, when it comes to running airlines - Virgin Express = dead, Virgin Nigeria = dead, Virgin America = dead soon (absorbed into Alaska Airlines), Virgin Atlantic = now run more like a subsidiary of Delta Airlines, with strategy dictated in Atlanta. One thing that is true to form though, is that airlines which SRB sets up, generally don't last too long on their own feet/wings for one reason or another.
 
Realistically, SRB has no face to save, when it comes to running airlines - Virgin Express = dead, Virgin Nigeria = dead, Virgin America = dead soon (absorbed into Alaska Airlines), Virgin Atlantic = now run more like a subsidiary of Delta Airlines, with strategy dictated in Atlanta. One thing that is true to form though, is that airlines which SRB sets up, generally don't last too long on their own feet/wings for one reason or another.

One could argue that SRB's airlines try to do what he thinks everyone wants in an airline that makes it hip, funky, fresh and generally a hark back to the times when flying was an enjoyable and romantic venture. Instead of airlines cast out of the same grey mould, they pushed boundaries, something which SRB himself is not adverse to in his manifesto (in his other businesses, etc.)

Certainly, JB launched into his Virgin Australia ambition with references to the same ideas: Qantas is old, stodgy and not agile; we are going to show you what flying was and should be like (I'm sure the word "romance" was in there somewhere). This, from a man who knew inside (or at least had some insight into) the Qantas machine, who seemed to be one of the best people to exploit its weaknesses.

However, such ventures are unprofitable in the main; a twisted irony when you think that it has what people want (or wanted) in an airline.
 
Too add my 2 cents in to the issues.
They spent all this money on upgrading business class and recently JB declared they would have a modest increase in the cost for a business class seat. I've just done a dummy booking for a flight I booked a year ago in business going to LAX (at that time they were still selling the old seat) the fare is actually $600 LOWER for the same dates next year. (Yes, I get the whole competition elements)

Historically, I think DJ did well as a domestic airline and once they started to go international and with JetStar setup, they always seemed on the back-foot ... Always should have done things a year or two earlier.

Whilst I dont see them going bust, I dont think JB will be around in a year's time.

(Whist I'm on a rant too) The worst thing they ever, ever did as a frequent traveller was pull out Live2Air, it's friggin frustrating with the same entertainment all the time and then you go on a long haul flight and it's still the same.
 
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The VA article has been removed from the Australinea website (which coincidentally shows as down and as a non-sercure site) and the AFR has confirmed that attempts to contact the author were unsuccessful as the phone number and address linked to the website were found to be fake:

Virgin Australia boss John Borghetti's results-day hoax headache | afr.com

Doesn't surprise me, the content was littered with errors...
 
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Australinea.com domain registered 18-Jul-2016 with GoDaddy but registration details hidden using paid forwarder (GoDaddy's DomainsbyProxy)
 
It's hard to know if they were wrong, or that their report gave an accurate description of what the situation was at the time. We don't know what was going on behind the scenes with commercial negotiations to get to where we are now.

It is interesting that Australinea seems to have popped up out of nowhere, with access to internal status reports....
Seems that much, especially in the second article was incorrect.

Indeed, the protagonists appear to have gone to ground.

Virgin Australia boss John Borghetti slams analyst’s cashflow ‘crisis’ hoax
 
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