Virgin Blue paying cash for their fuel?

[flying1977]

A friend of mine who works at Brisbane airport advised that Virgin Blue are having to pay cash by fuel. This is not good news if they are.

Can anyone confirm?

 

[ANstar]

I seriously doubt it.

They had $550M in the bank when they reported a month ago. I can't see how that could disappear overnight.

Seems more like someone scaremongering or telling porkies! Does your friend happen to work at Qantas lol! I only ask as all your posts are Anti Virgin and pro QF!

also, only 2 weeks ago they were asked by the ASX if there was anything that could be affecting hteir share price and Virgin's reply was that their full year guidance is still within 15% of what they gave last November....

http://asx.com.au/asxpdf/20090313/pdf/31gkmhr2rkhs64.pdf

And I'm usre they wouldn't be lying to the ASX.

 

[simongr]

The fact that they are forecasting a stable profit does not mean that they have any cash - they may have balloon payments due on leases, debt facilities could have been renegotiated downwards and a host of other things.

However I think the story of paying cash for fuel is a fabrication. The only circumstances I can see this happening is where DJ have a disagreement with the fuel provider and have stopped paying bills thus requiring cash payment - however that is still highly unlikely... how much is a tank of gas on a 737?

 

[munitalP]

Airside fuel bowsers - "please pay at the conter before filling up your 737 thank you"





Mr!

 

[MrGreg]

how much is a tank of gas on a 737?

If my calculations are correct, the cost to fill a boeing 737-800 from empty would cost roughly $19,000 based on jet fuel prices from early march.

 

[simongr]

And how much fuel would use transporting the day's cash for 4-8 flights... I smell something a little fishy...

 

[markis10]

I think QF would be paying cash for fuel before DJ, the bigger you are the more you find it harder to trim costs, Virgins source of aircraft financing has not gone into liquidation like Qantas's main one has, and I have not seen any cash changing hands with the refuellers on the apron this morning in melbourne.

 

[munitalP]

It could be true!!

yep, it could be tue....

 

[simongr]

Bit of time on your hands MrP?

 

[munitalP]

End of month...

Spreadsheets, accounting package and boredom...

and Sir Richard looks so genuine as well eh?




Mr!

 

[Nigelinoz]

Very clever Mr P, you could have a new career with Boeing but you would need to get rid of those 9 seats in the nose unless you want people sitting on the co-pilots lap.:mrgreen:.

 

[Keith009]

I don't buy it.

Virgin Blue might have had a hard few months but I'd think their financial situation is sufficiently stable to allow them to get fueled via credit lines.

They'd have to be in a near-bankrupt state, ala the final days of Swissair, to be paying cash for fuel.

 

[jakeseven7]

i think this may be just a joke!?

 

[chrisb]

Maybe they're putting it all on the Amex to get extra QF points before the 31st

 

[medhead]

I don't see how paying cash for fuel would:

a) save money - its the same fuel for the same cost
b) indicate that there is a problem with virgin - if they are have cash flow problems then they don't actually have the cash to pay for the fuel. I would assume that a company in the final death throes would betrying to use credit to overcome any cash flow problems.

Maybe the fuel company has refused to extend credit to virgin, but that's highly unlikely and it would cost them a lot more in paying console operators to collect the cash at each airport.

 

[NM]

Clarification of relationship

In the interest of full disclosure, I think it is important to note the following:

The original poster of this thread, flying1977, regularly posts to this forum from an IP address that appears to come from Qantas. The opening post in this thread appears to have initiated from an IP address at Qantas.

flying1977 has been asked to clarify any relationship with Qantas in order for their posts to be understood in context. No clarification has been received.

I invite flying1977 to identify any relationship with Qantas and to provide clarification regarding the source of the rumour posted in this thread. This same invitation was provided privately earlier in the day.

 

[simongr]

I don't see how paying cash for fuel would:

a) save money - its the same fuel for the same cost
b) indicate that there is a problem with virgin - if they are have cash flow problems then they don't actually have the cash to pay for the fuel. I would assume that a company in the final death throes would betrying to use credit to overcome any cash flow problems.

Maybe the fuel company has refused to extend credit to virgin, but that's highly unlikely and it would cost them a lot more in paying console operators to collect the cash at each airport.

AS I pointed out above in some circumstances if you are having credit problems you might be forced to pay cash or COD.

 

[medhead]

AS I pointed out above in some circumstances if you are having credit problems you might be forced to pay cash or COD.

Yeah, that's right but only if your have issues with the creditor and they are insisting on cash payments. What I didn't express very well was that a company in finanical trouble (not just credit problems with one supplier) is highly unlikely to have the cash on an ongoing basis to actually make the cash payments.

If DJ are sustainably paying cash for fuel that tells me they have heaps of cash flow, not that they are about to go bust.

 

[stryker]

Re: Clarification of relationship

I invite flying1977 to identify any relationship with Qantas and to provide clarification regarding the source of the rumour posted in this thread. This same invitation was provided privately earlier in the day.

Is there nothing Qantas won't stoop to?

Obviously gouging Australians isn't enough.

 

[ANstar]

Re: Clarification of relationship

Is there nothing Qantas won't stoop to?

Obviously gouging Australians isn't enough.

Perhaps an attempt to scare consumers before the 31st march points no choice deadline.