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VX Q1 Financial Results  
User currently offlineBigGSFO From United States of America, joined Jun 2005, 2920 posts, RR: 6
Posted (5 years 2 months 2 weeks 5 days 4 hours ago) and read 3650 times:

http://news.prnewswire.com/DisplayRe...story/06-12-2009/0005042891&EDATE=

Revenue up, loss down, loads up.

23 replies: All unread, jump to last
 
User currently offlineLAXintl From United States of America, joined May 2000, 25153 posts, RR: 46
Reply 1, posted (5 years 2 months 2 weeks 5 days 1 hour ago) and read 3470 times:

Good deal  bigthumbsup 

I must say, they now have gone overboard posting these formal press releases on information that they dont even need to make public.

Anyhow they are making steady improvement which is good. Their CASM continues to drop as their cost base spreads across a larger operation and with less start up burdens being down to 9.46 cents in Q1 from about 11 cents in Q4.



From the desert to the sea, to all of Southern California
User currently offlineAtomsareenough From United States of America, joined Feb 2008, 566 posts, RR: 2
Reply 2, posted (5 years 2 months 2 weeks 5 days ago) and read 3394 times:

I know airline financial results have a high degree of seasonal variability, and I'm sure Q4 is generally a better performing quarter than Q1, but let's compare anyway:


Q4

Revenue: $109.7 million
Operating Expenses:
Operating Loss: -$27.0 million
ASMs (000): 1,181,416
Load Factor: 81.2%
Operating Margin: -24.6%
CASM: 11.57¢
RASM: 9.28¢



Q1

Revenue: $100.1 million
Operating Expenses: $132.4 million
Operating Loss: -$31.6 million
ASMs (000): 1,398,334
Load Factor: 73.1%
Operating Margin: -31.3%
CASM: 9.46¢
RASM: 7.21¢

So... They flew about 16% more miles and made about 9% less revenue. I don't know if that's typical... I would guess most airlines flew fewer miles in Q1 than Q4, but VX is still expanding and they added BOS in Q1. The operating loss went up by $4 million, which is a reversal of the downward trend they had been seeing every quarter, but I think this is a revenue issue, as the CASM went down more than 2 cents. If they have a good summer travel season, that might help on the revenue side, especially if the costs continue to come down.

All in all, seems like a mixed bag, but to me the big issue is that the cash dwindled from $68 million to $38 million, so depending on the Q2 results, how much cash do they have left, because they can't continue losing $20-30 million a quarter for much longer, unless an investor throws in more money.


User currently offlinePgtravel From United States of America, joined Oct 2005, 446 posts, RR: 2
Reply 3, posted (5 years 2 months 2 weeks 5 days ago) and read 3390 times:



Quoting LAXintl (Reply 1):
Their CASM continues to drop as their cost base spreads across a larger operation and with less start up burdens being down to 9.46 cents in Q1 from about 11 cents in Q4.

I show op expenses for Q1 of $132,351,000 over ASMs of 1,471,970,049. That's actually 8.99 cents. Am I missing something? Those are good CASM improvements, though stage length increased 8%, so we need to remember the increase isn't as good as it looks on the surface once you adjust.

Revenues on the other hand are dismal. Op revenues of $100,789,000 are well below Q4 yet there are 20% higher ASMs. That looks like a terrible 6.85 cent RASM, way below Q4's 8.97.

Biggest concern is cash. At the end of Q4 they had $68m and now they have $38m. Not good.


User currently offlinePgtravel From United States of America, joined Oct 2005, 446 posts, RR: 2
Reply 4, posted (5 years 2 months 2 weeks 5 days ago) and read 3373 times:

I pulled the ASMs and RPMs from BTS govt data. Why the difference? Is this maybe just scheduled ASMs, excluding the Direct Air stuff?

Edit: Nevermind, I checked the data myself - this does appear to be scheduled ASMs only, so can we assume that the revenues exclude Direct Air as well?

[Edited 2009-06-12 10:13:08]

User currently offlineAtomsareenough From United States of America, joined Feb 2008, 566 posts, RR: 2
Reply 5, posted (5 years 2 months 2 weeks 4 days 23 hours ago) and read 3300 times:



Quoting Pgtravel (Reply 4):
Why the difference? Is this maybe just scheduled ASMs, excluding the Direct Air stuff?

That seems like a reasonable explanation.


User currently offlineLuv08 From United States of America, joined May 2009, 128 posts, RR: 0
Reply 6, posted (5 years 2 months 2 weeks 4 days 22 hours ago) and read 3203 times:

Don't worry about VX only having 38 million in the bank! I am sure Sir Richard will just Western Union some money right over like usual.... Wait a minute the govermnent already figured that one out! On a serious not it doesn't look good at all for them. I wish them the best.....

User currently offlineEA CO AS From United States of America, joined Nov 2001, 13554 posts, RR: 62
Reply 7, posted (5 years 2 months 2 weeks 4 days 16 hours ago) and read 3010 times:
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RASM of 7.2 cents isn't going to cut it - especially now that fuel is up over $70.00/bbl and climbing.


"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineSANFan From United States of America, joined Aug 2006, 5411 posts, RR: 12
Reply 8, posted (5 years 2 months 2 weeks 4 days 14 hours ago) and read 2947 times:



Quote:
Virgin America is one of the fastest growing U.S. carriers of all time

Does anyone else on board do a double take every time Mr Cush allows this statement to be printed in his press releases?

For a carrier that has been flying since August of 2007 (that's about 22 months now) to be serving a whole NINE cities with a whopping 13 different routes sounds to me more like trying to keep up with the turtles. "One of the fastest growing U.S. cx of all time"? Come on!

Let's see, over all, that's averaging about 1 new route every 2 months. And, considering they essentially started with 3 cities -- SF, LA, NY -- they've added 6 new cities since, or a new city about every 4 months (but since Oct 07 they've added only 4 new cities at the blistering rate of 1 every 5 months.)

Just for comparison, here are some numbers on the other 2 most recent new U.S. carriers. SkyBus (SX), which of course only lasted 10 months, at its peak, served about 16 cities over about 26 different routes. And Express Jet (XE), which lasted 17 months from 4/07 thru 8/08, served about 24 cities at its peak, on about 60 routes! (I do realize the definition/interpretation of the whole XE thing is subject to debate.) I don't have enough info or knowledge of Indi Air's short-lived existence or I would include it as well.

I imagine Virgin is building some assumptions into the statement. Maybe it's: "One of the fastest growing (EXISTING) U.S. cx..." Perhaps they feel safe since the statement says "ONE of".

In any case, I raise and wave the "BS" flag Mr Cush!  redflag 

bb


User currently offlineEnilria From Canada, joined Feb 2008, 7138 posts, RR: 13
Reply 9, posted (5 years 2 months 2 weeks 4 days 13 hours ago) and read 2879 times:

Notice the cask fell like a rock. Further proof that their cost reporting has been a smokescreen.

I think they will survive. How much are they losing on the Direct air deal? It ends soon.


User currently offlineAtomsareenough From United States of America, joined Feb 2008, 566 posts, RR: 2
Reply 10, posted (5 years 2 months 2 weeks 4 days 11 hours ago) and read 2800 times:



Quoting EA CO AS (Reply 7):
RASM of 7.2 cents isn't going to cut it - especially now that fuel is up over $70.00/bbl and climbing.

Fuel wasn't that high in Q1. I'd imagine their revenues will increase in summer.

Quoting Enilria (Reply 9):

I think they will survive. How much are they losing on the Direct air deal? It ends soon.

What are your indications that they're losing money on Direct Air?


User currently offlineIkramerica From United States of America, joined May 2005, 21511 posts, RR: 60
Reply 11, posted (5 years 2 months 2 weeks 4 days 11 hours ago) and read 2798 times:



Quoting Luv08 (Reply 6):
On a serious not it doesn't look good at all for them.



Quoting LAXintl (Reply 1):
Anyhow they are making steady improvement which is good.

Two ways of looking at it...



Of all the things to worry about... the Wookie has no pants.
User currently offlineEnilria From Canada, joined Feb 2008, 7138 posts, RR: 13
Reply 12, posted (5 years 2 months 2 weeks 4 days 7 hours ago) and read 2699 times:



Quoting Atomsareenough (Reply 10):

What are your indications that they're losing money on Direct Air?

I don't have a quote, but I believe it is well established they did that deal out of desperation. If it were profitable VX wouldn't be ending it.


User currently offlineBestWestern From Hong Kong, joined Sep 2000, 7123 posts, RR: 57
Reply 13, posted (5 years 2 months 2 weeks 4 days 6 hours ago) and read 2668 times:

Biggest issue is their revenues - with an operating margin of -31% in Q1 - all focus needs to be on increasing average fares, and protecting their load factors. Their Break Even load factor in Q1 was 96%.


The world is really getting smaller these days
User currently offlineEA CO AS From United States of America, joined Nov 2001, 13554 posts, RR: 62
Reply 14, posted (5 years 2 months 2 weeks 4 days 5 hours ago) and read 2637 times:
Support Airliners.net - become a First Class Member!



Quoting Atomsareenough (Reply 10):
Quoting EA CO AS (Reply 7):
RASM of 7.2 cents isn't going to cut it - especially now that fuel is up over $70.00/bbl and climbing.

Fuel wasn't that high in Q1. I'd imagine their revenues will increase in summer.

You're right, hence why I said "now that fuel is up over $70.00/bbl" - meaning it only gets worse for them from here.

Low yields, slack demand, high fuel - you get the idea. Their losses will get worse, not better.



"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
User currently offlineLrdc9 From United States of America, joined Sep 2007, 610 posts, RR: 0
Reply 15, posted (5 years 2 months 2 weeks 3 days 16 hours ago) and read 2458 times:

What is the "Direct Air" agreement please?

I think they will make it, IMHO. They seems to be strengthening . . .



Just say NO to scabs.
User currently offlineLive2fly83 From United States of America, joined Apr 2008, 151 posts, RR: 0
Reply 16, posted (5 years 2 months 2 weeks 3 days 13 hours ago) and read 2357 times:



Quoting BigGSFO (Thread starter):
Revenue up, loss down, loads up.

wha? how so? r u drinking the red koolaid?



"come fly with me"
User currently offlineLive2fly83 From United States of America, joined Apr 2008, 151 posts, RR: 0
Reply 17, posted (5 years 2 months 2 weeks 3 days 13 hours ago) and read 2345 times:



Quoting BigGSFO (Thread starter):
In any case, I raise and wave the "BS" flag Mr Cush!

most CEOs are politicians in my mind- he throws alot of propoganda around
lets just hope the VX number crunchers arent drinking his koolaid



"come fly with me"
User currently offlineLive2fly83 From United States of America, joined Apr 2008, 151 posts, RR: 0
Reply 18, posted (5 years 2 months 2 weeks 3 days 13 hours ago) and read 2336 times:

so whats their total loss for their 22month existence so far? I beleived its surpassed 300m by a good bit by now right?


"come fly with me"
User currently offlineEnilria From Canada, joined Feb 2008, 7138 posts, RR: 13
Reply 19, posted (5 years 2 months 2 weeks 3 days 12 hours ago) and read 2301 times:



Quoting Lrdc9 (Reply 15):
What is the "Direct Air" agreement please?

I think they will make it, IMHO. They seems to be strengthening . . .

I agree with you.

Direct Air is a scheduled charter company like Jet America that flies to/from Myrtle Beach and such. They may be associated with Myrtle Beach Express, but I'm not that educated about these second tier companies.

Anyway, like Jet America, Direct Air has no operating certificate so they have to wet-lease airplanes from "real" airlines. When VX's deliveries were piling up and they were still not approved to fly they were desperately trying to find some way to make some kind of money. I'm not sure if it pre-dated their own branded service, but around that same time they put 2 or 3 aircraft under a wet-lease with Direct Air to get them flying.


User currently offlineBigGSFO From United States of America, joined Jun 2005, 2920 posts, RR: 6
Reply 20, posted (5 years 2 months 2 weeks 3 days 9 hours ago) and read 2213 times:



Quoting Live2fly83 (Reply 16):
wha? how so? r u drinking the red koolaid?

Did you read the press release? Revenue is up, losses are down, loads are higher. Not koolaid - just relaying what was spelled out in the press release.


User currently offlineLGA777 From United States of America, joined Jul 2003, 1149 posts, RR: 19
Reply 21, posted (5 years 2 months 2 weeks 2 days 19 hours ago) and read 2059 times:

With LF's of 85 pct in April and 84 pct in May even with the increases in fuel prices I would think that will have a big effect on VA's Q2's financial performance.

I took my first two flights on VA in Feb JFK-LAS-JFK, and had two GREAT flights, very impressed with their product. They offer a lot of products for an extra fee, but in way you don't feel nickel and dimed. This ancilary revenue is bound to help their bottom line and the higher the load factor, the more people buying movies, food, cocktails. etc.

Regards

LGA777


User currently offlineMarcoPoloWorld From United States of America, joined Mar 2008, 639 posts, RR: 0
Reply 22, posted (5 years 2 months 2 weeks 2 days 14 hours ago) and read 1955 times:



Quoting Luv08 (Reply 6):
Don't worry about VX only having 38 million in the bank! I am sure Sir Richard will just Western Union some money right over like usual.... ...

And Western Union is a US-owned corporation, so all-in-all, it's more business here either way you look at it! And with the exorbitant fees that WU charges, a $200M transfer should yield about $28M in fees for WU.... not bad!  Big grin


User currently offlineManhattanbeach From , joined Dec 1969, posts, RR:
Reply 23, posted (5 years 2 months 2 weeks 2 days 10 hours ago) and read 1832 times:



Quoting BigGSFO (Reply 20):
Did you read the press release? Revenue is up, losses are down, loads are higher. Not koolaid - just relaying what was spelled out in the press release.

It looks like a great airline but I guess you Americans aren't used to Virgin brand hyperbole.

Who knows ? There's always a certain amount of 'reading between the lines' but as long as the right kind of publicity is attracted.....


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