LAXintl From United States, joined May 2000, 12054 posts, RR: 22 Posted (4 months 1 week 18 hours ago) and read 6195 times:
Good deal.
Hopefully this helps clarify the ownership debate, and surely the potential added $150mil will go some ways to keep VX funded and growing providing its excellent product.
Quote: Virgin America, the carrier founded by Sir Richard Branson, is seeking US approval for a new slate of domestic investors it expects will end a rival's bid to challenge the company's ownership structure.
Under the plan submitted to the Department of Transportation, the airline would receive new capital from a group of investors that includes Cyrus Capital Partners, people familiar with the matter said. Cyrus, a New York hedge fund, was one of Virgin America's original shareholders. The new round of capital may be less than $150m.
People familiar with Virgin America's structure enabled it to keep Black Canyon and Cyrus as stakeholders and remain in compliance with foreign-ownership rules even if the two firms recalled their capital.
Virgin Group plans to transfer the two firms' stakes to its new US investor group once the structure plan is approved. By May, Virgin America was in talks with at least five US funds. Virgin America and Cyrus did not return calls.
1 MaverickM11: I'm sorry, you'd have to be a complete idiot to invest in VX. I don't understand how anyone could look at their numbers in the context of the already
2 Ikramerica: Well, it's not so much a debate as a question of ownership, and assuming this is approved, then they will remain in compliance with the law. It would
3 BMI727: They are, and that is part of the attraction. Actually you'd have to be a complete idiot to invest in any airline. An industry with high capital cost
4 MaverickM11: Yes. VX has consistently made the other airlines look good
6 Azstar: True, or not, this has absolutely zero value in the airline business world. Very few individuals, if any, will book a flight for that reason unless t
7 Luv2cattlecall: I'm usually a proponent of VX, and supported them when AeroEskimo kept buzzing in their ears... however, I take issue with what appears to be a blata
8 BMI727: It does have little value, and I'm not about to pretend that this makes VX a good investment. But what is a bit more important is what they have to h
9 MaverickM11: Yet they all lose a helluva lot less money than VX. Why don't you put your own money into VX?
10 Atomsareenough: Well, yes and no. I'm a pretty typical (if somewhat more informed) member of the flying public, and I generally make my decision based in large part
11 Aerokiwi: God forbid! - So do most major US financial institutions. Perhaps they should be labelled "unpatriotic" next. Given United just borrowed on its spare
12 Atlwest1: I dont think its a matter of hate so much as it is that they are doing some shady things when it comes to ownership. Like it or not the law is the law
13 413x3: You can't push your free market globalization opinion through when the law still says domestic ownership. Change that rule, don't act like setting up
15 OA412: Some investors also thought differently and invested in Silverjet even in the face of heavy losses. Just because people are willing to invest doesn't
16 Kleiner: Clearly there aren't a whole lot of VX fans here, so let's pose a question that's never been asked: What success must VX have in order to gain your re
17 MaverickM11: How about more success than Skybus, because their investors pulled out of SX long before it got to the point where VX is now.
18 ElBandGeek: For me, I'd like to see them lose the attitude that they're god's gift to air travel. When they couldn't get the gates they wanted at ORD they pretty
20 Aerokiwi: Except they've been scrutinised by the FAA and appear to have met the criteria. Luv2cattlecall, however, is horrified that a financial firm has opera
21 MAH4546: Absolutely false. If that was true, then there would be no frequent flyer programs. Most flyers don't care. However, most flyers aren't profitable to
22 LAXintl: Wow indeed so many hatters. To me Virgin America truly is fresh air in the US market place. Their product and service on the ground and in the air is
23 Atlwest1: Unless they truely expand out of the niche they will never be well know and thus fails in the sense of trying to reach the maximum potential of passen
24 Atomsareenough: "Shady things" like *what*?? Where is there any actual evidence of that? I never said it was viable. I said some investors apparently think it's viab
25 UAL777: They are running the company off of the backs of their employees. Good riddance.
26 Hatbutton: Wait I'm confused. So this is an additional $150 million? Or is this just replacing the $150 that was pulled by the other investors? If that is the c
27 Aviators99: But Cyrus has been an investor since the beginning. Why is this just bothering you now?
28 United1: Small problem with anti-UA-ness in this case as UA does not fly SFO-ATL... Stop acting like they are entitled to special treatment in every market th
29 LAXintl: To my understanding all VX employees work there on their own free will. I'm not sure what angle you are following or accusations regarding employee e
30 Atlwest1: Well for many years they flew the route. I wasnt being anti UA far from it. I was just showing a route that was a viable route. When was it discontin
32 United1: IIRC it was cut a couple of years ago when fuel started spiking out of control. While I'm sure VX could do well in ATL I'm not sure if flying there i
33 United1: Wow only in November? seems farther back then that....oh well.
34 BMI727: I think that there are plenty of other places where VX could find a nice market where they wouldn't have to fight the combination of DL and FL.
35 LAXintl: Yup Nov 2008. I posted the news last July. UA Drops ORD-GEG/SJC, DEN-CLT, LAX-AUS/OAK,SFO-ATL (by LAXintl Jul 18 2008 in Civil Aviation)
36 CGKings317: Id also like to add that it is probable that there exists airports that are actively pursuing VX who could accommodate them easily and without m
37 UAL777: Their wages apply downward pressure on everyone else's wages. Their pilots are flying for darn near RJ wages.
38 Mk777: It would be nice to see VX offer flights from SAN and PDX to IAD in the near future, right now only LAX and SFO are connected. Any idea if this will e
39 DLPMMM: From what I read in the linked article, it looks like the capital infusion of capital will be used to take out the investments of both Black Canyon a
40 Enilria: As I've stated before, the financial numbers they are releasing in terms of cost are horsesh#t. If anybody believes them it is either because they ha
41 VS030: One can hardly expect them to compete with the likes of UA, DL, SW, etc in terms of salary after only two years! The pay scale isn't the best, but no
42 Atomsareenough: They've also got less than two years of seniority at most. I thought I read in one of the previous threads that IAD was one of their worst-performing
43 Enilria: I appreciate that. It's also fairly ironic that Cyrus both withdrew their funds and are putting funds back in. That smells of Branson sweetening the
44 Atomsareenough: Here's an interesting article by Brett Snyder: http://industry.bnet.com/travel/1000...9/virgin-america-gets-new-funding/ The way he describes it, Virg
45 Dartland: " target=_blank>http://industry.bnet.com/travel/1000...ding/ Good article indeed. It sounds to me like Cyrus is just putting up money with a guarante
46 Xdlx: I agree.. they should invest elswehere like www.citylinkair.com
47 Slcdeltarumd11: Even within those markets it has little public awareness. I live in NYC and most 99.56% of people have no idea what virgin america is. They would thi
48 Hatbutton: And that's the thing that makes me scratch my head. The OP cited an article where they are getting this money injected to end the debate on their own
49 BMI727: This might be slightly off topic, but do you guys think that VX would have had to deal with this much scrutiny and red tape if they didn't use the Vir
50 MAH4546: Virgin America has incredibly strong public awareness, especially on the West Coast. Virgin America is a full-service, 2-class airline. And the best
51 Hatbutton: Unfortunately I'll have to admit I doubt it. If SRB wasn't always so vocal about starting up a US airline and creating a worldwide Virgin airline, we
52 LAXintl: Maybe things are different in NY, but I cant go a day without running across something to do with Virgin America in my daily life. From billboards, b
53 Ridgid727: Thats interesting, considering they have travel contracts with a number of New York Based Companies who send hoards of people back and forthe between
54 BigGSFO: Which is why he is a billionaire. Business tenacity is not a bad thing. He knows how to use the press and is savvy with spin. Good thing or bad thing
55 FRNT787: Can no one say anything negative without hating something? This isnt an against us, or with us issue I hope... I hope they survive, truly. But, their
56 Hatbutton: No I definitely agree. I'm saying though that it's that same tenacity that has probably helped put VX under the microscope since he is a foreign inve
57 Atomsareenough: Oh, not at all. I frankly agree with you, and I would be quite wary about investing with them myself. But I do notice that there are certain a.net me
58 BigGSFO: Agreed. As an aside, I once read a book about the future of companies who are currently run by so called "superstar" CEOs. What Virgin will look like
59 EA CO AS: Alaska Airlines, which competes with Virgin America on routes to Seattle and other west coast cities, has questioned the carrier’s “US citizenship
60 Aviators99: The petition was meritless because nobody had (or has) pulled out their ownership yet. This is now a proposal that will allow the original investors
61 DocLightning: The question is: with such similar products, is there room for both? The only real difference is that B6 doesn't have F class. For me, I've considere
62 Aviators99: If you asked me last April, I would have said that if I didn't care about F class, I wouldn't care which airline I flew (between VX and B6). But havi
63 Murchmo: they are much more common, but... exactly. Got that right. Everyone i know who has flown it is raving. I live in LA and people keep stating that they
64 CGKings317: Except PDX where there is no VX presence and is a major west coast hole they should fill. Like many other people said, I would imagine that VX is a g
Murchmo From United States, joined Sep 2005, 55 posts, RR: 0 Reply 65, posted (4 months 5 days 10 hours ago) and read 2078 times:
Quoting CGKings317 (Reply 64): If they cannot yet get ORD or EWR, they should go for MIA, PDX, AUS and the like.
Agreed. AUS would be great for them.
They really need to get established coast to coast. On a side note I think this High Speed Rail is gonna have serious effects on air travel, specifically these routes up and down the west coast. All through California and there is talks of LA to Vegas and a Portland to Seattle. If airtravel does take a hit VX will fall if it doesn't get established and then expand
EA CO AS From United States, joined exactly 8 years ago today! , 9889 posts, RR: 73 Reply 66, posted (4 months 5 days 10 hours ago) and read 2052 times:
Quoting EA CO AS (Reply 59):
So if the petition was "meritless"....then why make the change? Especially when it may be replacing less capital than the original investors are pulling?
The petition was meritless because nobody had (or has) pulled out their ownership yet.
You sure about that?
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
Hatbutton From United States, joined Mar 2005, 789 posts, RR: 10 Reply 67, posted (4 months 5 days 1 hour ago) and read 1918 times:
Quoting Murchmo (Reply 63): But after flying Virgin its plain and simple, its the best airline for the buck. And unless a competitor is $50 cheaper i'm flying with them.
Well there's the million dollar question. Sure they are the best bang for the buck. But are they charging enough to cover their costs? It is a no brainer to choose the cheapest price when that price comes with all VX offers. But the jury's still out on whether or not they're creating a false sense of what you can offer for the dirt cheap fares they sell a majority of the time.
Lightsaber From United States, joined Jan 2005, 4978 posts, RR: 86 Reply 69, posted (4 months 5 days ago) and read 1831 times:
Quoting LAXintl (Thread starter): Hopefully this helps clarify the ownership debate, and surely the potential added $150mil will go some ways to keep VX funded and growing providing its excellent product.
Wow... I didn't expect this. I wasn't keen on the ownership debate, but this infusion of funds will keep VX flying probably until they're in the black. I honestly did not expect any significant funding to go their way. Since there is no 'eat crow' smilie: {Footinmouth}
Quoting CGKings317 (Reply 36): AUS has been mentioned. PDX is another candidate that fits VX's clientele.
Both of these cities have been hurting in this downturn. Exactly which city pairs do you think would work out? Based on AA dropping the 'nerd bird,' I doubt SFO-AUS would be a money maker for years.
Quoting MAH4546 (Reply 50): Virgin America has incredibly strong public awareness, especially on the West Coast.
Nitpick: They have good brand awareness among their target markets. However they advertised was pretty focused, as the blue collar set doesn't seem to know about them. Nothing wrong with that, but I'm surprised how few know about them but how well known they are in their target markets.
It will be interesting to see how the industry consolidation
Lightsaber
Need to throw a party every six months to organize the place.
CGKings317 From United States, joined Nov 2005, 73 posts, RR: 0 Reply 70, posted (4 months 4 days 23 hours ago) and read 1783 times:
Quoting Lightsaber (Reply 69): Both of these cities have been hurting in this downturn. Exactly which city pairs do you think would work out? Based on AA dropping the 'nerd bird,' I doubt SFO-AUS would be a money maker for years.
Nearly all cities are experiencing hurt during this downturn to a degree, but such a downturn did not stop VX from adding SNA. With respect to routes, I am thinking a PDX-SFO route would work well for them as well as PDX-LAX. With respect to SFO-PDX, its a short route that would not eat up a single aircraft for an entire day like transcons do. PDX is also a city that fits the clientele VX is courting. Lastly, If they truly want to be the west coast carrier of choice that serves major markets thereof, PDX represents a huge hole in their west coast network.
~CGKings317
I love planes & volcanoes but the 2 of them dont get along, just ask KLM867 & PH-BFC
Hatbutton From United States, joined Mar 2005, 789 posts, RR: 10 Reply 71, posted (4 months 4 days 23 hours ago) and read 1747 times:
Quoting Lightsaber (Reply 69):
Wow... I didn't expect this. I wasn't keen on the ownership debate, but this infusion of funds will keep VX flying probably until they're in the black. I honestly did not expect any significant funding to go their way.
From what I understand this is not an additional infusion of money. It is replacing the investors who recently pulled out.
Atlwest1 From United States, joined Jan 2009, 334 posts, RR: 0 Reply 72, posted (4 months 4 days 17 hours ago) and read 1616 times:
I think the problem is that they need to expand and to make a presense. When the extremly vast majority of the country doesnt know your name and you plan on being a force thats a problem. Trader Joes is a much loved super market. It isnt available in huge parts of this counrty but people know the name, crave it and do everythingthey can to get it into there city or area. Virgin needs to build that kind of following. Its wonderful many on here are loyal, however they are not reinventing the wheel. They offer nothing that Jet blue/Delta/Airtran/frontier dont offer They all offer more leg room in there respective premium classes or nose to tail, video screens and meals for purchase in coach(excluding Airtran) and good service. But maybe ill fly to JFK this month and do there transcon to SFO just to experience them. Who knows maybe ill be changed?
EA CO AS From United States, joined exactly 8 years ago today! , 9889 posts, RR: 73 Reply 73, posted (4 months 4 days 17 hours ago) and read 1598 times:
Quoting Lightsaber (Reply 69): Nitpick: They have good brand awareness among their target markets. However they advertised was pretty focused, as the blue collar set doesn't seem to know about them.
I don't believe the 'blue-collar set' is their target audience. Nevertheless, their problem is they're pricing themselves at 'blue-collar' levels in an attempt to gain market share and it's doing nothing but trashing yields for everyone in the markets they serve.
They'd be better served by positioning themselves as a boutique brand with slightly-higher-than-everyone-else prices.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
UA772IAD From Australia, joined Jul 2004, 1419 posts, RR: 3 Reply 74, posted (4 months 4 days 16 hours ago) and read 1536 times:
Quoting Atlwest1 (Reply 23): Unless they truely expand out of the niche they will never be well know and thus fails in the sense of trying to reach the maximum potential of passengers. Honest what are they doing that is so fresh that others arent or havent done before?
I have heard nothing but praise regarding their product and service, from friendly crews who consistently put forth their best efforts, to innovative in-flight products, to reliability and consistent service.
Financial matters aside, I find it odd that so many people on this site find VX's product differentiation a desecration. And yet, this commonly held view here is made more vivid by the irony that when B6 began, and offered it's own "cute" adornments, passengers enjoying blue potato chips while seated in an all leather-clad seat with personal DirecTV, it was, and still is considered innovative.
They do need to expand out of their niche markets, but have done relatively well thus far. I can't consider myself a fan, having not yet flown on them, but considering the hurdles that they have overcome, operating from expensive airports, starting during a difficult time for the air travel industry, and all the while trying to provide their customers with a truly novel and pleasant experience, they do deserve some praise.
Quoting Slcdeltarumd11 (Reply 47): Even within those markets it has little public awareness. I live in NYC and most 99.56% of people have no idea what virgin america is. They would think its some new teen movie before an airline
When jetblue came on the scene i remember quite alot of public awareness/buzz because a low cost airline with new entertainment at the time was in the area. I remember jetblue all over the local new and local newspaper articles. virgina america has had nothing for the general public probably becuse PTVs and a low cost airline are now much more common.
I would think that the Bay Area would disagree with you. They may not fly to SJC or OAK, but they continue to run a constant and bold advertising scheme in San Francisco. Not to mention, the deterioration of flights at SJC and OAK, save for WN, indicate that SFO is the preferred airport in the Bay.
Don't forget, when they began operations in SF, Branson put on a big show: hosting a huge party at the Clift Hotel, illuminating the city's landmarks in red, running full page ads in the Chronicle. Even today, the airline's vogue modelled ads still decorate many BART stations, lamppost banners and billboards along the 101.
Also their ads don't suggest that they are a LCC, but an alternative to the monotonous....
MaverickM11 From United States, joined Apr 2000, 11881 posts, RR: 51 Reply 76, posted (4 months 4 days 12 hours ago) and read 1361 times:
Quoting EA CO AS (Reply 73):
They'd be better served by positioning themselves as a boutique brand with slightly-higher-than-everyone-else prices.
That's basically their business plan. Unfortunately that was also the plan at EOS, Maxjet, Silverjet, L'avion, Openskies, Legend, MGM Grand Air, etc....
EA CO AS From United States, joined exactly 8 years ago today! , 9889 posts, RR: 73 Reply 78, posted (4 months 4 days 11 hours ago) and read 1293 times:
AirplaneBoy From United States, joined May 2004, 518 posts, RR: 29 Reply 79, posted (4 months 4 days 10 hours ago) and read 1254 times:
Quoting MAH4546 (Reply 50): Virgin America is a full-service
Just curious, what would be considered full service? At most carriers, economy passengers generally have to pay separate ancillary fees for checking luggage, purchasing snacks, etc. I understand that their first class passengers receive "full service," but their economy passengers still receive a similar product to most other U.S. carriers (i.e. seatback inflight entertainment, complimentary soft drinks/juices, buy-on-board snacks/sandwiches, checked luggage fees, etc). Other than being in a cabin equipped with mood-lighting, I don't see how different VX's domestic Y product is. Just my $0.02. B6, DL, and F9 come to mind when thinking of similar Y concepts - although with some variations.
I've lost money on every airline investment I've ever made.
Quoting EA CO AS (Reply 59):
So if the petition was "meritless"....then why make the change?
Because that was a lie. Press releases are all lies. I've been wondering whether to make this a separate thread, but here is a simple translation table for airline press releases and how to read them.
Quarterly Earnings Release Headlines
How to translate them: "Profits increased this quarter"="We had a one-time gain"
"Revenue increased"="Cost increased more than revenue"
"Load Factor was up"="Revenue was down"
"Yields were up"="Load Factor was down"
Service Announcement Quotes "We look forward to working with our partners in this new market" = "Our weasel alliance partners added flights from our hub and we'll be doing the same to them"
"We are confident that this new market will perform well"="We got a huge check from the airport to fly there"
"We feel the market is underserved"="It's massively overserved by the airline we dislike and once we uproot them we'll make sure it is underserved"
"Our customers told us that we needed to add service"="I've never met a customer and I don't know if we write down their comments, but this way if it tanks I can blame them"
Staffing Changes "Our CFO wanted to spend more time with his family"="Rats, ship; Exit, please"
"We wish our VP luck in his new career"="The weasel went to a competitor and we will do everything we can to crush him"
"Our VP is pursuing other options"="Canned, unemployed"
Marketing Releases "We are proud to sponsor the Rockville Ravens"="The drunken, morons who live in Rockville will fly on us now"
"Our $30 fare sale are the lowest prices since..."="...last week when it was $29"
"Senator McGergin is proud to dedicate our newest airplane 'Idaho One' in the colors of that great state"="Senator McGergin voted to allow us to dump our underfunded pension on the federal government"
"We are entertaining offers from a number of cities for our new headquarters"="We are looking for free money to stay exactly where we are and not hire a single person...probably fire some"
MaverickM11 From United States, joined Apr 2000, 11881 posts, RR: 51 Reply 81, posted (4 months 4 days 3 hours ago) and read 1083 times:
Quoting EA CO AS (Reply 78): Except the initial part of their business plan involves trying to shift share their way via a scorched-earth policy of unsustainable fares.
I understand they want to be a premium carrier, but you just can't do that without the premium schedule. End of story.
Quoting Enilria (Reply 80): Quarterly Earnings Release Headlines
How to translate them:
"Profits increased this quarter"="We had a one-time gain"
"Revenue increased"="Cost increased more than revenue"
"Load Factor was up"="Revenue was down"
"Yields were up"="Load Factor was down"
I'd add one, particularly relevant to VX:
"RASM was up" = "There was no where to go but up from last year's numbers"
AirFrnt From United States, joined Jul 2004, 2511 posts, RR: 37 Reply 82, posted (4 months 4 days 2 hours ago) and read 1043 times:
Quoting LAXintl (Thread starter):
Hopefully this helps clarify the ownership debate, and surely the potential added $150mil will go some ways to keep VX funded and growing providing its excellent product.
Bear in mind, RJET is about to walk away with F9, a carrier much larger then VX, with a stable hub, making a steady profit, for something along this amount of money. VX's business model makes a lot of sense in a stratified world, with only one or two legacy competitors. It makes no sense in the hyper-competitive US markets. These investors are paying 150 million for a name, not much else.
413X3 From United States, joined Jul 2008, 990 posts, RR: 0 Reply 83, posted (4 months 4 days 2 hours ago) and read 1034 times:
Quoting Slcdeltarumd11 (Reply 47): Even within those markets it has little public awareness. I live in NYC and most 99.56% of people have no idea what virgin america is. They would think its some new teen movie before an airline
where do you get your opinion polls from? I find that completely illogical and downright wrong on all levels
Aviators99 From United States, joined May 2008, 363 posts, RR: 1 Reply 85, posted (4 months 3 days 23 hours ago) and read 880 times:
Quoting EA CO AS (Reply 78): Problem is, they're not driving enough their way and aren't raising fares either. Sooner or later, something's gotta give.
I don't agree with this, as the LF numbers seem pretty good to me.
Anecdotally, I've looked at SEA-SFO-SEA over the past two weeks and the flights have nearly all been at 100%, so I would expect this quarter's load factors to be even higher. I've also seen higher fares in coach, but F class has stayed where it has been.
I believe they are following your plan to the letter, just later than you expected.
EA CO AS From United States, joined exactly 8 years ago today! , 9889 posts, RR: 73 Reply 86, posted (4 months 3 days 20 hours ago) and read 762 times:
Quoting Aviators99 (Reply 85): Quoting EA CO AS (Reply 78):
Problem is, they're not driving enough their way and aren't raising fares either. Sooner or later, something's gotta give.
I don't agree with this, as the LF numbers seem pretty good to me.
Anecdotally, I've looked at SEA-SFO-SEA over the past two weeks and the flights have nearly all been at 100%, so I would expect this quarter's load factors to be even higher.
High loads of loss-leader fares still equal a loss, no matter how you slice it. Your statement actually reinforces my point, though - when you're running what is essentially a full operation and are STILL losing money hand over fist, fares need to go up.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
Sponsor Message: 
From United States, joined May 2000, 12054 posts, 
, 9889 posts, 
From Australia, joined Jul 2004, 1419 posts, 
Hence why I posted "They have good brand awareness among their target markets" first. 
From Canada, joined Feb 2008, 2194 posts, 
Printer friendly format 
