LAXintl From United States of America, joined May 2000, 18914 posts, RR: 51 Posted (2 years 10 months 2 weeks 2 days 14 hours ago) and read 6849 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.
MaverickM11 From United States of America, joined Apr 2000, 14246 posts, RR: 51 Reply 1, posted (2 years 10 months 2 weeks 2 days 14 hours ago) and read 6795 times:
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 miserable airline industry and think they look like a great opportunity to do anything but destroy capital.
Ikramerica From United States of America, joined May 2005, 20630 posts, RR: 62 Reply 2, posted (2 years 10 months 2 weeks 2 days 14 hours ago) and read 6793 times:
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 be interesting to see who invests in Cyrus and others, and if having hedge funds involved is a way of "laundering" foreign money into a domestic structure. A lot of hedge funds are pretty shady. But because they are private and not a bank or brokerage, they have limited disclosure requirements right now. That might change as Congress looks to regulate them more.
Either way, the $150 million will help them sustain their losses through the rest of the year, at least. If the economy improves, it might even give them a chance to turn a profit before they need more capital.
Of all the things to worry about... the Wookie has no pants.
BMI727 From United States of America, joined Feb 2009, 11535 posts, RR: 27 Reply 3, posted (2 years 10 months 2 weeks 2 days 14 hours ago) and read 6741 times:
Quoting Ikramerica (Reply 2): A lot of hedge funds are pretty shady.
They are, and that is part of the attraction.
Quoting MaverickM11 (Reply 1): I'm sorry, you'd have to be a complete idiot to invest in VX.
Actually you'd have to be a complete idiot to invest in any airline. An industry with high capital costs and zero profit margin is not a good place for money.
As far as airline investments go, VX is probably one of the least bad, at least for pax carriers flying under their own name. They have the benefit of a strong charismatic leader in Sir Richard who won't go down without a fight plus an in-flight product that is superior to most American legacy carriers. They seem to have also gained a reputation as a young, hip airline (for what that's worth) and have a globally recognized brand name.
Why do Aerospace Engineering students have to turn things in on time?
MaverickM11 From United States of America, joined Apr 2000, 14246 posts, RR: 51 Reply 4, posted (2 years 10 months 2 weeks 2 days 14 hours ago) and read 6733 times:
Quoting BMI727 (Reply 3): Actually you'd have to be a complete idiot to invest in any airline
Yes.
Quoting BMI727 (Reply 3): VX is probably one of the least bad
VX has consistently made the other airlines look good
BMI727 From United States of America, joined Feb 2009, 11535 posts, RR: 27 Reply 5, posted (2 years 10 months 2 weeks 2 days 14 hours ago) and read 6733 times:
Quoting MaverickM11 (Reply 4): VX has consistently made the other airlines look good
How so?
Why do Aerospace Engineering students have to turn things in on time?
Azstar From United States of America, joined May 2005, 455 posts, RR: 0 Reply 6, posted (2 years 10 months 2 weeks 2 days 13 hours ago) and read 6647 times:
Quoting BMI727 (Reply 3): They seem to have also gained a reputation as a young, hip airline (for what that's worth) and have a globally recognized brand name.
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 they are the cheapest carrier. The American traveling public is very fickle.
Luv2cattlecall From United States of America, joined Sep 2007, 1648 posts, RR: 2 Reply 7, posted (2 years 10 months 2 weeks 2 days 13 hours ago) and read 6640 times:
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 blatant skirting of the law (though if they just found a loophole to a dumb rule, all the power to them. Cyrus has huge holdings in London, and even has offices there (I question their US presence, actually, considering they have less than 700 sq. feet of office space in the United States, and they don't even have a toll free number here!). One loophole I can imagine is:
Investor A lives in the USA, and invests $10,000,000 with Cyrus. In 2001, that $10,000,000 was invested in European holdings.
Investor B(ranson) lives in the U.K., and wants to shovel $10 million to VX, but can't due to ownership rules.
Cyrus makes a paper transaction, which basically makes it look like Investor A's money is invested in VX, which is perfectly ok since he's a US Citizen. Investor B's money is now "swapped", and as far as the records are concerned, it's his money in the European investments.
As long as Investor A gets his promised returns, he's blind to the goings on, and it's really not hurting him (unless Cyrus somehow goes under).
Quoting Ikramerica (Reply 2):
It would be interesting to see who invests in Cyrus and others, and if having hedge funds involved is a way of "laundering" foreign money into a domestic structure.
Quoting MaverickM11 (Reply 4): VX has consistently made the other airlines look bad, old, outdated, drab, and way behind
Fixed that for you
Quoting LAXintl (Thread starter): People familiar with Virgin America's structure enabled it to keep Black Canyon
Black Canyon isn't a funny money type of firm like Cyrus...they have significant holdings in true US companies. What's interesting, however, is that they tend to invest in companies that are doing really, for lack of a better term, shitty. Their crown jewel investment is a company that sells pre-made salads and pre-chopped onions and tomatoes to retailers... not exactly an industry with a high barrier to entry or steller returns. It's one of those companies whose presence warns other investors that it's time to bail... They're what's sometimes called a "Hospice Investor"...99% of their companies will wither and die soon, but the 1% that get better are what their clients will remember and what they flaunt.
When you have to breaststroke to your connecting flight...it's a crash!
BMI727 From United States of America, joined Feb 2009, 11535 posts, RR: 27 Reply 8, posted (2 years 10 months 2 weeks 2 days 13 hours ago) and read 6618 times:
Quoting Azstar (Reply 6): 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 they are the cheapest carrier. The American traveling public is very fickle.
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 have gotten that image. The IFE, in-flight product, etc. are all things that could potentially swing customers in a world where air fares are very close to each other and any bit of product differentiation counts.
Why do Aerospace Engineering students have to turn things in on time?
MaverickM11 From United States of America, joined Apr 2000, 14246 posts, RR: 51 Reply 9, posted (2 years 10 months 2 weeks 2 days 13 hours ago) and read 6587 times:
Atomsareenough From United States of America, joined Feb 2008, 543 posts, RR: 2 Reply 10, posted (2 years 10 months 2 weeks 2 days 13 hours ago) and read 6540 times:
Quoting Azstar (Reply 6): 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 they are the cheapest carrier. The American traveling public is very fickle.
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 on price. However, if I have had a bad experience with a particular airline, then I tend to avoid them if possible, and if I have a good experience with an airline, then all things being equal, or at least close to equal (within say, $20-30), I will tend to reward them with continued business. I've had consistently good experiences with VX, and their fares are generally competitive, so I continue to fly them when possible.
Quoting MaverickM11 (Reply 9): VX has consistently made the other airlines look good
Yeah, you hate them and wish they'd go away, we get it. Yes, they've been losing a lot of money, but evidently these investors think differently than you about their long-term prospects, so it seems they'll be around for at least another year or so. Sorry.
Aerokiwi From New Zealand, joined Jul 2000, 2253 posts, RR: 5 Reply 11, posted (2 years 10 months 2 weeks 2 days 12 hours ago) and read 6509 times:
Quoting Luv2cattlecall (Reply 7): Cyrus has huge holdings in London, and even has offices there
God forbid! - So do most major US financial institutions. Perhaps they should be labelled "unpatriotic" next.
Given United just borrowed on its spares stock for an alarmingly high interest rate, perhaps the investors are betting there is going to be a fairly hefty void in the San Francisco area aviation market fairly soon?
Atlwest1 From United States of America, joined Jan 2009, 1015 posts, RR: 1 Reply 12, posted (2 years 10 months 2 weeks 2 days 12 hours ago) and read 6501 times:
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 until it is changed or relaxed its meant to be followed. Call Alaska AeroEskimo if you will but it is a sound carrier playing by the rules and is a much loved carrier and flies far more pax to far more places then Virgin America will in a while. Yes it is a hip carrier but for the population outside LAX SEA SFO and JFK it has zero to almost nil public awareness. Even a boutique brand needs to have aspirational customers that may not be able to get to it but know about it and will try when they are. VA is hardly that sorry
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co. or Airt
413x3 From United States of America, joined Jul 2008, 1983 posts, RR: 0 Reply 13, posted (2 years 10 months 2 weeks 2 days 12 hours ago) and read 6488 times:
Quoting Aerokiwi (Reply 11): God forbid! - So do most major US financial institutions. Perhaps they should be labelled "unpatriotic" next.
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 a front American firm to in fact do what everyone said you were going to do is not unethical and skirting the law
Kleiner From United States of America, joined Dec 2008, 127 posts, RR: 0 Reply 14, posted (2 years 10 months 2 weeks 2 days 11 hours ago) and read 6377 times:
OA412 From United States of America, joined Dec 2000, 4910 posts, RR: 21 Reply 15, posted (2 years 10 months 2 weeks 2 days 11 hours ago) and read 6371 times:
Quoting Atomsareenough (Reply 10): Yeah, you hate them and wish they'd go away, we get it. Yes, they've been losing a lot of money, but evidently these investors think differently than you about their long-term prospects, so it seems they'll be around for at least another year or so. Sorry.
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 mean that something is a viable concern.
Kleiner From United States of America, joined Dec 2008, 127 posts, RR: 0 Reply 16, posted (2 years 10 months 2 weeks 2 days 9 hours ago) and read 6203 times:
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 respect?
Number of Routes? Profit margins? Number of Aircraft? Pax numbers? Years in existence?What measurement gains your respect?
MaverickM11 From United States of America, joined Apr 2000, 14246 posts, RR: 51 Reply 17, posted (2 years 10 months 2 weeks 2 days 9 hours ago) and read 6161 times:
Quoting Kleiner (Reply 16): What success must VX have in order to gain your respect?
How about more success than Skybus, because their investors pulled out of SX long before it got to the point where VX is now.
ElBandGeek From United States of America, joined Jun 2008, 700 posts, RR: 0 Reply 18, posted (2 years 10 months 2 weeks 2 days 9 hours ago) and read 6084 times:
Quoting Kleiner (Reply 16): What success must VX have in order to gain your respect?
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 much threw a hissy fit acting as if they couldn't believe Chicago wasn't just begging them to come in and save us all from UA and AA...not that they would consider lowering themselves to flying from MDW alongside the scum of the air WN. (exaggerating of course)
A good product is no excuse for being a prick (much like a certain other bay area company that I won't mention, but have similar feelings for. hint: they're named after fruit)
SAN88 From United States of America, joined Jul 2006, 72 posts, RR: 1 Reply 19, posted (2 years 10 months 2 weeks 2 days 8 hours ago) and read 6049 times:
Quoting ElBandGeek (Reply 18): I'd like to see them lose the attitude that they're god's gift to air travel.
Aerokiwi From New Zealand, joined Jul 2000, 2253 posts, RR: 5 Reply 20, posted (2 years 10 months 2 weeks 2 days 8 hours ago) and read 6021 times:
Quoting 413x3 (Reply 13): ou 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 a front American firm to in fact do what everyone said you were going to do is not unethical and skirting the law
Except they've been scrutinised by the FAA and appear to have met the criteria.
Luv2cattlecall, however, is horrified that a financial firm has operations abroad, as if this somehow disqualifies them from investment in an airline.
MAH4546 From Sweden, joined Jan 2001, 30434 posts, RR: 77 Reply 21, posted (2 years 10 months 2 weeks 2 days 8 hours ago) and read 5987 times:
Quoting Azstar (Reply 6): 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 they are the cheapest carrier. The American traveling public is very fickle.
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 an airline.
The profitable flyers - those paying the high fares, flying in premium cabins, working for elite status - absolutely book based on what the airline is.
Those top flyers may represent as little as 15% of an airline's passenger base, but as much as 50-60% of an airline's profits.
Virgin America has done a great job establishing a name for itself, and it has a ways to go, but just like JetBlue has built huge loyalty, so can Virgin America.
I personally do not shop for fares - I stick to one airline. There are easily 3M+ people like me in the U.S. that don't cross-shop airlines.
LAXintl From United States of America, joined May 2000, 18914 posts, RR: 51 Reply 22, posted (2 years 10 months 2 weeks 2 days 8 hours ago) and read 5946 times:
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 truly exemplary. They have done a good job of developing both an innovative premium domestic F class and economy product. They have incredible marketing talent with clever sponsorship and participation in all types of things from seat coverings at Lakers games to novelty drinks at bars, and even singles dating events.
Sure they are more of niche player focused on more of the yuppy hip tech crowd, however besides JetBlue I don't see another US carrier that matches them on the same product points.
For the sake of competition and choice I certainly hope they have a long future in Americas skies.
From the desert to the sea, to all of Southern California
Atlwest1 From United States of America, joined Jan 2009, 1015 posts, RR: 1 Reply 23, posted (2 years 10 months 2 weeks 2 days 7 hours ago) and read 5867 times:
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? A perfect example of missed oppurtunity would be Austin. Austin would be a GREAT market for Virgin America. They could have used there "great marketing" and just moved the Nerd bird the few miles up the road to SFO and really been successful on that route. They could probably slip into Atlanta another very good market with alot of that demographic that they cater to and bump off UA from the Atl-SFO route. I think they have a good product. If they want to be successful they need to expanded it out a bit. I dont think they will go belly up, but i do think they could be bought and or merged into a larger entity.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co. or Airt
Atomsareenough From United States of America, joined Feb 2008, 543 posts, RR: 2 Reply 24, posted (2 years 10 months 2 weeks 2 days 7 hours ago) and read 5815 times:
Quoting Atlwest1 (Reply 12): 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.
"Shady things" like *what*?? Where is there any actual evidence of that?
Quoting OA412 (Reply 15): Just because people are willing to invest doesn't mean that something is a viable concern.
I never said it was viable. I said some investors apparently think it's viable. All I said is that with another $150 million, they should at least be able to stick around for another year or so.
UAL777 From United States of America, joined Aug 2003, 1447 posts, RR: 5 Reply 25, posted (2 years 10 months 2 weeks 2 days 6 hours ago) and read 5816 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? A perfect example of missed oppurtunity would be Austin. Austin would be a GREAT market for Virgin America. They could have used there "great marketing" and just moved the Nerd bird the few miles up the road to SFO and really been successful on that route. They could probably slip into Atlanta another very good market with alot of that demographic that they cater to and bump off UA from the Atl-SFO route. I think they have a good product. If they want to be successful they need to expanded it out a bit. I dont think they will go belly up, but i do think they could be bought and or merged into a larger entity.
They are running the company off of the backs of their employees. Good riddance.
Hatbutton From United States of America, joined Mar 2005, 1379 posts, RR: 16 Reply 26, posted (2 years 10 months 2 weeks 2 days 6 hours ago) and read 6170 times:
Quoting Atomsareenough (Reply 24):
I never said it was viable. I said some investors apparently think it's viable. All I said is that with another $150 million, they should at least be able to stick around for another year or so.
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 case, then they still have cash issues. All they've succeeded in doing is keeping everyone off their backs about ownership.
Aviators99 From United States of America, joined May 2008, 430 posts, RR: 0 Reply 27, posted (2 years 10 months 2 weeks 2 days 6 hours ago) and read 6149 times:
Quoting Luv2cattlecall (Reply 7): 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 blatant skirting of the law (though if they just found a loophole to a dumb rule, all the power to them. Cyrus has huge holdings in London, and even has offices there (I question their US presence, actually, considering they have less than 700 sq. feet of office space in the United States, and they don't even have a toll free number here!).
But Cyrus has been an investor since the beginning. Why is this just bothering you now?
United1 From United States of America, joined Oct 2003, 4879 posts, RR: 8 Reply 28, posted (2 years 10 months 2 weeks 2 days 6 hours ago) and read 6161 times:
Quoting Atlwest1 (Reply 23): They could probably slip into Atlanta another very good market with alot of that demographic that they cater to and bump off UA from the Atl-SFO route.
Small problem with anti-UA-ness in this case as UA does not fly SFO-ATL...
Quoting Kleiner (Reply 16): What success must VX have in order to gain your respect?
Stop acting like they are entitled to special treatment in every market that they try to enter....ORD and EWR are examples of that.
LAXintl From United States of America, joined May 2000, 18914 posts, RR: 51 Reply 29, posted (2 years 10 months 2 weeks 2 days 6 hours ago) and read 6131 times:
Quoting UAL777 (Reply 25): They are running the company off of the backs of their employees.
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 exploitation.
From the desert to the sea, to all of Southern California
Atlwest1 From United States of America, joined Jan 2009, 1015 posts, RR: 1 Reply 30, posted (2 years 10 months 2 weeks 2 days 6 hours ago) and read 6119 times:
Quoting United1 (Reply 28): Small problem with anti-UA-ness in this case as UA does not fly SFO-ATL...
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 discontinued? It use to be an A319 route.
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co. or Airt
LAXintl From United States of America, joined May 2000, 18914 posts, RR: 51 Reply 31, posted (2 years 10 months 2 weeks 2 days 6 hours ago) and read 6090 times:
United1 From United States of America, joined Oct 2003, 4879 posts, RR: 8 Reply 32, posted (2 years 10 months 2 weeks 2 days 6 hours ago) and read 6088 times:
Quoting Atlwest1 (Reply 30): When was it discontinued? It use to be an A319 route.
IIRC it was cut a couple of years ago when fuel started spiking out of control.
Quoting Atlwest1 (Reply 30): I was just showing a route that was a viable route
While I'm sure VX could do well in ATL I'm not sure if flying there is a good idea. Remember DL/FL vs B6....
United1 From United States of America, joined Oct 2003, 4879 posts, RR: 8 Reply 33, posted (2 years 10 months 2 weeks 2 days 6 hours ago) and read 6076 times:
Quoting United1 (Reply 32): Quoting Atlwest1 (Reply 30):
When was it discontinued? It use to be an A319 route.
IIRC it was cut a couple of years ago when fuel started spiking out of control.
BMI727 From United States of America, joined Feb 2009, 11535 posts, RR: 27 Reply 34, posted (2 years 10 months 2 weeks 2 days 6 hours ago) and read 6050 times:
Quoting United1 (Reply 32): While I'm sure VX could do well in ATL I'm not sure if flying there is a good idea. Remember DL/FL vs B6....
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.
Why do Aerospace Engineering students have to turn things in on time?
LAXintl From United States of America, joined May 2000, 18914 posts, RR: 51 Reply 35, posted (2 years 10 months 2 weeks 2 days 6 hours ago) and read 6079 times:
Quoting United1 (Reply 33): Wow only in November? seems farther back then that....oh well.
CGKings317 From Canada, joined Nov 2005, 284 posts, RR: 8 Reply 36, posted (2 years 10 months 2 weeks 2 days 6 hours ago) and read 6054 times:
AIRLINERS.NET CREW CHAT OPERATOR
Quoting Kleiner (Reply 16): What success must VX have in order to gain your respect?
Number of Routes? Profit margins? Number of Aircraft? Pax numbers? Years in existence?What measurement gains your respect?
Quoting United1 (Reply 28): Stop acting like they are entitled to special treatment in every market that they try to enter....ORD and EWR are examples of that.
  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 much wrangelling, allowing them to expand more seamlessly without the hoops and obstacles ORD and EWR present. AUS has been mentioned. PDX is another candidate that fits VX's clientele. I read somewhere that PHX and AZA are battling it out to woo VX to set up shop at their respected airports.
BTW, how are they doing implementing there "30 cities in 5 years" goal? Are they still on track in that regard? Its awfully hard to build a customer base with only a handful of cities on the route map.
~CGKings317 Â
[Edited 2009-07-09 23:57:59]
[Edited 2009-07-10 00:00:03]
I love ✈ & volcanoes but the 2 of them dont get along, just ask KLM867 & PH-BFC
UAL777 From United States of America, joined Aug 2003, 1447 posts, RR: 5 Reply 37, posted (2 years 10 months 2 weeks 2 days 5 hours ago) and read 6003 times:
Quoting LAXintl (Reply 29):
Confused 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 exploitation.
Their wages apply downward pressure on everyone else's wages. Their pilots are flying for darn near RJ wages.
DLPMMM From United States of America, joined Apr 2005, 3397 posts, RR: 10 Reply 39, posted (2 years 10 months 2 weeks 2 days ago) and read 5413 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.
Quoting Ikramerica (Reply 2): Either way, the $150 million will help them sustain their losses through the rest of the year, at least. If the economy improves, it might even give them a chance to turn a profit before they need more capital
Quoting Hatbutton (Reply 26): 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?
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 and Cyrus. The amount may be (will be) less than the $150 million initially invested. Cyrus will be a member of the new ownership group.
It looks like there is no money in this transaction for an operating capital infusion.
Quoting the linked article:
"The new round of capital may be less than $150m, reflecting the steep falls many US airline stocks have endured as demand slumped."
Cyrus will be a member of the new USA investment group that will take over the 76% share holding of Virgin America.
Quoting the linked article:
"Virgin Group plans to transfer the two firms’ stakes to its new US investor group once the structure plan is approved. "
Enilria From Canada, joined Feb 2008, 5223 posts, RR: 12 Reply 40, posted (2 years 10 months 2 weeks 1 day 23 hours ago) and read 5258 times:
Quoting MaverickM11 (Reply 1): 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 miserable airline industry and think they look like a great opportunity to do anything but destroy capital.
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 have only looked at the press releases and not the detailed Form41 categories OR they just don't know how much it costs to operate an Airbus narrowbody.
Having said that, they are still losing money IMHO. I would say they are losing 7 to 12 cents on every dollar which is still poor, but not terribly out of line with the rest of the industry. If they were losing 30 cents on the dollar, as they would have you believe, liquidation would be imminent, but as a private company intertwined with numerous other sister entities there really is no requirement for them to provide SEC quality profit and loss statements.
With that level of loss and with the long shadow Branson casts over numerous industries I'm sure he can cajole investors into participating in return for being involved in some of his many other profitable businesses. This whole witch-hunt is pointless because the rules are too easily circumvented by a well-financed company with a lot of lawyers. The only airlines that are ever going to get shutdown for foreign ownership problems are going to be small prop carriers or charter airlines with too little money to juggle things to DOT's liking.
VS030 From Barbados, joined Sep 2008, 15 posts, RR: 0 Reply 41, posted (2 years 10 months 2 weeks 1 day 22 hours ago) and read 5096 times:
Quoting UAL777 (Reply 37): Their wages apply downward pressure on everyone else's wages. Their pilots are flying for darn near RJ wages.
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 not that bad in my opinion.
Quoting Enilria (Reply 40): With that level of loss and with the long shadow Branson casts over numerous industries I'm sure he can cajole investors into participating in return for being involved in some of his many other profitable businesses. This whole witch-hunt is pointless because the rules are too easily circumvented by a well-financed company with a lot of lawyers. The only airlines that are ever going to get shutdown for foreign ownership problems are going to be small prop carriers or charter airlines with too little money to juggle things to DOT's liking.
Atomsareenough From United States of America, joined Feb 2008, 543 posts, RR: 2 Reply 42, posted (2 years 10 months 2 weeks 1 day 22 hours ago) and read 4951 times:
Quoting UAL777 (Reply 37):
Their wages apply downward pressure on everyone else's wages. Their pilots are flying for darn near RJ wages.
They've also got less than two years of seniority at most.
Quoting Mk777 (Reply 38): It would be nice to see VX offer flights from SAN and PDX to IAD in the near future
I thought I read in one of the previous threads that IAD was one of their worst-performing stations... I can't see them adding routes there. It'd be nice if they added PDX from SFO and LAX though.
Quoting DLPMMM (Reply 39):
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 and Cyrus. The amount may be (will be) less than the $150 million initially invested. Cyrus will be a member of the new ownership group.
Ah, I don't have a subscription to the FT to read the whole article, and the way LAXIntl (the thread starter) made it sound, it was additional capital. Maybe it isn't, then.
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 deal for them in some respect. I think they probably realized they had some leverage over VX and used it to secure better terms in some respect, otherwise why would they return now when the industry is in worse shape?
Atomsareenough From United States of America, joined Feb 2008, 543 posts, RR: 2 Reply 44, posted (2 years 10 months 2 weeks 1 day 20 hours ago) and read 4451 times:
The way he describes it, Virgin Group paid off the original investors but let them retain the voting shares to stay compliant with the ownership constraints. So, that means the new investors would have to bring their money to the table, right? Well, it's unclear to me whether the ~$150 million or so that the new investors are bringing will go into VX, or if it will go towards paying back Virgin Group.
Dartland From United States of America, joined Apr 2005, 614 posts, RR: 2 Reply 45, posted (2 years 10 months 2 weeks 1 day 19 hours ago) and read 4230 times:
Good article indeed. It sounds to me like Cyrus is just putting up money with a guaranteed return from Virgin to fulfill ownership requirements. It'll be interesting to see if the DOT agrees to this another time around, especially since Cyrus is probably getting even better terms in its second round.
The only other explanation is that Cyrus is suddenly more bullish on VX and is willing to invest again w/o that withdrawal clause -- but I'm not sure enough has changed since they withdrew their original investment to warrant better terms. I have to believe Virgin and Sir Richard are behind this in some way....
The Obama DOT might not be so keen on this arrangement...especially if they get some lobbying from the network carriers.
Xdlx From United States of America, joined Aug 2008, 415 posts, RR: 0 Reply 46, posted (2 years 10 months 2 weeks 1 day 19 hours ago) and read 4232 times:
Slcdeltarumd11 From United States of America, joined Jan 2004, 1902 posts, RR: 0 Reply 47, posted (2 years 10 months 2 weeks 1 day 19 hours ago) and read 4238 times:
Quoting Atlwest1 (Reply 12): Yes it is a hip carrier but for the population outside LAX SEA SFO and JFK it has zero to almost nil public awareness.
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.
Hatbutton From United States of America, joined Mar 2005, 1379 posts, RR: 16 Reply 48, posted (2 years 10 months 2 weeks 1 day 19 hours ago) and read 4145 times:
Quoting Dartland (Reply 45): Good article indeed. It sounds to me like Cyrus is just putting up money with a guaranteed return from Virgin to fulfill ownership requirements.
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 ownership issues. So is that in some way admitting that they were out of compliance the last few months?
BMI727 From United States of America, joined Feb 2009, 11535 posts, RR: 27 Reply 49, posted (2 years 10 months 2 weeks 1 day 19 hours ago) and read 4112 times:
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 Virgin name?
Why do Aerospace Engineering students have to turn things in on time?
MAH4546 From Sweden, joined Jan 2001, 30434 posts, RR: 77 Reply 50, posted (2 years 10 months 2 weeks 1 day 18 hours ago) and read 4126 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
Virgin America has incredibly strong public awareness, especially on the West Coast.
Quoting Slcdeltarumd11 (Reply 47): virgina america has had nothing for the general public probably becuse PTVs and a low cost airline are now much more common.
Virgin America is a full-service, 2-class airline. And the best one in the U.S., IMO, in terms of it.
Hatbutton From United States of America, joined Mar 2005, 1379 posts, RR: 16 Reply 51, posted (2 years 10 months 2 weeks 1 day 18 hours ago) and read 4065 times:
Quoting BMI727 (Reply 49): 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 Virgin name?
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 might not look at the details with such scrutiny.
But at the same time, it is hard to not notice them when he is always all over every press appearance and release they have even though he technically isn't "running" the airline. So that in itself makes people suspect certain things. I'm sure if you asked the general public who ran VX, they'd probably guess Branson.
It also doesn't help VX's cause when Branson continually criticizes US foreign investment laws. Whether or not you agree with these laws, his protest of them certainly shows everyone that if he had it his way, he'd be able to invest as much money as he wants in VX. So I'm sure he has looked at every loophole he could in order to find out if there was some way to get a deal done that would still fit within the law. His intentions show how determined he is to make VX work.
LAXintl From United States of America, joined May 2000, 18914 posts, RR: 51 Reply 52, posted (2 years 10 months 2 weeks 1 day 18 hours ago) and read 4060 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
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.
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, bus benches, online banners (even this site), or other advertising they very much have their name out and a 'buzz' or brand awareness here in Los Angeles, particularly in the more mid-upper class neighborhoods.
Quoting MAH4546 (Reply 50): And the best one in the U.S., IMO, in terms of it.
  and others feel the same way.
They just picked up another award today. Best Domestic Airline in the US from Travel + Leisure Magazine.
[Edited 2009-07-10 11:19:34]
From the desert to the sea, to all of Southern California
Ridgid727 From United States of America, joined Jul 2008, 832 posts, RR: 1 Reply 53, posted (2 years 10 months 2 weeks 1 day 18 hours ago) and read 4022 times:
Quoting Slcdeltarumd11 (Reply 47): 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
Thats interesting, considering they have travel contracts with a number of New York Based Companies who send hoards of people back and forthe between JFK & LAX and SFO.
BigGSFO From United States of America, joined Jun 2005, 2581 posts, RR: 7 Reply 54, posted (2 years 10 months 2 weeks 1 day 18 hours ago) and read 4014 times:
Quoting Hatbutton (Reply 51): His intentions show how determined he is to make VX work.
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? It's made him and his investors a lot of money over the years and has built the Virgin name into a global brand.
If the US DOT doesn't like it or feels he isn't in compliance, they will shut them down. Simple as that. We may or may not like the way SRB conducts his affairs, but the truth be told, he has made a lot of money doing what he does. There are plenty of people who won't patronize them and that is fine. There are those who will.
FRNT787 From United States of America, joined Sep 2007, 1225 posts, RR: 18 Reply 55, posted (2 years 10 months 2 weeks 1 day 18 hours ago) and read 3972 times:
Quoting Atomsareenough (Reply 10): Yeah, you hate them and wish they'd go away, we get it.
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 numbers have not been good at all, and I would be very wary about investing much, if any into this airline. They may have a different product, but that will not be enough to sustain them. It seems to me they are entering very competitive routes at either competitive or protected airports. It will be quite hard for them to make a sustained profit with that strategy.
"We have a right to fail, because failure makes us grow" --Glenn Beck
Hatbutton From United States of America, joined Mar 2005, 1379 posts, RR: 16 Reply 56, posted (2 years 10 months 2 weeks 1 day 18 hours ago) and read 3941 times:
Quoting BigGSFO (Reply 54): 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? It's made him and his investors a lot of money over the years and has built the Virgin name into a global brand.
If the US DOT doesn't like it or feels he isn't in compliance, they will shut them down. Simple as that. We may or may not like the way SRB conducts his affairs, but the truth be told, he has made a lot of money doing what he does. There are plenty of people who won't patronize them and that is fine. There are those who will.
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 investor that wants the laws changed. Whether good or bad, I think that yes, VX is under more scrutiny because it is a Virgin name and because SRB backs it so publicly.
Atomsareenough From United States of America, joined Feb 2008, 543 posts, RR: 2 Reply 57, posted (2 years 10 months 2 weeks 1 day 18 hours ago) and read 3884 times:
Quoting FRNT787 (Reply 55): Can no one say anything negative without hating something? This isnt an against us, or with us issue I hope...
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 members, probably in large part people who are in some way affiliated with other airlines, who feel compelled to make disparaging comments about VX whenever the topic comes up, in almost a Pavlovian type of response. Maybe MaverickM11 isn't as bad as some of the others, but I do recall seeing him make a number of unnecessarily, or gleefully negative comments. Maybe I'm being unfair to him though. If I'm wrong, I'm sorry.
BigGSFO From United States of America, joined Jun 2005, 2581 posts, RR: 7 Reply 58, posted (2 years 10 months 2 weeks 1 day 18 hours ago) and read 3832 times:
Quoting Hatbutton (Reply 56): 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 investor that wants the laws changed. Whether good or bad, I think that yes, VX is under more scrutiny because it is a Virgin name and because SRB backs it so publicly.
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 once SRB retires/dies/blasts into outer space remains to be seen. Many times the successor fails in generating the same type of buzz and investor interest as the "superstar."
EA CO AS From United States of America, joined Nov 2001, 11863 posts, RR: 67 Reply 59, posted (2 years 10 months 2 weeks 1 day 17 hours ago) and read 3802 times:
Alaska Airlines, which competes with Virgin America on routes to Seattle and other west coast cities, has questioned the carrier’s “US citizenship†and petitioned transport regulators in February to investigate its ownership structure. Federal laws cap foreign ownership of domestic airlines at 25 per cent.
“This is a meritless petition,†Virgin America said at the time. “Nothing has changed in our ownership structure, which was approved by the DoT.
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?
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan
Aviators99 From United States of America, joined May 2008, 430 posts, RR: 0 Reply 60, posted (2 years 10 months 2 weeks 1 day 11 hours ago) and read 3217 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. This is now a proposal that will allow the original investors to give up their control, as they wish to do.
DocLightning From United States of America, joined Nov 2005, 13994 posts, RR: 55 Reply 61, posted (2 years 10 months 2 weeks 1 day 10 hours ago) and read 3150 times:
Quoting MAH4546 (Reply 21):
Virgin America has done a great job establishing a name for itself, and it has a ways to go, but just like JetBlue has built huge loyalty, so can Virgin America.
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 considered a VX credit card, but it just won't take me enough places yet. But when I fly, I try to fly VX because they have a good product. IMHO, they are the ONLY way to get to JFK from SFO.
Aviators99 From United States of America, joined May 2008, 430 posts, RR: 0 Reply 62, posted (2 years 10 months 2 weeks 1 day 5 hours ago) and read 3010 times:
Quoting DocLightning (Reply 61): The question is: with such similar products, is there room for both? The only real difference is that B6 doesn't have F class.
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 having (real) WiFi fleetwide makes a big difference to me. It happens that F class makes an even bigger difference to me, but I'm in the minority.
That being said, I do not think VX would comete well against B6, and I think they should not take them on directly. B6 has more seat pitch in Y, and their satellite TV works much better. I also think there's substatial overlap in their customers.
Murchmo From United States of America, joined Sep 2005, 146 posts, RR: 0 Reply 63, posted (2 years 10 months 2 weeks 7 hours ago) and read 2792 times:
Quoting Slcdeltarumd11 (Reply 47): 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.
they are much more common, but...
Quoting MAH4546 (Reply 50): irgin America is a full-service, 2-class airline. And the best one in the U.S., IMO, in terms of it.
exactly.
Quoting MAH4546 (Reply 50): Virgin America has incredibly strong public awareness, especially on the West Coast.
Got that right. Everyone i know who has flown it is raving. I live in LA and people keep stating that they've changed to VX. I think most people in this market are used to WN, AS, UA and their Regionals...VX is much superior! I grew up in Seattle so i fly a lot on this target market and have been ultra biased to Alaska. 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.
Quoting UAL777 (Reply 37): Their wages apply downward pressure on everyone else's wages. Their pilots are flying for darn near RJ wages.
Doesn't show. I talk to the pilots every-time. They seem happy to work there...and i've met some very disgruntled pilots.
You are correct though, they need to get there name out more and create some buzz nationwide.
CGKings317 From Canada, joined Nov 2005, 284 posts, RR: 8 Reply 64, posted (2 years 10 months 2 weeks 7 hours ago) and read 2767 times:
AIRLINERS.NET CREW CHAT OPERATOR
Quoting MAH4546 (Reply 50): Virgin America has incredibly strong public awareness, especially on the West Coast.
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 great airline for those that are lucky enough to live in a market they serve. However the vast majority of this country does not live in a VX city. In order to expand their base of travelers, they need to establish presence in other major cities that currently do not see VX. If they cannot yet get ORD or EWR, they should go for MIA, PDX, AUS and the like.
~CGKings317
I love ✈ & volcanoes but the 2 of them dont get along, just ask KLM867 & PH-BFC
Murchmo From United States of America, joined Sep 2005, 146 posts, RR: 0 Reply 65, posted (2 years 10 months 2 weeks 6 hours ago) and read 2732 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 of America, joined Nov 2001, 11863 posts, RR: 67 Reply 66, posted (2 years 10 months 2 weeks 5 hours ago) and read 2706 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 of America, joined Mar 2005, 1379 posts, RR: 16 Reply 67, posted (2 years 10 months 1 week 6 days 21 hours ago) and read 2572 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.
STT757 From United States of America, joined Mar 2000, 15273 posts, RR: 55 Reply 68, posted (2 years 10 months 1 week 6 days 20 hours ago) and read 2520 times:
Quoting MAH4546 (Reply 50): Virgin America has incredibly strong public awareness, especially on the West Coast.
Quoting Slcdeltarumd11 (Reply 47): I live in NYC and most 99.56% of people have no idea what virgin america is.
I agree with Slc here, VX has no brand awareness what so ever in the NYC market. Or the entire Northeast for that matter, it's all Jetblue.
Lightsaber From United States of America, joined Jan 2005, 8506 posts, RR: 100 Reply 69, posted (2 years 10 months 1 week 6 days 20 hours ago) and read 2485 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
CGKings317 From Canada, joined Nov 2005, 284 posts, RR: 8 Reply 70, posted (2 years 10 months 1 week 6 days 19 hours ago) and read 2437 times:
AIRLINERS.NET CREW CHAT OPERATOR
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 ✈ & volcanoes but the 2 of them dont get along, just ask KLM867 & PH-BFC
Hatbutton From United States of America, joined Mar 2005, 1379 posts, RR: 16 Reply 71, posted (2 years 10 months 1 week 6 days 18 hours ago) and read 2401 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 of America, joined Jan 2009, 1015 posts, RR: 1 Reply 72, posted (2 years 10 months 1 week 6 days 13 hours ago) and read 2270 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?
ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co. or Airt
EA CO AS From United States of America, joined Nov 2001, 11863 posts, RR: 67 Reply 73, posted (2 years 10 months 1 week 6 days 13 hours ago) and read 2252 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, 1592 posts, RR: 3 Reply 74, posted (2 years 10 months 1 week 6 days 12 hours ago) and read 2190 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....
Lightsaber From United States of America, joined Jan 2005, 8506 posts, RR: 100 Reply 75, posted (2 years 10 months 1 week 6 days 9 hours ago) and read 2056 times:
Quoting EA CO AS (Reply 73): I don't believe the 'blue-collar set' is their target audience.
Hence why I posted "They have good brand awareness among their target markets" first.
Quoting UA772IAD (Reply 74): Also their ads don't suggest that they are a LCC, but an alternative to the monotonous....
MaverickM11 From United States of America, joined Apr 2000, 14246 posts, RR: 51 Reply 76, posted (2 years 10 months 1 week 6 days 8 hours ago) and read 2015 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....
BMI727 From United States of America, joined Feb 2009, 11535 posts, RR: 27 Reply 77, posted (2 years 10 months 1 week 6 days 7 hours ago) and read 1991 times:
EA CO AS From United States of America, joined Nov 2001, 11863 posts, RR: 67 Reply 78, posted (2 years 10 months 1 week 6 days 6 hours ago) and read 1947 times:
AirplaneBoy From United States of America, joined May 2004, 529 posts, RR: 13 Reply 79, posted (2 years 10 months 1 week 6 days 5 hours ago) and read 1908 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 of America, joined Apr 2000, 14246 posts, RR: 51 Reply 81, posted (2 years 10 months 1 week 5 days 23 hours ago) and read 1737 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 of America, joined Jul 2004, 2748 posts, RR: 45 Reply 82, posted (2 years 10 months 1 week 5 days 22 hours ago) and read 1697 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 of America, joined Jul 2008, 1983 posts, RR: 0 Reply 83, posted (2 years 10 months 1 week 5 days 22 hours ago) and read 1688 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 of America, joined May 2008, 430 posts, RR: 0 Reply 85, posted (2 years 10 months 1 week 5 days 19 hours ago) and read 1534 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 of America, joined Nov 2001, 11863 posts, RR: 67 Reply 86, posted (2 years 10 months 1 week 5 days 15 hours ago) and read 1416 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
MaverickM11 From United States of America, joined Apr 2000, 14246 posts, RR: 51 Reply 87, posted (2 years 10 months 1 week 5 days 15 hours ago) and read 1389 times:
Quoting EA CO AS (Reply 86): Your statement actually reinforces my point, though - when you're running what is essentially a full operation
BMI727 From United States of America, joined Feb 2009, 11535 posts, RR: 27 Reply 88, posted (2 years 10 months 1 week 5 days 12 hours ago) and read 1301 times:
Quoting Aviators99 (Reply 85): I don't agree with this, as the LF numbers seem pretty good to me.
This is the mindset that launches careers and destroys airlines.
LF does not equal profit. Sell all of your tickets for $1 and you will have a full plane and a bankrupt airline.
Why do Aerospace Engineering students have to turn things in on time?
Aviators99 From United States of America, joined May 2008, 430 posts, RR: 0 Reply 89, posted (2 years 10 months 1 week 5 days 8 hours ago) and read 1225 times:
Quoting BMI727 (Reply 88): This is the mindset that launches careers and destroys airlines.
LF does not equal profit. Sell all of your tickets for $1 and you will have a full plane and a bankrupt airline.
Thanks for quoting me out of context. Let me re-quote the part I was responding to:
Quoting CO AS EA:
Problem is, they're not driving enough their way
and my response was that LF are high. I made no claim about anything to do with profit.
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From United States of America, joined May 2000, 18914 posts, 
From New Zealand, joined Jul 2000, 2253 posts, 
From Sweden, joined Jan 2001, 30434 posts, 
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 exploitation.
From Canada, joined Nov 2005, 284 posts, 
 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 much wrangelling, allowing them to expand more seamlessly without the hoops and obstacles ORD and EWR present. AUS has been mentioned. PDX is another candidate that fits VX's clientele. I read somewhere that PHX and AZA are battling it out to woo VX to set up shop at their respected airports.
From Barbados, joined Sep 2008, 15 posts, 
From Australia, joined Jul 2004, 1592 posts, 
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