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VX Reports 09Q4 And 2009 Results  
User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17773 posts, RR: 46
Posted (4 years 7 months 4 days 10 hours ago) and read 7021 times:

http://finance.yahoo.com/news/Virgin...rth-prnews-875955098.html?x=0&.v=1

"For full year 2009, Virgin America reported a $48 million operating loss on revenues of $548 million – a $140 million (or 74 percent) year-over-year improvement over 2008"


E pur si muove -Galileo
70 replies: All unread, showing first 25:
 
User currently offlineLAXintl From United States of America, joined May 2000, 26004 posts, RR: 50
Reply 1, posted (4 years 7 months 4 days 9 hours ago) and read 6852 times:

Good deal. $48mil is peanuts for a start up, and their operating margin has continued to improve.


From the desert to the sea, to all of Southern California
User currently onlineUnited1 From United States of America, joined Oct 2003, 6079 posts, RR: 9
Reply 2, posted (4 years 7 months 4 days 9 hours ago) and read 6829 times:

Quoting MaverickM11 (Thread starter):
$48 million operating loss on revenues of $548 million

That gives them a margin of -8.8% thats better then AAs -10%...not a bad job VX.



Semper Fi - PowerPoint makes us stupid.
User currently offlineSebring From Canada, joined Jul 2004, 1666 posts, RR: 14
Reply 3, posted (4 years 7 months 4 days 7 hours ago) and read 6568 times:

Or as a well-known ex-airline executive of a very successful discount airline posted in another forum:


The numbers speak for themselves. They always do.

4Q 2009

Operating Loss: $10.2m
Operating Margin: -6.7%
Net Margin: -12.2%
Load Factor: 84.3%
Break-even load factor: 89.9%

For the year, they lost $80.8 million with an operating margin of -8.8% and a net margin of -14.8%.

These numbers are getting into Western Pacific territory.

Like our friends at Porter, a good product, a hard working crew and all the awards in the world won't even buy you a cup of hot steaming jack squat.

The bottom line is the bottom line.


User currently offlineLAXintl From United States of America, joined May 2000, 26004 posts, RR: 50
Reply 4, posted (4 years 7 months 4 days 7 hours ago) and read 6496 times:

VX margins, are quite good when compared to true lemons like ExpressJet schedule service, FLYi, MAXjet etc, all which registered in excess of 100% negative operating margins.

VX performance today is as someone posted is better then what AA has managed this quarter.



From the desert to the sea, to all of Southern California
User currently offlineAirportugal310 From Tokelau, joined Apr 2004, 3678 posts, RR: 2
Reply 5, posted (4 years 7 months 4 days 7 hours ago) and read 6437 times:

Quoting LAXintl (Reply 4):
VX performance today is as someone posted is better then what AA has managed this quarter.

AA being a FAR larger airline, might I add.

Here's a curious question:

Would a large US airline with major international ops have its margin dragged down by its domestic flying? I believe I have read on here time and time again that international flights are usually the money makers of a company, so would that assertion even be partially correct?



I sell airplanes and airplane accessories
User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17773 posts, RR: 46
Reply 6, posted (4 years 7 months 4 days 7 hours ago) and read 6400 times:

Quoting United1 (Reply 2):
That gives them a margin of -8.8% thats better then AAs -10%...not a bad job VX.
Quoting LAXintl (Reply 4):
VX performance today is as someone posted is better then what AA has managed this quarter.

That's a bit of a low bar there.



E pur si muove -Galileo
User currently offlineMoltenRock From , joined Dec 1969, posts, RR:
Reply 7, posted (4 years 7 months 4 days 6 hours ago) and read 6260 times:

I fully expect VX to make a profit in 2010, as I'm sure its investor team is as well. VX's marketing team is a bright bunch that I have been impressed with.

User currently offlinewedgetail737 From United States of America, joined Aug 2003, 5945 posts, RR: 6
Reply 8, posted (4 years 7 months 4 days 5 hours ago) and read 6177 times:
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Quoting LAXintl (Reply 1):
Good deal. $48mil is peanuts for a start up, and their operating margin has continued to improve.

$48 Mil is peanuts for a start-up...Hmmm...VX has produced operating losses quarter after quarter except one that I remember where they made $3 Mil.

Losses are always detrimental to upstart carriers, even if they have deep pockets.

Quoting Sebring (Reply 3):
4Q 2009

Operating Loss: $10.2m
Operating Margin: -6.7%
Net Margin: -12.2%
Load Factor: 84.3%
Break-even load factor: 89.9%

You just can't survive on this kind of performance. Why is it that the likes of WN and AS are able to make a profit and VX can't?

Best of luck for VX...but get rid of your losses!!!

Quoting LAXintl (Reply 4):
VX performance today is as someone posted is better then what AA has managed this quarter.

Aren't you comparing apples with oranges here? A better comparison would be with Jetblue or even Air Tran.


User currently offlineMoltenRock From , joined Dec 1969, posts, RR:
Reply 9, posted (4 years 7 months 4 days 5 hours ago) and read 6133 times:

Quoting wedgetail737 (Reply 8):
Why is it that the likes of WN and AS are able to make a profit and VX can't?

Two words: Fixed Expenses.

As VX grows their CASM drops dramatically. Pretty simple really.


User currently offlineA330243 From United States of America, joined Jul 2007, 32 posts, RR: 0
Reply 10, posted (4 years 7 months 4 days 5 hours ago) and read 6082 times:

Quoting Airportugal310 (Reply 5):

AA being a FAR larger airline, might I add.

Here's a curious question:

Would a large US airline with major international ops have its margin dragged down by its domestic flying? I believe I have read on here time and time again that international flights are usually the money makers of a company, so would that assertion even be partially correct?

Seems to me that you only strenghtened LAXintl's argument with that latter statement. AA's overall margins are strengthened by their large and lucrative Latin America operations. A comparison of AA's margin on their domestic operations with VX's margins would be even more favorable to VX.

VX's margins will only improve as they scale up.

Quoting wedgetail737 (Reply 8):
Quoting Sebring (Reply 3):
4Q 2009

Operating Loss: $10.2m
Operating Margin: -6.7%
Net Margin: -12.2%
Load Factor: 84.3%
Break-even load factor: 89.9%

You just can't survive on this kind of performance. Why is it that the likes of WN and AS are able to make a profit and VX can't?

Best of luck for VX...but get rid of your losses!!!

WN and AS are much bigger airlines, that have had a strong West Coast presense for much longer. That simply is not a fair comparison.

I think the above results have to be put in some prespective. Few new businesses make money right out of the gate, if they do, then there is room for new entrants. VX are a relatively new operator, a new brand, entering in to a number of markets where the compeitition is deeply entrenched. If they produce similar results five years from now, then yes questions will have to be asked about their viability, but right now it is too soon to say one way or the other.


User currently offlineLAXintl From United States of America, joined May 2000, 26004 posts, RR: 50
Reply 11, posted (4 years 7 months 4 days 5 hours ago) and read 6032 times:

Quoting wedgetail737 (Reply 8):
Aren't you comparing apples with oranges here? A better comparison would be with Jetblue or even Air Tran.

Not really. A margin is a margin regardless of scale.
Comparing shear earnings or profit would not be comparable obviously, but looking at percentage margin eliminates scale variability.



From the desert to the sea, to all of Southern California
User currently offlinewedgetail737 From United States of America, joined Aug 2003, 5945 posts, RR: 6
Reply 12, posted (4 years 7 months 4 days ago) and read 5722 times:
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Quoting A330243 (Reply 10):
WN and AS are much bigger airlines, that have had a strong West Coast presense for much longer. That simply is not a fair comparison.

And AA is not a large airline? I still think the closest comparison is with Jetblue.

Quoting MoltenRock (Reply 9):
As VX grows their CASM drops dramatically. Pretty simple really.

At what rate does VX have to grow to finally hit critical mass and start pulling consistent profits? Seeing new service to MCO and YYZ is a start. How many more cities or frequency increases are we going to see to help with their CASM?


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17773 posts, RR: 46
Reply 13, posted (4 years 7 months 4 days ago) and read 5691 times:

Quoting wedgetail737 (Reply 12):
Seeing new service to MCO and YYZ is a start.

Those will lower their RASM as well, not only on stage length but also on fare.



E pur si muove -Galileo
User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5549 posts, RR: 7
Reply 14, posted (4 years 7 months 4 days ago) and read 5622 times:

Quoting wedgetail737 (Reply 8):
Losses are always detrimental to upstart carriers, even if they have deep pockets.

Without a balance sheet and a cash flow statement, it's impossible to tell how deep their pockets are. All they said was $22 million in unrestricted cash, not enough to cover another quarter of comparable losses.



I love long German words like 'Freundschaftsbezeigungen'.
User currently offlinenyc2theworld From United States of America, joined Mar 2007, 666 posts, RR: 0
Reply 15, posted (4 years 7 months 4 days ago) and read 5579 times:

Quoting MasseyBrown (Reply 14):
All they said was $22 million in unrestricted cash, not enough to cover another quarter of comparable losses.

And without the cash flow statement to show how much cash they actually lost, we have no idea how much of those losses brought their cash down and from what.



Always wonderers if this "last and final boarding call" is in fact THE last and final boarding call.
User currently offlinePlanesNTrains From United States of America, joined Feb 2005, 5685 posts, RR: 29
Reply 16, posted (4 years 7 months 3 days 21 hours ago) and read 5446 times:

Quoting Sebring (Reply 3):
a good product, a hard working crew and all the awards in the world won't even buy you a cup of hot steaming jack squat.

I think I'm gonna use that one at work tomorrow.  
Quoting MoltenRock (Reply 7):
I fully expect VX to make a profit in 2010, as I'm sure its investor team is as well. VX's marketing team is a bright bunch that I have been impressed with.

With fuel prices on the rise and the expenses associated with adding new staff and new cities, I myself would be somewhat more cautious than you.

Does anyone know what their losses are to-date?

Quoting MoltenRock (Reply 9):
As VX grows their CASM drops dramatically. Pretty simple really.

Perhaps a little too simple. CASM is one component. RASM is another. Obviously a lot goes into each of those, and there are reasons to be concerned about both.

-Dave



Next Trip: SEA-ABQ-SEA on Alaska
User currently offlineUALWN From Andorra, joined Jun 2009, 2889 posts, RR: 2
Reply 17, posted (4 years 7 months 3 days 18 hours ago) and read 5376 times:

Quoting Sebring (Reply 3):
The bottom line is the bottom line.

The bottom line in 2008 (first full year of operations) showed -50% operating margin. In 2009 it was -9%. Operating expenses in 2008 were $566M, in 2009 they were $596M (up 5%). Revenue in 2008 was $378M, in 2009 it was $548M (up 45%). There is an obvious trend.



AT7/111/146/Avro/CRJ/CR9/EMB/ERJ/E75/F50/100/L15/DC9/D10/M8X/717/727/737/747/757/767/777/AB6/310/319/320/321/330/340/380
User currently offlinebigGSFO From United States of America, joined Jun 2005, 2939 posts, RR: 6
Reply 18, posted (4 years 7 months 3 days 15 hours ago) and read 5192 times:

It's movement in the right direction.

Now of course I wonder what those other three cities will be.


User currently offlinewedgetail737 From United States of America, joined Aug 2003, 5945 posts, RR: 6
Reply 19, posted (4 years 7 months 3 days 14 hours ago) and read 5115 times:
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Not that I'm hoping for the demise of VX...far from it. We need some competition out west...especially up and down the coastline. It's not what it used to be. Negative margins and losses just sound like a stable airline...even if it an improvement.

User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17773 posts, RR: 46
Reply 20, posted (4 years 7 months 3 days 13 hours ago) and read 5062 times:

Quoting bigGSFO (Reply 18):
It's movement in the right direction.

There was no where to go but up.

Quoting wedgetail737 (Reply 12):
I still think the closest comparison is with Jetblue.

That's a really uncomfortable comparison for VX 
Quoting wedgetail737 (Reply 19):
We need some competition out west...

We do?



E pur si muove -Galileo
User currently offlineSuperDash From United States of America, joined Sep 2003, 574 posts, RR: 0
Reply 21, posted (4 years 7 months 3 days 13 hours ago) and read 4969 times:

Virgin's biggest problem in those numbers is one said 89% break-even load factor. You can fill 92% of your seats and BARELY make money. The bright side for Virgin (if there is one) is that Alaska indicated that they have seen strong RASM gains in West Coast markets. If that applies to San Fran and LA, it could mean Virgin is getting better quality revenue. But so far Virgin is just buying traffic and they are planning expansion this year. Toronto will not help their case. Time will tell, but these numbers add up to a business model that will be difficult to make money on and an even more difficult to make a return on the money.

User currently offlinebigGSFO From United States of America, joined Jun 2005, 2939 posts, RR: 6
Reply 22, posted (4 years 7 months 3 days 12 hours ago) and read 4917 times:

Quoting MaverickM11 (Reply 20):
There was no where to go but up.

They could have gone further down YOY.


User currently offlinePlanesNTrains From United States of America, joined Feb 2005, 5685 posts, RR: 29
Reply 23, posted (4 years 7 months 3 days 11 hours ago) and read 4841 times:

Quoting MaverickM11 (Reply 20):
Quoting wedgetail737 (Reply 19):
We need some competition out west...

We do?

Well, perhaps more "options". Living in SEA, if you are traveling to SoCal you have nonstop competition to LAX, but most other markets are connecting unless you fly AS. WN has yet to offer a single SEA/PDX-LA area nonstop. JetBlue has been an extremely weak option - almost to the point of being irrelevent - and VX is still just an LAX carrier.

There is competition, but not so many nonstop options. It's the double-edged sword of having AS as your hometown airline. I suppose when the "inevitable" DL takeover comes, things will break open a little bit. We'll see less nonstops to second and third tier markets, but more options to primary markets and perhaps a few secondary ones.

Why am I blathering...?

-Dave



Next Trip: SEA-ABQ-SEA on Alaska
User currently offlinewedgetail737 From United States of America, joined Aug 2003, 5945 posts, RR: 6
Reply 24, posted (4 years 7 months 3 days 9 hours ago) and read 4742 times:
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Quoting MaverickM11 (Reply 20):
We do?

Of course...think about all of the airlines we had flying up and down the west coast back in mid-1980's...we had PSA, AirCal, Alaska, Hughes Airwest/Republic, Western Airlines, United Airlines; and in smaller numbers, Wien Air Alaska, Frontier Airlines, Pan Am, Continental West/Continental and USAir. Look at late 1980's to early 1990's, you had Morris Air, Reno Air, Alaska, American (Air Cal takeover), USAir (PSA takeover), United, Delta; to a smaller extent America West, Royal West, Tri-Star Airlines, Grand Airways and Air 21.

Now we only have Southwest, Alaska/Horizon, a much smaller UA presence (RJ's replaced mainline); to a smaller extent Jetblue and Virgin America.


25 Post contains images MaverickM11 : OK, we need more competition so you can see more pretty tails or because airfares have started hitting three digits up and down the West Coast ? Seri
26 Post contains images PlanesNTrains : Cough*DELTA*Cough. SLC is still a west coast option, albeit an out-of-the-way one. Even PHX with US can work if needed. Were UA still as prolific as
27 aviators99 : Again, as time goes on and the capital expenses become paid for (startup costs), the required LF to break-even goes down. As I recall, when they star
28 PlanesNTrains : Well, when my wife flew Virgin America First Class SEA-LAX for about $250, it became quite clear that they were trying to buy customers. -Dave
29 Elevated : Sooo....it worked. What airline doesn't or hasn't, honestly. Speaking of being "clear." Sounds like the guy that was complaining about "too much" o/h
30 A330243 : You seem to be missing the point. Ofcourse AA is a large airline. That only strengthens the case that VX have reported strong results, relative to th
31 SuperDash : Assuming you have cash to pay down your debt. Also remember, new airplanes don't need heavy maintenance. As the years go on, those costs come home to
32 PlanesNTrains : Speaking of being too quick to assume... Who said I was complaining? I bought her the ticket. I was thrilled to have her flying Virgin America in Fir
33 surfandsnow : These airlines were founded during the regulated era, when all airlines eeked out profits thanks to cost-plus pricing policies. Of course, both did t
34 aviators99 : I don't agree that the only way their BE LF will go down is revenue improvement. CASM reduction also lowers the BE LF, and they have been consistentl
35 Elevated : It's simply your connotation when you referred to as the airline, "trying to buy customers." Call it what you wish with regards to "taking it persona
36 Post contains images PlanesNTrains : Which you seemed to agree with with your statement: So what's your gripe there? But I didn't criticize VX. It was just a simple observation about F c
37 MaverickM11 : The fact that a new airline with young employees, a young fleet, MX holiday, flying in the biggest markets in the country is posting results slightly
38 Knid : Embarrassing... for who VX, or AA?
39 surfandsnow : Yes, before B6 JFK was highly underutilized for most of the day. It's successes drove DL and AA to build up their own JFK ops to the very respectable
40 MaverickM11 : There were four carriers competing on JFKFLL when B6 started; now there are two. Yes but I wouldn't say it was sleepy by any means; in terms of depar
41 UALWN : Apparently, VX investors and analysts disagree with you. They are impressed by the results of a start-up that came to life during the very worst peri
42 MaverickM11 : Yeah, capacity in Q4 was up 42% but revenues were only up 29% while RASM dropped about 10%. Which ones? I think the investors have been bought off an
43 UALWN : I know I'm wasting my time but still. Capacity was up 42%, revenue was up by only 29%, but costs were up by only 17%. I repeat: capacity was up 42%,
44 MaverickM11 : That's what happens when you expand significantly and fill it with cheap traffic. I don't disagree that it's a huge improvement, but to look enviousl
45 PlanesNTrains : I am wondering if someone knows how much has been spent so far from start-up to today? Is it $100million? $300million? More? I only ask because it wo
46 XT6Wagon : I recall they had something like $400 million in debt before they even started.
47 UALWN : I don't think anybody is looking "enviously" at AA. Certainly not the VX folks. And yet I'm not going to apologize. It is plain for everybody to see
48 Post contains images EA CO AS : You mean disclosure of meaningful, detailed financial information?
49 MaverickM11 : A business plan that works?
50 PlanesNTrains : I didn't expect you to apologize. I just think it's wierd to be ridiculed - as an American, about something going on in America - by a non-American,
51 UALWN : I don't think I ridiculed anybody. And.... I happen to be an American citizen... I guess you know as well as I do that VX is not publicly traded, so
52 MaverickM11 : Perhaps by B6 you mean SX, because then you'd be right. Otherwise B6 was making money at the same stage, and the 9/11 attacks had just occurred no le
53 UALWN : No, I meant B6. I don't even know what SX is. B6 (an airline I love, by the way) was making money by its third year of operations, VX is predicted to
54 Post contains links MaverickM11 : Skybus B6 was making money before its first year was up, and continued to do so after 9/11. I greatly admire B6; VX, however, is a poor imitation. ht
55 RIDGID727 : Is VX immitating B6? Wherever did you come up with that diatribe?
56 Elevated : I got a great laugh out of that one as well since we have FC and offer food on demand in main cabin amongst other things. I guess that all changed la
57 Post contains images MaverickM11 : You're right. It's not immitating B6. It's closer to Maxjet, Eos, or Silverjet than anything. I was right about the "poor" part though .
58 UALWN : B6 lost money in 2000 and in 2001. Yes, they did make money in some quarters, just like VX did in the 3rd quarter of 2009. Uh? What does VX have in c
59 MaverickM11 : By 2002 Q1, B6 had five consecutive profitable quarters (less than two years after startup), and was the darling of Wall Street. VX is neither. They
60 RIDGID727 : Im sorry, but in your haste to negate everything Virgin America, you are failing badly. Try telling us what's wrong with you. instead of lambasting V
61 MaverickM11 : You want to try some facts there, chief?
62 RIDGID727 : Naw Peter, you know it all anyway.
63 UALWN : I stand by what I said: B6 lost money overall in 2001. VX can't be Wall St.'s darling because it is not publicly traded...
64 Post contains images MaverickM11 : But it had four consecutive profitable quarters We can revisit this conversation when VX does the same. B6 was getting incredible free publicity both
65 EA CO AS : *cough*Form 41*cough*
66 UALWN : Which, of course, they do provide. For your coughing ailment I'd recommend Fisherman's Friend Original Extra Strong. It works great for me. No need t
67 Elevated : Which brings me to....your point? Maybe we don't have the marketing budget (yet and don't ask for the number), but Twitter is has done amazingly well
68 MaverickM11 : Yeah about that Twitter... VA has 73,000 followers and B6 has 1,600,000. Lindsay Lohan has 500,000.
69 Elevated : It's cute that you follow Ms. Lohan, but holds no weight. So what you're point out, those 73,000 are more brand loyal than several-hundred thousands m
70 Post contains images MaverickM11 : Thanks, I was just trying to think of something else that initially showed promise but is now circling the drain. Based on? You're telling me that 10
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