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Virgin America Post Q2 Loss - $21.7mil Net  
User currently offlineLAXintl From United States of America, joined May 2000, 26131 posts, RR: 50
Posted (3 years 3 months 4 days 1 hour ago) and read 4884 times:

Operating loss was $6.0mil mostly on back of added $5.6mil in fuel expenses during the quarter, while net loss was driven by $15.7Mil in “other” expenses including $7.2mil fuel hedge loss.

Traffic statistics:
ASM: +30.1%
Load Factor: 82.9%
Yield: 12.17
RASM: 10.97 +12%
CASM: 11.21 +8%

Ending cash $53mil of which $26mil unrestricted.

Company says its seeing “significant” year-over-year increases in booking and average fares.
Plans fleet growth from 38 at the end of the 2nd quarter to 46 by end of 2011 and 52 in 2012.


Press release:
http://finance.yahoo.com/news/Virgin...nd-prnews-2664148012.html?x=0&.v=1

[Edited 2011-09-16 10:55:10]


From the desert to the sea, to all of Southern California
17 replies: All unread, jump to last
 
User currently offlineusdcaguy From United States of America, joined Jan 2004, 1005 posts, RR: 2
Reply 1, posted (3 years 3 months 4 days 1 hour ago) and read 4823 times:

Does not seem bad for such a young carrier, but I would hope CASM would improve by year end. Curious to know if the new routes prove to be as profitable as the "mature" ones they discuss in the article.

User currently offlineNutsaboutplanes From United States of America, joined Jul 2010, 510 posts, RR: 8
Reply 2, posted (3 years 3 months 4 days ago) and read 4581 times:

Now we just have to see what they do with all of those shiny new airplanes that will be rolling out of the factory in the next 18-24 months.


American Airlines, US Airways, Alaska Airlines, Northwest Airlines, America West Airlines, USAFR
User currently offlineslcdeltarumd11 From United States of America, joined Jan 2004, 3637 posts, RR: 0
Reply 3, posted (3 years 3 months 3 days 23 hours ago) and read 4437 times:

Yes virgin america has alot of planes soon. Lets see if that helps or hurts them. They are filling seats and getting a fan base so i think in LAX and SFO they will be able to add new markets. DEN or EGE seem like great markets for them IMHO

anyone know how DFW is doing? AA has an all out attack out on them now


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17822 posts, RR: 46
Reply 4, posted (3 years 3 months 3 days 23 hours ago) and read 4432 times:

Operating margin down YOY for both the quarter and a whole point for the half year. I think everyone else is up? Also CASM ex fuel is up? Yeesh.


E pur si muove -Galileo
User currently offlineScottB From United States of America, joined Jul 2000, 6825 posts, RR: 32
Reply 5, posted (3 years 3 months 3 days 22 hours ago) and read 4302 times:

Quoting MaverickM11 (Reply 4):
I think everyone else is up?

JBLU was down, but that was down from +11% to +8%. LUV was down, too, but they still had operating income over $200 million for the quarter.

Quoting Nutsaboutplanes (Reply 2):
Now we just have to see what they do with all of those shiny new airplanes that will be rolling out of the factory in the next 18-24 months.

Yep. They've already picked the low-hanging fruit from LAX & SFO.


User currently offlineslcdeltarumd11 From United States of America, joined Jan 2004, 3637 posts, RR: 0
Reply 6, posted (3 years 3 months 3 days 22 hours ago) and read 4145 times:

Virgin America has an amazing product. I wondering if they would be better off putting in an extra row of first class seats though?

I bet almost everyone on here is interested to know where they add these planes to? SFO was suppose to be the main focus but LAX has just been so good to them we saw them keep adding to there as well. Will they focus on the joint effort or focus on LAX or SFO next? JFK really could use a SAN flight and another LAS in peak season if they can pull it off.

Anyone think their gonna be crazy and try a ski destination?


User currently offlinelightsaber From United States of America, joined Jan 2005, 13520 posts, RR: 100
Reply 7, posted (3 years 3 months 3 days 21 hours ago) and read 4065 times:
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Quoting usdcaguy (Reply 1):
Does not seem bad for such a young carrier,

Not to bad. But like B6, they need to perform strategic changes to improve CASM. e.g., like B6's code sharing with VS.   

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineRamblinMan From United States of America, joined Oct 2010, 1138 posts, RR: 1
Reply 8, posted (3 years 3 months 3 days 20 hours ago) and read 3894 times:

Jeez I wish they could have just one profitable quarter already. Really wish them the best.

Load factor is healthy...now hopefully they can drive up the fares little by little and get that RASM where it needs to be.


User currently offlineSTT757 From United States of America, joined Mar 2000, 16907 posts, RR: 51
Reply 9, posted (3 years 3 months 3 days 5 hours ago) and read 3488 times:

VX has been itching to get into EWR, I don't know where they could come up with the slots but EWR-SFO 3x daily and EWR-LAX 3x daily would be hugely successful. And it would give UA some competition.


Eastern Air lines flt # 701, EWR-MCO Boeing 757
User currently offlinessublyme From United States of America, joined Dec 2008, 517 posts, RR: 0
Reply 10, posted (3 years 3 months 3 days 3 hours ago) and read 3289 times:

Quoting slcdeltarumd11 (Reply 6):
SFO was suppose to be the main focus but LAX has just been so good to them we saw them keep adding to there as well.

I don't know if SFO was supposed to be main focus, if I remember correctly there was a heated battle between LA & SFO to headquater the airline. SFO won, but I think deep down VX always knew LA would be a major player in their route network.


User currently offlineLAXintl From United States of America, joined May 2000, 26131 posts, RR: 50
Reply 11, posted (3 years 3 months 3 days 3 hours ago) and read 3275 times:

Quoting ssublyme (Reply 10):
if I remember correctly there was a heated battle between LA & SFO to headquater the airline.

The battle for HQs was between Boston, New York, and San Francisco. It even mentioned in the below linked interview with the CEO.
Virgin America 4 Years Later - CEO Talks (by LAXintl Aug 24 2011 in Civil Aviation)

It true however that SF & LA flight activity has grown pretty much hand in hand, with VX occupying nice chunk of real estate at LAX which would allow significant further growth.



From the desert to the sea, to all of Southern California
User currently offlineapodino From United States of America, joined Apr 2005, 4317 posts, RR: 6
Reply 12, posted (3 years 3 months 3 days 3 hours ago) and read 3218 times:

Quoting slcdeltarumd11 (Reply 3):
DEN or EGE seem like great markets for them IMHO

EGE is highly unlikely. In addition to being a very seasonal destination, I do not think the A319 can actually operate into EGE without some limits. There is a reason all the major carriers flying up there use 757's, and it isn't for capacity.

I am not sure if the Burlingame HQ is a benefit or a deterrent. For one thing the cost of living in SFO is among the highest in the nation, which will make it tough long term for VX to attract good talent to HQ. Secondly the CA tax burden is among the highest in the nation, and with Brown in office it isn't going to get lower. Yes it is near a major city and a city known as high yielding, but you have to give employees incentives to want to move there, and for what VX would have to pay to attract good people there in HQ, I am not sure its enough. When you look at the following list and see where everyone else is HQ, you see what VX is up against.

Dallas/Ft. Worth - American and Southwest
Chicago - United
Phoenix - Usairways (SOC is in Pittsburgh though, still not that high)
Atlanta - Delta
Seattle - Alaska
Ft. Lauderdale - Spirit
New York - JetBlue

WIth the exception of JetBlue, every one of those companies is in a city where the cost of living is significantly lower tha VX, plus there are still lingering questions about their long term viability. Yes tax incentives are great, but they don't mean anything if by taking advantage of them you have a hard time attracting people to work for your company because you can't pay enough for where you are based. JetBlue is having this very same issue on the other side of the country in New York, and I know people who tried to make it work but couldn't because the cost of living is so darn high there. (Dispatchers actually have crash pads and commute because its so high). As I said, I know the tax incentives and closeness to big financial districts are very attractive to these guys, but there are so many other things the beancounters can't account for, which nullifies a lot of these other benefits that seem attractive at first glance.


User currently offlineusdcaguy From United States of America, joined Jan 2004, 1005 posts, RR: 2
Reply 13, posted (3 years 3 months 2 days 21 hours ago) and read 2975 times:

Quoting apodino (Reply 12):
Atlanta - Delta

I'm not sure if cities such as Atlanta still attract the major talent these days. With its major crime, poverty and generally crappy infrastructure, I find the place pretty gross, although it is much cheaper to live in than SFO. If I were a graduate of a major business school, I'd pick SFO any day of the week over places like ATL or DFW.

That said, I know that US had a generally dissatisfied employee base in headquarters at DCA. The city is wonderful and many people working in Crystal City were young and smart, but the fact that the company never paid enough to live there did not encourage one to stay too long (although the airline did have many longtime employees who loved the benefits). I still think that having a headquarters in SFO may be a catalyst that will help VX succeed. Even if its staff does not stay long, it will still attract those looking to live in a liberal, interesting city full of smart people. My guess is that those that try will be young risk-takers that will strive to make it work and enjoy themselves along the way. That may be a better pool of candidates to attract than the usual bunch of suburbanites.


User currently offlineAtlwest1 From United States of America, joined Jan 2009, 1046 posts, RR: 1
Reply 14, posted (3 years 3 months 2 days 20 hours ago) and read 2891 times:

Quoting usdcaguy (Reply 13):
I'm not sure if cities such as Atlanta still attract the major talent these days. With its major crime, poverty and generally crappy infrastructure, I find the place pretty gross, although it is much cheaper to live in than SFO. If I were a graduate of a major business school, I'd pick SFO any day of the week over places like ATL or DFW

Atlanta's crime isnt near as bad as some other places and the poverty level in ATlanta once again isnt near as bad as some places. Apparently you havent been to the same city I have lived in since 91 if thats your conclusion. Id rather live in a up and coming city where for the cost of a home in SFO I can have something 5 times larger and cheaper to maintain. Gross isnt the best adjective.

In this economy most cities are having a harder time attracting talent because companies are seldom hiring from the outside. Rather they are combining positions and pulling from inside. But if your a graduate from a top school and shunned a city with regional hq and hq's for some of the most well know companies in the world then perhaps work isnt seriously what that person is looking for.



ALL views, opinions expressed are mine ONLY and are NOT representative of those shared by Southwest Airlines Co. or Airt
User currently offlineFlyguy89 From United States of America, joined Feb 2009, 2000 posts, RR: 21
Reply 15, posted (3 years 3 months 2 days 20 hours ago) and read 2873 times:

Quoting usdcaguy (Reply 13):
I'm not sure if cities such as Atlanta still attract the major talent these days.

It's really disingenuous and slightly offensive to make that kind of generalization. It's cities like Atlanta, Dallas, Houston, Austin, Charlotte, Oklahoma City, Omaha, Kansas City, San Antonio...etc that ARE attracting the major talent for one simple reason...they're some of the few places in the country that are experiencing growth. Most business graduates go wherever there's opportunity for them, and living in a liberal interesting city full of smart people will do them no good when all those smart people don't have jobs considering both California and San Francisco's staggering unemployment rates and high cost of living. Speaking from the view-point of an impending business college grad, sure it would be cool if I got a decent paying job in LA or San Francisco, but they aren't particularly rife with opportunity for me and my fellow experience-hungry grads, and have infamously high tax-burdens and high costs of living. All of the Midwestern and sunbelt cities I mentioned above are both growing, dynamic, and interesting cities in their own right...oh and those cities are full of smart people too  


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17822 posts, RR: 46
Reply 16, posted (3 years 3 months 2 days 19 hours ago) and read 2713 times:

This HQ location discussion really has nothing to do with nothing

Quoting LAXintl (Reply 11):
It true however that SF & LA flight activity has grown pretty much hand in hand, with VX occupying nice chunk of real estate at LAX which would allow significant further growth.

Significant growth in LAX is not going to help VX on the yield side



E pur si muove -Galileo
User currently offlineslcdeltarumd11 From United States of America, joined Jan 2004, 3637 posts, RR: 0
Reply 17, posted (3 years 3 months 2 days 17 hours ago) and read 2577 times:

For EWR it would probably make more sense to offer 2 or 3x a day just to one city for frequency and business when competing head to head against United if they could get some slots. The merger made Southwest the "lucky" winner of quite a few EWR slots and all of them!

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