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VX Mulling IPO In Next 12-24 Months  
User currently offlinewrldtvlr From United States of America, joined Jan 2012, 38 posts, RR: 0
Posted (2 years 4 months 3 weeks 4 days 11 hours ago) and read 2134 times:

http://finance.yahoo.com/news/virgin...america-aims-ipo-12-085659512.html

My question is, why? Airline stocks seem to be a good way of throwing money away, so why would anyone want to invest money in them?

19 replies: All unread, jump to last
 
User currently offlinerojo From Spain, joined Sep 2000, 2451 posts, RR: 9
Reply 1, posted (2 years 4 months 3 weeks 4 days 10 hours ago) and read 2108 times:

IPO's are a way for investors to cash out and/or a way to raise money to expand / finance growth that will bring more revenues to the company.

User currently onlineBMI727 From United States of America, joined Feb 2009, 15739 posts, RR: 27
Reply 2, posted (2 years 4 months 3 weeks 4 days 9 hours ago) and read 2000 times:

The way I see it you could read this as good or bad news. Either it's good because they are getting really close to profitability and are looking for expansion capital, or bad because they are bleeding money and running out of private investors willing to throw more money on the table.


Why do Aerospace Engineering students have to turn things in on time?
User currently offlinePHXA340 From United States of America, joined Mar 2012, 890 posts, RR: 1
Reply 3, posted (2 years 4 months 3 weeks 4 days 9 hours ago) and read 1963 times:

Quoting BMI727 (Reply 2):
The way I see it you could read this as good or bad news. Either it's good because they are getting really close to profitability and are looking for expansion capital, or bad because they are bleeding money and running out of private investors willing to throw more money on the table.

Very good point. To add on , I think it is a good thing. VX has been very close to profitability for some time, however their lack of a large viable network has hurt them (in addition to high fuel prices). The IPO can help them fund new plane purchases as well as financing for new routes. If VX can keep expanding their network they will get more loyal fliers that use them exclusively. With that being said , VX needs to do something sooner or later to get a profit , even if this is SRB's pet project (not wholly owned I know), at the end of day this is still an investment and a bad investment needs to be pulled.


User currently offlineenilria From Canada, joined Feb 2008, 7180 posts, RR: 13
Reply 4, posted (2 years 4 months 3 weeks 4 days 9 hours ago) and read 1957 times:

Quoting BMI727 (Reply 2):

The way I see it you could read this as good or bad news. Either it's good because they are getting really close to profitability and are looking for expansion capital, or bad because they are bleeding money and running out of private investors willing to throw more money on the table.

Everybody said that NK was on the verge of Ch11 or even Ch7 and then they released their real results for the last several years and now they are an industry darling.

VX could have two goals: cashing out their investors or allowing the existing investors to inject more capital by increasing the number of American shareholders via the IPO. Hopefully, it is the latter.


User currently offlinePHXA340 From United States of America, joined Mar 2012, 890 posts, RR: 1
Reply 5, posted (2 years 4 months 3 weeks 4 days 9 hours ago) and read 1948 times:

Quoting enilria (Reply 4):
industry darling.

Industry darling from an investors perspective - oh yes. Industry darling from a customers perspective - not so much. Any airline that turns a profit this day and age though deserves praise in my book


User currently onlineMaverickM11 From United States of America, joined Apr 2000, 17495 posts, RR: 45
Reply 6, posted (2 years 4 months 3 weeks 4 days 9 hours ago) and read 1943 times:

Quoting enilria (Reply 4):
Everybody said that NK was on the verge of Ch11 or even Ch7 and then they released their real results for the last several years and now they are an industry darling.

That was based on their cash balance alone. Their operation was consistently at the very least treading water. VX, however, is similar only in terms of their continually razor thin cash balance--which is meaningless. I'm not sure how VX operational results go from industry-worst to anything remotely desirable for an IPO?



E pur si muove -Galileo
User currently offlinePHXA340 From United States of America, joined Mar 2012, 890 posts, RR: 1
Reply 7, posted (2 years 4 months 3 weeks 4 days 9 hours ago) and read 1925 times:

Quoting MaverickM11 (Reply 6):
I'm not sure how VX operational results go from industry-worst to anything remotely desirable for an IPO?

Sirius Satellite Radio has been bleeding cash since its inception yet had a decent IPO and is still treading water. Can I explain it - nope but maybe VX will be in the same boat.


User currently onlineBMI727 From United States of America, joined Feb 2009, 15739 posts, RR: 27
Reply 8, posted (2 years 4 months 3 weeks 4 days 9 hours ago) and read 1925 times:

Quoting enilria (Reply 4):

VX could have two goals: cashing out their investors or allowing the existing investors to inject more capital by increasing the number of American shareholders via the IPO

The wording in the article makes me thing that cashing out investors is a pretty major goal. The question is are they doing it because profits elude them and investors are getting antsy? Or are the investors trying to get out before the next war/terrorist attack/fuel spike that makes airlines an even worse investment than in good times?

The economy is generally beginning to improve, although fuel prices will likely rise as well. Basically from their startup until now they've been able to hide fairly well behind the recession, but if things aren't starting to look up now I can see how that might cause some grumbling among the investors.



Why do Aerospace Engineering students have to turn things in on time?
User currently offlineROSWELL41 From United States of America, joined Aug 2001, 781 posts, RR: 1
Reply 9, posted (2 years 4 months 3 weeks 4 days 9 hours ago) and read 1899 times:

VX needs profitability and a viable business plan before a successful IPO. Unfortunately, they offer a premium product but cannot command a premium price for it. In many markets, their prices are not appreciably greater than NK's, however, it is no secret that NK's CASM is the lowest in the industry. You cannot operate like that forever. If I were to play armchair CEO, I would encourage VX to acquire some A330's and begin to operate long haul services out of SFO. Perhaps they could gain the premium yield that they have so far been unable to command on their short to medium haul services.

User currently offlinestrfyr51 From United States of America, joined Apr 2012, 1211 posts, RR: 1
Reply 10, posted (2 years 4 months 3 weeks 4 days 8 hours ago) and read 1838 times:
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VX is running a good solid operation and should be a Hit then they go public,. Their upside potential could be tremendous were it not for Branson's Statements that all the other USA carriers service were so "Dire"... You'd all be Surprised at how much co-operation there is going on below the CEO level between the US Airlines. (and VX is ALL American I can Assure you) The Marketing "Dingbats" would have you believe this or that equipment and service is "superior" Fact is?? We ALL get our seats from the Same FEW (FAA Certified) vendors. We all get our MEALS from the same FEW vendors, The cabins are nearly Identical in many cases. +- a coffee maker and Video system. Below the Wing?? We swap parts like it's going out of Style
we Fix each other's airplanes on occasion, We ALL share tips and rumors about our operations and it's almost incestuous in nature beause we've ALL worked together at one time or other in Customer Service, maintenece flight OPS, and on the Ramp. We All KNOW VX will sooner or Later tie up to Virgin Australia on the West Coast or in Hawaii, and Virgin Atlantic on the East coast,. We also know that Branson will NEVER run XV from London. And as long as Alaska Aorlines is in business? (or Bill Ayers LIVES??) They'll be assured the VX stock is owned and run by Americans. Because they'd like nothing better than to shut them DOWN on foreign ownership rules..
VX is carving out a Niche for themselves and they're doing it Right!! The Hard way!! They've waited for slots and gate space at ORD, LAX, and now EWR. you don't hear them whining to the FAA or airports Unlike Branson who went WHINING to Congress about WHY he couldn't own and Run a Major US Airline.. Which ASSURED he would NEVER get the opportunity.. Shoulda kept his mouth shut! If VX goes public? They'll do WELL because they Should!


User currently offlinePHXA340 From United States of America, joined Mar 2012, 890 posts, RR: 1
Reply 11, posted (2 years 4 months 3 weeks 4 days 8 hours ago) and read 1816 times:

Quoting strfyr51 (Reply 10):
We ALL share tips and rumors about our operations and it's almost incestuous in nature beause we've ALL

Um ... no. They better not be , this is highly illegal if done at the corporate level. Collusion can land CEOs in jail.


User currently offlineLAXintl From United States of America, joined May 2000, 25357 posts, RR: 49
Reply 12, posted (2 years 4 months 3 weeks 4 days 8 hours ago) and read 1778 times:

First this news is not new. We had a discussion about an IPO in one of the previous earning threads.

Quoting ROSWELL41 (Reply 9):
VX needs profitability and a viable business plan before a successful IPO.

They do have a clear business plan that can be viable. And they have been on the verge of profitability. Matter of fact they have posted 2 quarters with operating profits now.

Quoting ROSWELL41 (Reply 9):
nfortunately, they offer a premium product but cannot command a premium price for it.

Suggest you look at some of the DOT data. Particularly on transcon's they do manage premiums over legacy players like AA, DL and UA depending on the market.

As an example - VX leads the pack with the highest average fare between LAX and Boston. In other markets VX manages to hold the #2 spot in a crowded field.



From the desert to the sea, to all of Southern California
User currently onlineMaverickM11 From United States of America, joined Apr 2000, 17495 posts, RR: 45
Reply 13, posted (2 years 4 months 3 weeks 4 days 7 hours ago) and read 1768 times:

Quoting LAXintl (Reply 12):
And they have been on the verge of profitability

The only thing they're on the verge of is burning through $1B of investor 'startup' money



E pur si muove -Galileo
User currently offlinestrfyr51 From United States of America, joined Apr 2012, 1211 posts, RR: 1
Reply 14, posted (2 years 4 months 3 weeks 4 days 7 hours ago) and read 1739 times:
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the corporate guys don't even BREATE the same AIR. we meet at conferences talk on the Phone call each other for Information about how we fix problems. Damn near Everybody at XV knows 22 or more people at UAL DAL,AMR FEDEX UPS ETC. Nobody is an island.. you HAVE to keep in touch to get yourself out of a Jam. when you're in one. that's why you'll likely see a VX airplane in a UAL hangar. at one time or other "Some Guy Knows a Guy". (just like in the mob)
That's how we get stuff DONE! Corporate?? PL-ease! Let me say thus! If you Don't keep in touch?? when your airplane is BROKE?? ( And they ALL break) Your passengers might be waiting a DAMN long time to get where they're going if you Don't have contacts.. that's how it works. Even at the Corporate Level. those guuys know stuff about the other airlnes cash positions Fuel positions, Passenger Counts ETC. They KNOW who's making money and who Isn't.
How they Know? I do Not Know. But via SEC reports, FAA reports, DOT reports?, We can tell what and Who's routes should making money and which are FLOPS. Late Arrivals, Delays, Cancelled flights Nechanical Interruptions etc. it's not hard to extrapilate the rest. American knew as MUCH about UAL's CH-11 as UAL did. That's WHY they're doing it NOW!! And they're TRYING to do it HOW UAL did it. (though the rules have changed somewhat) . I would Bet its the same in any other industry. Especially BANKING AND OIL!


User currently offlineLAXintl From United States of America, joined May 2000, 25357 posts, RR: 49
Reply 15, posted (2 years 4 months 3 weeks 4 days 6 hours ago) and read 1609 times:

Quoting MaverickM11 (Reply 13):
The only thing they're on the verge of is burning through $1B of investor 'startup' money

Nothing ventured, nothing gained.

Tons of people invest in a host of companies that have yet to return a dime back -- including many names we hold common as part of today's world like Twitter, GoGo, etc..



From the desert to the sea, to all of Southern California
User currently onlineVXCabinCrew From United States of America, joined Mar 2012, 58 posts, RR: 0
Reply 16, posted (2 years 4 months 3 weeks 4 days 1 hour ago) and read 1457 times:

Quoting LAXintl (Reply 15):
Quoting LAXintl (Reply 15):
Nothing ventured, nothing gained.

Tons of people invest in a host of companies that have yet to return a dime back -- including many names we hold common as part of today's world like Twitter, GoGo, etc..

I wouldn't pay much attention to anything MaverickM11 says. He has some delusional grudge against VX for some reason and gets a perverse kick out of bashing our company. We are some of the hardest-working FA's in the US, for some of the lowest pay, yet we LOVE our company and wouldn't want to be working anywhere else, and can't focus on the negative drivel coming from some of these bored armchair "CEO's".

Truth be told, despite a lack of consistent profitability, our company is on a strong trajectory towards long-tern viability and the idea of an IPO is a significant vote of confidence for the direction we're heading. I've had some of our investors on my flights and they are almost more positive and excited about things than we are. As long as we can keep the unions out and continue to build our network, we'll be in good shape.

What I would like to see VX do now is focus on connecting the other cities in our network to create a more business-traveler friendly route map. There are also some smaller cities that are ripe for the picking that I think we should go after, as opposed to jumping into every high-frequency, high-competition major city in the US.

Our mature markets are able to command quite a premium over the majors (i.e., BOS, IAD, FLL, JFK), but we have yet to see the newer markets (DFW, ORD) making quite the same splash profitability wise.


User currently offlineROSWELL41 From United States of America, joined Aug 2001, 781 posts, RR: 1
Reply 17, posted (2 years 4 months 3 weeks 4 days ago) and read 1385 times:

That's my whole point. VX product only works on longer stage lengths, hence my point about getting larger airframes and starting long haul.

User currently offlinemilemaster From United States of America, joined Mar 2001, 1065 posts, RR: 2
Reply 18, posted (2 years 4 months 3 weeks 3 days 22 hours ago) and read 1302 times:

Quoting VXCabinCrew (Reply 16):
Our mature markets are able to command quite a premium over the majors (i.e., BOS, IAD, FLL, JFK), but we have yet to see the newer markets (DFW, ORD) making quite the same splash profitability wise.

I thought DFW numbers were strong? I hope it improves...


User currently offlinestrfyr51 From United States of America, joined Apr 2012, 1211 posts, RR: 1
Reply 19, posted (2 years 4 months 3 weeks 3 days 22 hours ago) and read 1259 times:
Support Airliners.net - become a First Class Member!

Quoting VXCabinCrew (Reply 16):

You might be waiting a while @ DFW and ORD but! I KNOW it will pck up! just Hang in there.


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