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Virgin Atlantic £80.2 Million Annual Loss  
User currently offlineBlueShamu330s From UK - England, joined Sep 2001, 2789 posts, RR: 25
Posted (1 year 8 months 2 weeks 3 days 20 hours ago) and read 9067 times:

Virgin report an annual pre-tax operating loss of £80.2m

Steve Ridgway's report on the figures, "‘In an incredibly challenging market, we have managed to grow top line revenues and fly more customers than last year.

‘However, with the prevailing uncertainty in the economy, sky high fuel prices and a 25% hike in our air passenger duty fees, converting this sales growth into profit has not been possible.’

http://www.e-tid.com/higher-revenues-fail-to-boost-virgin/36962/

Press release: http://www.e-tid.com/wp-content/uplo...ginAtlanticAnnual-Results-2012.doc

Rgds

[Edited 2012-08-06 05:01:01]


So I drive a 4x4. So what?! Tax the a$$ off me for it...oh, you already have... :-(
33 replies: All unread, showing first 25:
 
User currently offlineFCAFLYBOY From United Kingdom, joined Nov 2006, 582 posts, RR: 0
Reply 1, posted (1 year 8 months 2 weeks 3 days 19 hours ago) and read 8800 times:

Ouch that has to hurt. Given IAG's £200M loss this is smaller, but then again VS is nowhere near the size
Of IAG so proportionately VS is perhaps racking up a much bigger loss?

Was this due to any one-off expenses?

My worry with VS is always what they have left in the bank. SRB may own part of them but the days of him pumping money at VS seem to be over.


User currently onlinesevenheavy From United Kingdom, joined Mar 2004, 1146 posts, RR: 10
Reply 2, posted (1 year 8 months 2 weeks 3 days 18 hours ago) and read 8657 times:

Quoting FCAFLYBOY (Reply 1):
Ouch that has to hurt. Given IAG's £200M loss this is smaller, but then again VS is nowhere near the size
Of IAG so proportionately VS is perhaps racking up a much bigger loss?

Was this due to any one-off expenses?

My worry with VS is always what they have left in the bank. SRB may own part of them but the days of him pumping money at VS seem to be over.

Its very difficult to compare BA and VS's financial performance. VS reports March-February (these figures are March2011-February 2012). BA is (I think) January-December.

BA actually made a profit in the last calendar year, but themselves lost well over £100m in the first 6 months of 2012. That doesnt include IB's far more significant losses which are IAG's fault, not BA's.

VS is in something of a transition at the moment. 10 new aircraft (in context thats 25% of its total fleet size), £55m being spent on refurbishing the leisure B744's, and A346's are being returned from lease. Whilst most of this is long term expenditure, there will be higher than usual costs during the transition period. (more aircraft than needed for the flying program, additional ferry flight costs, end of lease heavy mx checks etc.)

Cash isn't a problem. VS have plenty of unrestricted funds



So long 701, it was nice knowing you.
User currently offlinejumpjets From United Kingdom, joined Apr 2012, 703 posts, RR: 0
Reply 3, posted (1 year 8 months 2 weeks 3 days 17 hours ago) and read 8549 times:

Quoting sevenheavy (Reply 2):
BA actually made a profit in the last calendar year, but themselves lost well over £100m in the first 6 months of 2012. That doesnt include IB's far more significant losses which are IAG's fault, not BA's.

The IAG half yearly results say:

British Airways made an operating profit, after exceptional items, of €13 million in the half year to June 30, 2012 and Iberia made an operating loss of €263 million

This doesn't include 'other operating costs' which gives a total loss of 390million euros before tax and a 150million euro tax credit giving a loss after tax of 240million.


User currently offlineskipness1E From United Kingdom, joined Aug 2007, 3075 posts, RR: 1
Reply 4, posted (1 year 8 months 2 weeks 3 days 17 hours ago) and read 8433 times:

BA's potential is now strategically much greater as they have snapped up bmi already having the acceptable cost base of Mixed Fleet cabin crew already in place. Pain out of the way and job done, IAG now turn to Iberia for the same overhaul and pain. Virgin are still stuck out in a limb without the protection of an alliance or the strength of a proper stand alone.

User currently offlinestrfyr51 From United States of America, joined Apr 2012, 792 posts, RR: 0
Reply 5, posted (1 year 8 months 2 weeks 3 days 16 hours ago) and read 8284 times:
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the 25% passenger duty fee hike is what the problem might be, What the heck is all of that for?? It looks like the EU is going to tax everybody out of business. Is there THAT much going on at LHR that they NEED a 25% hikein passenger facility charges??

User currently offlineBongodog1964 From United Kingdom, joined Oct 2006, 3475 posts, RR: 3
Reply 6, posted (1 year 8 months 2 weeks 3 days 16 hours ago) and read 8222 times:

Quoting strfyr51 (Reply 5):
the 25% passenger duty fee hike is what the problem might be, What the heck is all of that for?? It looks like the EU is going to tax everybody out of business. Is there THAT much going on at LHR that they NEED a 25% hikein passenger facility charges??

The 25% increase is nothing to do with either the EU or LHR. Its an increase in the UK air passenger duty, money which flies directly into the treasury. The airlines bleat every time its increased, but it doesn't seem to stop people flying. Indeed VS flew more passengers than they did previously.


User currently offlinebueb0g From United Kingdom, joined Jul 2010, 623 posts, RR: 0
Reply 7, posted (1 year 8 months 2 weeks 3 days 10 hours ago) and read 6966 times:

Quoting strfyr51 (Reply 5):

the 25% passenger duty fee hike is what the problem might be, What the heck is all of that for?? It looks like the EU is going to tax everybody out of business.

Not EU regulations, this is a tax levied by the UK Government.



Roger roger, what's our vector, victor?
User currently offlineMax Q From United States of America, joined May 2001, 4072 posts, RR: 19
Reply 8, posted (1 year 8 months 2 weeks 3 days 10 hours ago) and read 6929 times:

I just don't see how they will survive as an independent entity, long term it seems impossible.


The best contribution to safety is a competent Pilot.
User currently offlinejumpjet From United Kingdom, joined Feb 2005, 270 posts, RR: 0
Reply 9, posted (1 year 8 months 2 weeks 2 days 22 hours ago) and read 4417 times:

So I guess that puts paid to ever seeing an A380 flying in VS colours does it? Is the order still alive or has it been shelved and I missed it?   

User currently offlineLHRFlyer From United Kingdom, joined Apr 2010, 800 posts, RR: 1
Reply 10, posted (1 year 8 months 2 weeks 2 days 21 hours ago) and read 4363 times:

If you compare it to the profit BA made over the same period before bmi it's a very bad result. The AA-BA joint venture is clearly hurting.

Virgin should be given credit for having got through some very tough times in the past but they need to do something.


User currently offlineanstar From United Kingdom, joined Nov 2003, 5080 posts, RR: 6
Reply 11, posted (1 year 8 months 2 weeks 2 days 21 hours ago) and read 4295 times:

Quoting LHRFlyer (Reply 10):
Virgin should be given credit for having got through some very tough times in the past but they need to do something.

Well they are investing alot in refitting their 747 fleet, new clubhouses, new product in all 3 cabins... so I guess the impact of those changes will be flowing through over the next 12-18 months.


User currently offlineslinky09 From United Kingdom, joined Jun 2009, 791 posts, RR: 0
Reply 12, posted (1 year 8 months 2 weeks 2 days 21 hours ago) and read 4225 times:

Compared to many airlines it's not an out of proportion loss, compared to IB and AF / KLM say. Yes BA is stronger but it is coming out of a period of investment whereas VS is right in the middle of it. I believe VS has made an annual loss only thrice in 28 years - not a bad record compared to some (e.g. BA thrice between 1996 and 2011 and we shouldn't mention many of the large US airlines ...) and having done so last year does not solely indicate whether VS has a strong (which I hope it will) or not future.

User currently offlineliverpoola380 From United Kingdom, joined Feb 2012, 194 posts, RR: 0
Reply 13, posted (1 year 8 months 2 weeks 2 days 21 hours ago) and read 4225 times:

I think Virgin is going through a bit of a renaissance at the minute and going back to its routes of beinga bit sazzy and re-enforicing the image it likes to portray of being 'Cool'

We know an alliance is on the cards this is a matter of when and not if.

I think there are going to be some further big changes and I look forward to seeing the future of Virgin.


User currently offlinejumpjet From United Kingdom, joined Feb 2005, 270 posts, RR: 0
Reply 14, posted (1 year 8 months 2 weeks 2 days 19 hours ago) and read 3935 times:

Quoting liverpoola380 (Reply 13):
I think Virgin is going through a bit of a renaissance at the minute and going back to its routes of beinga bit sazzy and re-enforicing the image it likes to portray of being 'Cool'

Totally agreed! When they started up all those years ago- that was their real unique selling point wasn't it? I used to deliberately choose VS because I identified with that ethos, as I imagine did a lot of others. My last flight with them in 2004 was a shambles, the cabin crew couldn't have cared less about us, so I made a point of NOT choosing them from that day onwards....



Quoting jumpjet (Reply 9):
So I guess that puts paid to ever seeing an A380 flying in VS colours does it? Is the order still alive or has it been shelved and I missed it?

So, what is happening with the A380 order????


User currently offlineskipness1E From United Kingdom, joined Aug 2007, 3075 posts, RR: 1
Reply 15, posted (1 year 8 months 2 weeks 2 days 18 hours ago) and read 3836 times:

They are trying to recapture a youthful exhuberance which is impossible to do once a trading organisation gets to be a certain size. The recent investment is very welcome but will only succeed in getting them back to where they should have stayed. SRB has said he sees little growth for VS from the UK although he blamed HMG's policy rather than the failings of the business. From a commercial perspective, it appears the business is being set up to be sold off. Status quo is not a sustainable option and there are many powerful people rather against VS in SkyTeam or STAR.

That leaves the sandpit and petro dollars. Organic growth in the UK has nowhere to go now BA just got much stronger. Had they made a serious offer for BMI well who knows, the fact they did not tells you a lot about underlying strength of the business.

[Edited 2012-08-07 07:01:33]

[Edited 2012-08-07 07:03:29]

User currently onlinesevenheavy From United Kingdom, joined Mar 2004, 1146 posts, RR: 10
Reply 16, posted (1 year 8 months 2 weeks 2 days 17 hours ago) and read 3758 times:

Quoting skipness1E (Reply 15):
That leaves the sandpit and petro dollars. Organic growth in the UK has nowhere to go now BA just got much stronger. Had they made a serious offer for BMI well who knows, the fact they did not tells you a lot about underlying strength of the business.

VS are sitting on a lot of cash ( I've seen their current cash position-dont forget they have been profitable for all but 3 of their 28 years) but a messy BMI aquisition would have taken a big chunk out of it. The issue was more around the relative high risk of buying up BMI as a carrier suffering huge losses and with a failing, unprofitable network. There was some doubt about how much BMI could offer VS, and in truth BA were better suited to absorb them. VS would still be left without a number of key short haul routes that had either been axed by BMI over the years, or were never there to start with.

The price VS offered was the value they put on the business. They werent willing to risk the underlying business, which as it currently stands has the ability to absorb a good deal of financial stress. Simple as that.

There is an element of the loss that is due to transitional costs while they dispose of older, less efficient aircraft and refurbish others, and introducing a new, twin engined aircraft to the fleet. They would clearly still have made a loss, but certainly not as big as it was.

Quoting skipness1E (Reply 15):
From a commercial perspective, it appears the business is being set up to be sold off. Status quo is not a sustainable option and there are many powerful people rather against VS in SkyTeam or STAR.

Could be. More likely is that they recognised that to be competitive they needed a better product and a mre efficient, flexible fleet. Considering that if VS were to be sold off a large chunk of the sale price would be for the LHR slots the kind of investment they are making doesnt make sense from an aquisition point of view. They are spending over £100m, for a buyer, where is the value in spending that kind of money on refurbishing a load of leased aircraft, and leasing another load of new ones? There is no way they would get anything close to a ROI



So long 701, it was nice knowing you.
User currently offlineslinky09 From United Kingdom, joined Jun 2009, 791 posts, RR: 0
Reply 17, posted (1 year 8 months 2 weeks 2 days 17 hours ago) and read 3734 times:

Quoting skipness1E (Reply 15):
Organic growth in the UK has nowhere to go now BA just got much stronger. Had they made a serious offer for BMI well who knows, the fact they did not tells you a lot about underlying strength of the business.

There are plenty of options for growth in the UK and as much as we might find VS's marketing spin sometimes disconcerting, HMG does have a noose around organic growth through its policies (or rather lack thereof, or rather there is a policy, it's "no"). Mixed mode runway use at LHR alone could create the space for organic growth. You can't lead with these comments without recognizing that the only way to grow at VS's home base is for a change in policy, or the injection of massive sums of money to buy slots.

As for BMI, perhaps VS offered a reasonable price have done its sums better than IAG and understanding how much cash would bleed to integrate it and turn it around. IMO IAG paid a premium for BMI, a premium born of a strategy for dominance at LHR. It's IAG's right, I am not criticizing that.

Quoting skipness1E (Reply 15):
many powerful people rather against VS in SkyTeam or STAR

Didn't SkyTeam actually invite VS to join?

Quoting skipness1E (Reply 15):
They are trying to recapture a youthful exhuberance which is impossible to do once a trading organisation gets to be a certain size.

No business can be what it was in its early days, granted, Facebook isn't, Goodle isn't, VS isn't ... but as for youthfulness you do certainly get a sense of some of that and yes the investments are good news.


User currently offlineavek00 From United States of America, joined Oct 2004, 4282 posts, RR: 20
Reply 18, posted (1 year 8 months 2 weeks 2 days 17 hours ago) and read 3691 times:

Quoting liverpoola380 (Reply 13):
We know an alliance is on the cards this is a matter of when and not if.

We don't know that membership in a global alliance is in the cards. In fact, the argument for introducing VS into an alliance grouping steadily weakens as the TATL JVs evolve such that every airline/alliance grouping that wants to fly from North America to London can now do so basically at-will during commercially viable times.

In the long term, the best outcome is a merger between VS and British Airways that creates a UK powerhouse.



Live life to the fullest.
User currently offlinemikey72 From United Kingdom, joined Oct 2009, 1780 posts, RR: 2
Reply 19, posted (1 year 8 months 2 weeks 2 days 16 hours ago) and read 3625 times:

Quoting avek00 (Reply 18):
In the long term, the best outcome is a merger between VS and British Airways that creates a UK powerhouse.

Oh blimey you're brave !

I've tried that one a few times and still got the scars to prove it.



Flying is like sex - I've never had all I wanted but occasionally I've had all I can stand.
User currently offlinevirgincrew From United Kingdom, joined Oct 2004, 419 posts, RR: 2
Reply 20, posted (1 year 8 months 2 weeks 2 days 16 hours ago) and read 3551 times:

Quoting mikey72 (Reply 19):
Oh blimey you're brave !

I've tried that one a few times and still got the scars to prove it.

Mikey, I am not saying a word lol

I agree with the comment that merging VS & BA would make a massive British Flag Carrier airline, but what for the flying public, we have had so much merger in the UK with airlines and it's the public that lose out. VS & BA offer very different & unique products to the airline market.

You just have to look at the charter market in the UK, it has halved in the last 10 years...

No-one likes seeing an airline lose money (well people on A.net do when it's VS    )

But VS are sitting on a lot of cash, as it's been said above - VS have been profitable for all but 3 of their 28 years .....

They are in the middle of their biggest transitional period, new onboard product & services, new aircraft & complete upgrade of their leisure fleet....

Quoting jumpjet (Reply 14):
So, what is happening with the A380 order????

The order is still in place....

Quoting anstar (Reply 11):
Well they are investing alot in refitting their 747 fleet, new clubhouses, new product in all 3 cabins... so I guess the impact of those changes will be flowing through over the next 12-18 months.

couldn't agree more - massive changes at VS and all for the better...

I personally think VS will join Star Alliance...



Hello Beautiful !!!
User currently offlinevirgincrew From United Kingdom, joined Oct 2004, 419 posts, RR: 2
Reply 21, posted (1 year 8 months 2 weeks 2 days 16 hours ago) and read 3521 times:

http://www.virgin-atlantic.com/en/gb/allaboutus/ourfleet/index.jsp

VS are due:

6 x A380's for delivery from 2015....

&

15 x 787's for delivery from 2014....



Hello Beautiful !!!
User currently offlinevirgincrew From United Kingdom, joined Oct 2004, 419 posts, RR: 2
Reply 22, posted (1 year 8 months 2 weeks 2 days 16 hours ago) and read 3508 times:

http://www.virgin-atlantic.com/gb/en...ss-releases/productinvestment.html

this press release from VS, hi-lights all the positives currently at VS...

some on them.....

2011/12 Full Year Group Performance
• Revenues increased by 3% to £2.74billion
• Airline passenger numbers increased by 2% to 5.4million
• Load Factor 78%
• Cargo revenue increased by 7% to £239.6million
• A pre-tax Group operating loss of £80.2million
• Strong cash position of £486.7million
• New Manchester to Las Vegas route launched
• Virgin Holidays doubled its retail network to 86 outlets, creating 160 new jobs

Virgin Atlantic’s £100m Upper Class product investment launched in February 2012 includes:

• New Upper Class cabin including new seat and bar
• New Upper Class menu and service
• New Clubhouse opened in New York JFK
• New Clubhouse in New York, Newark opening in November 2012



Hello Beautiful !!!
User currently offlineslinky09 From United Kingdom, joined Jun 2009, 791 posts, RR: 0
Reply 23, posted (1 year 8 months 2 weeks 2 days 14 hours ago) and read 3368 times:

Quoting avek00 (Reply 18):
We don't know that membership in a global alliance is in the cards. In fact, the argument for introducing VS into an alliance grouping steadily weakens as the TATL JVs evolve such that every airline/alliance grouping that wants to fly from North America to London can now do so basically at-will during commercially viable times.

Skyteam is still very weak transatlantic from the UK (which is still a much bigger market than continental Europe's countries) compared to OW and *A ... see my comment above.

Quoting avek00 (Reply 18):
In the long term, the best outcome is a merger between VS and British Airways that creates a UK powerhouse.

Ridiculous, monopolistic, poor for the traveller, etc. etc. Perhaps there should be the same in the US and DL, AA, and UA should merge ...

Quoting mikey72 (Reply 19):
Oh blimey you're brave !

Mikey, so are you!

Quoting virgincrew (Reply 20):
VS & BA offer very different & unique products to the airline market.

Exactly and if both can prosper in future years long may that choice be available.

Quoting virgincrew (Reply 20):
The order is still in place....

Oh. Here I digress from the pro-VS stance and ask you to join my sweepstake of 2015, 2016, 2017 ... never!


User currently offlineskipness1E From United Kingdom, joined Aug 2007, 3075 posts, RR: 1
Reply 24, posted (1 year 8 months 2 weeks 2 days 13 hours ago) and read 3312 times:

BA don't need VS to become a powerhouse, the only thing BA would ever want from VS would be slots and crew. Slinky09 I am not anti VS, however I am not a fanboy of anyone, alliance or airline. People on here pick a team then defend them to the hilt. So :

VS have pretty much done what they can in the UK, SRB has acknowledged this. They quite properly are right sizing their LHR operation and investing in product. In doing so they are defending a core market as the excellent news about the clubhouse shows. However they are not expanding at LHR, quite the opposite, they are entrenching, again a good call. It's no secret they're trying to sell a major stake. So 787s for A346s with the option of maybe an A388 or two...... However until they get a strategy that involved not being the meat in an alliance sandwich, then God help 'em.

Do you not find the sight of an aged billionaire with a semi naked hot girl at the Cancun party somewhat creepy? It doesn't work anymore.


25 LHRFlyer : I note they have not included comparators for the load factor or capacity growth which I think may be the nub of the issue. I'm sure Virgin's load fa
26 virgincrew : I must admitt, I can see the A380 order being swapped for a different aircraft... But I do believe that when the original order was made, their inten
27 slinky09 : I was at the Cancun party and no it wasn't creepy. It was a whole load of fun and one picture captures but 1 second of it. Going back to the discussi
28 adg737800 : I have yet to understand the logic of this one. Every travel organisation is seemingly trying to get out of a physical retail presence, yet Virgin is
29 Bongodog1964 : I was just scrolling down to post the very same comment, all the other travel agents are desperately trying to withdraw from the high street.
30 skipness1E : Slinky come on, nobody beleive the A380 and B787 will be for real expansion, given you yourself know they lack the slots. If only there had been a ser
31 LX138 : Whilst this loss isn't going to ruin VS, they do need to be bold in what strategy they pursue for the next few years. They are generally doing all the
32 virgincrew : Virgin Holidays have never had high street shops as such, they are only in other stores as 'concessions' so the operating costs aren't as much as say
33 jumpjet : Put me down for a tenner on "never"!!!!!!!!
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