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Virgin America Reports Q4 & Full 2013 Year Profit  
User currently offlineSocalApproach From United States of America, joined Feb 2013, 123 posts, RR: 0
Posted (8 months 6 days 10 hours ago) and read 7314 times:

http://money.msn.com/business-news/a...?feed=PR&date=20140326&id=17467452


A small net profit! Congratulations to everyone at VX!

51 replies: All unread, showing first 25:
 
User currently offlinedbo861 From United States of America, joined May 2004, 904 posts, RR: 1
Reply 1, posted (8 months 6 days 10 hours ago) and read 7248 times:

Quote:


Fleet Plan

2013 Additions: The airline took delivery of one additional A320 aircraft in the first quarter of 2013, increasing the total operating fleet to 53 Airbus A320-Family aircraft.
Future Deliveries: The airline's total order with Airbus remains at 40 A320-Family aircraft, with five scheduled for delivery in the second half of 2015, five in the first half of 2016, and 30 scheduled for delivery starting in 2020.


From the article..

So they're going to get 10 aircraft between second half of 2015 and first half of 2016 and then no more until 2020?


User currently offlineFCAFLYBOY From United Kingdom, joined Nov 2006, 604 posts, RR: 0
Reply 2, posted (8 months 6 days 9 hours ago) and read 7137 times:

Great news. Great airline too, very pleased to see them turning a small profit.

Hopefully now they will have confidence to expand to other key cities and reap the rewards and more passengers.

Cannot fault the airline, a fine flying experience every time I've flown them.


User currently offlineScottB From United States of America, joined Jul 2000, 6808 posts, RR: 32
Reply 3, posted (8 months 6 days 9 hours ago) and read 6982 times:

Quoting SocalApproach (Thread starter):

A small net profit! Congratulations to everyone at VX!

Some of the numbers in the profit & loss statement make little sense to me. I don't see how aircraft rent declined 25.6% year-over-year unless they've basically decided to play games with how rent is paid under their aircraft leases; the fleet didn't get any smaller.

And the primary reason why they were able to report a profit was the fact that they were able to write off $300 million in loans (or convert that into equity). Holding the "Other expense" line item (which would have primarily been loan interest) constant year-over-year would have yielded a net loss of $33 million for the year and $6.5 million for the quarter.

They're clearly trying to clean up the balance sheet for an IPO exit later this year.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17786 posts, RR: 46
Reply 4, posted (8 months 6 days 9 hours ago) and read 6952 times:

In probably the best margin year for US airlines in a long time (ever?), this LCC manages to squeak by because they cut capacity YOY, with very few of its next best adds lasting more than a season. Who is ready to buy into this IPO?

Quoting ScottB (Reply 3):
They're clearly trying to clean up the balance sheet for an IPO exit later this year.

  



E pur si muove -Galileo
User currently offlineLAXintl From United States of America, joined May 2000, 26025 posts, RR: 50
Reply 5, posted (8 months 6 days 8 hours ago) and read 6714 times:

Great job VX and kudos to all the employees.

That's 5 profitable quarters, including 3 consecutive ones in 2013 leading to full year of net profit.



From the desert to the sea, to all of Southern California
User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6694 posts, RR: 24
Reply 6, posted (8 months 6 days 8 hours ago) and read 6608 times:

Quoting MaverickM11 (Reply 4):
In probably the best margin year for US airlines in a long time (ever?), this LCC manages to squeak by because they cut capacity YOY, with very few of its next best adds lasting more than a season

2013 Operating Margin for United: 3.2%
2013 Operating Margin for Virgin America: 5.7%

It hasn't take much for them to outperform UA.


User currently offlinewingman From Seychelles, joined May 1999, 2315 posts, RR: 5
Reply 7, posted (8 months 6 days 7 hours ago) and read 6468 times:

Great news, I hope they make it. Hands down the best airline out of SFO for econ pax. Nice planes, fantastic terminal, wonderful 1960s flight crew attitude (just smiling is a welcome change of pace from the snarling grandmas on the legacy carriers). I'm hoping that between EK and SQ they can start benefitting from a better global partner network. A euro carrier outside of VA would be welcome, maybe AF/KLM..??

Keep it up VX!


User currently offlineSFOA380 From United States of America, joined Aug 2010, 222 posts, RR: 0
Reply 8, posted (8 months 6 days 7 hours ago) and read 6328 times:

Great news!!! Can't wait to read all the hate-mail from the legacy carrier goons that pray this fantastic little airline fails!

User currently offlineas739x From United States of America, joined Apr 2003, 6187 posts, RR: 24
Reply 9, posted (8 months 6 days 6 hours ago) and read 6274 times:

Quoting FlyPNS1 (Reply 6):
2013 Operating Margin for United: 3.2%
2013 Operating Margin for Virgin America: 5.7%

It hasn't take much for them to outperform UA.

Your seriously comparing an airline of 53 aircraft vs one of 708 (not including a express network)?

That being said. Congrats to VX and all my friends working there.



"Some pilots avoid storm cells and some play connect the dots!"
User currently offlineblueheronNC From United States of America, joined Jun 2007, 106 posts, RR: 0
Reply 10, posted (8 months 6 days 6 hours ago) and read 6053 times:

The fundamental problem with VX's business model is that the airline is "too nice" for the revenue they're getting from passengers. You're talking about people who fly infrequently enough to be "okay" with an extremely strong economy product, but whose frequency of travel isn't going to get them the perks of upgrades and miles to use on an extensive partner network. The people I know flying this airline out of SFO are late 20s-mid 30s folks who fly maybe 5-6 times a year, always O/D out of SFO, and don't care about paying out-of-pocket for overseas trips and flying economy there. Or, they don't care about the fact that if they have to fly somewhere that VX doesn't fly, they just fly another carrier but have basically "thrown away" all the EQM they could've thrown towards that carrier. It's not that different from the people who fly Southwest, except VX's product costs must be a good deal higher per capita.

People willing to pay a premium for something, or those who fly frequently enough to be throwing a lot annually at an airline, are still going to go elsewhere. I need codeshares and an extensive int'l alliance network before I'd switch to flying VX, even though if I'm stuck in Y I always wish it was a VX product. Tradeoffs.



[Edited 2014-03-26 10:35:02]

User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17786 posts, RR: 46
Reply 11, posted (8 months 6 days 5 hours ago) and read 5939 times:

Quoting FlyPNS1 (Reply 6):
It hasn't take much for them to outperform UA.

Absolutely correct, especially with VX' costs. So why is this the first time they've "outperformed" UA? And why did it require cutting capacity and canning markets like SJC and ANC? And how are the next-next best adds going to be better?



E pur si muove -Galileo
User currently offlinemariner From New Zealand, joined Nov 2001, 25566 posts, RR: 86
Reply 12, posted (8 months 6 days 5 hours ago) and read 5892 times:
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Quoting SocalApproach (Thread starter):
A small net profit! Congratulations to everyone at VX!

Congrats to the airline - a lot of folk here claimed they'd never make it to profit.

Maybe that explains the extraordinarily sour reaction from the usual suspects.

mariner



aeternum nauta
User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6694 posts, RR: 24
Reply 13, posted (8 months 6 days 4 hours ago) and read 5728 times:

Quoting MaverickM11 (Reply 11):
So why is this the first time they've "outperformed" UA?

Many airlines struggle to make money in their early years....particularly when they are going head to head with legacies who flood them with 16x day frequencies on EWR-SFO.

Quoting MaverickM11 (Reply 11):
And why did it require cutting capacity and canning markets like SJC and ANC?

Some markets work and some don't...such is life. JetBlue quickly abandoned markets like ATL, BNA and CMH.

Quoting MaverickM11 (Reply 11):
And how are the next-next best adds going to be better?

Places like LGA and DCA tend to be pretty lucrative. Now, given the perimeter rules, it won't be easy for VX, but I can't blame them for trying. Large numbers of slots don't come available at DCA/LGA very often.


User currently offlineflyiguy From United States of America, joined Feb 2004, 1151 posts, RR: 0
Reply 14, posted (8 months 6 days 4 hours ago) and read 5616 times:

Quoting mariner (Reply 12):

Yeah but the sad part is it took almost 7 years and almost a billion dollars to do it. Had it not been for SRB I can guarantee that they would have folded in under 3-5 years.

FLY



The opinions I post are of mine and mine alone, not of the airline I work for.
User currently offlinemariner From New Zealand, joined Nov 2001, 25566 posts, RR: 86
Reply 15, posted (8 months 6 days 4 hours ago) and read 5576 times:
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Quoting flyiguy (Reply 14):
Yeah but the sad part is it took almost 7 years and almost a billion dollars to do it. Had it not been for SRB I can guarantee that they would have folded in under 3-5 years.

But - there was SRB. And they didn't fold.

mariner



aeternum nauta
User currently offlineflyiguy From United States of America, joined Feb 2004, 1151 posts, RR: 0
Reply 16, posted (8 months 6 days 4 hours ago) and read 5542 times:

Quoting mariner (Reply 15):

Would you have spent almost a billion dollars to keep it going? You know the old saying, " How do you make a million Dollar Airline?, Start with a Billion Dollars! "

FLY



The opinions I post are of mine and mine alone, not of the airline I work for.
User currently offlinemariner From New Zealand, joined Nov 2001, 25566 posts, RR: 86
Reply 17, posted (8 months 6 days 4 hours ago) and read 5464 times:
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Quoting flyiguy (Reply 16):
Would you have spent almost a billion dollars to keep it going?

I've no idea.

Without SRB there would not have been a Virgin America.

mariner



aeternum nauta
User currently offlinestrfyr51 From United States of America, joined Apr 2012, 1336 posts, RR: 1
Reply 18, posted (8 months 6 days 3 hours ago) and read 5367 times:
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Quoting SFOA380 (Reply 8):
Great news!!! Can't wait to read all the hate-mail from the legacy carrier goons that pray this fantastic little airline fails!

Dude!
Give it a BREAK will YA?? There are a lot of Ex UAL guys and good friends at VX, and they still have Friends AT United.
Att that crap is corporate mess!! Nobody wishes Ill on friends


User currently offlinephxa340 From United States of America, joined Mar 2012, 899 posts, RR: 1
Reply 19, posted (8 months 6 days 3 hours ago) and read 5041 times:

Quoting FlyPNS1 (Reply 13):
Many airlines struggle to make money in their early years

Except VX really isn't in its early years anymore. Overall, VX is a failure in the eyes of investors, spending hundreds of millions for a net yearly income of 10 mil isn't too hot of a ROI. However a profit is a profit and that is commendable as many airlines have trouble achieving even that.

On a separate note, congrats the VX employees, I know some of you have personally worked your butts off to make this happen.


User currently onlineB747forever From Sweden, joined May 2007, 17126 posts, RR: 10
Reply 20, posted (8 months 6 days 2 hours ago) and read 4892 times:

Quoting phxa340 (Reply 19):
However a profit is a profit and that is commendable as many airlines have trouble achieving even that.

But the past year basically all airlines have posted record or very large profits, yet VX can "only" produce a $10 million profit.

[Edited 2014-03-26 14:05:17]


Work Hard, Fly Right
User currently offlineflyiguy From United States of America, joined Feb 2004, 1151 posts, RR: 0
Reply 21, posted (8 months 6 days 2 hours ago) and read 4872 times:

Quoting FlyPNS1 (Reply 13):

10 million is a profit but considering that airlines were making record profits all year close to A Billion per major and close to 100 million on the smaller and even regionals were making records. I can't see them getting an IPO yet.


FLY



The opinions I post are of mine and mine alone, not of the airline I work for.
User currently offlinemariner From New Zealand, joined Nov 2001, 25566 posts, RR: 86
Reply 22, posted (8 months 6 days 2 hours ago) and read 4814 times:
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Quoting phxa340 (Reply 19):
Overall, VX is a failure in the eyes of investors, spending hundreds of millions for a net yearly income of 10 mil isn't too hot of a ROI.

You know this how?

Venture capitalists - which these are - usually put money into projects for a big pay-off with the IPO.

You know how long their anticipated time frame for an IPO is? You know their tax strictures? You know their appetite for risk v. reward?

Oaktree Capital, the venture capitalists in Spirit, actually sold a big bunch of their holding to Indigo (making it the lead investor) when the airline was profitable but before the IPO, and when the IPO happened both Indigo and Oaktree made out like bandits. The question then becomes - why did Oaktree divest some of its holding before the IPO?

mariner

[Edited 2014-03-26 14:17:47]


aeternum nauta
User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17786 posts, RR: 46
Reply 23, posted (8 months 6 days 2 hours ago) and read 4691 times:

Quoting FlyPNS1 (Reply 13):
Many airlines struggle to make money in their early years....
Quoting FlyPNS1 (Reply 13):
JetBlue quickly abandoned markets like ATL, BNA and CMH.

These are the same excuses that have been repeated annually for VX. B6 and VX have both closed about 4-5 stations, but B6 has about 4x as many destinations as VX and has been around for twice as long.

Quoting phxa340 (Reply 19):
Overall, VX is a failure in the eyes of investors, spending hundreds of millions for a net yearly income of 10 mil isn't too hot of a ROI

   UA makes $1B and it's almost certain near death here on a.net; VX makes $10MM after burning through almost $1B and it's an incredible achievement 
Quoting mariner (Reply 22):
Venture capitalists - which these are - usually put money into projects for a big pay-off with the IPO.

Big payoffs are famous in the airline industry, said no one ever. These venture capitalists want out.

Quoting mariner (Reply 22):
Oaktree Capital, the venture capitalists in Spirit, actually sold a big bunch of their holding to Indigo (making it the lead investor) when the airline was profitable but before the IPO, and when the IPO happened both Indigo and Oaktree made out like bandits.

NK was also solidly profitable with seemingly limitless opportunity to expand--everything VX is not. And still the IPO was tepid.



E pur si muove -Galileo
User currently offlinemariner From New Zealand, joined Nov 2001, 25566 posts, RR: 86
Reply 24, posted (8 months 6 days 1 hour ago) and read 4520 times:
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Quoting MaverickM11 (Reply 23):
   UA makes $1B and it's almost certain near death here on a.net; VX makes $10MM after burning through almost $1B and it's an incredible achievement 

That's some hyperbole. It isn't an "incredible achievement" at all. It may be meeting its financial targets is all.

The Wall Street disappointment with United was that it missed its estimates.

Quoting MaverickM11 (Reply 23):
NK was also solidly profitable with seemingly limitless opportunity to expand--everything VX is not. And still the IPO was tepid.

Which raises the question - again - why did Oaktree sell a bunch of a "solidly profitable" airline before the IPO?

Nor did it sell all its remaining holding with the "tepid" IPO. It retained a big bunch, sold it off in dribs and drabs when the (now public) share price was rising, and sold the remaining 13% later, when there was a 2PO:

http://www.thedeal.com/content/priva...mes-returns-on-spirit-air-exit.php

"Oaktree flies with 2.4 times returns on Spirit Air exit

Same with Soros at JetBlue. He didn't sell at the IPO - he waited until the share price hit $40 and sold a bunch then.

From memory - but only from memory - the strike price of his shares was $10, but it may have been a tad higher.
mariner

[Edited 2014-03-26 14:48:04]


aeternum nauta
User currently offlineual747den From United States of America, joined Dec 2003, 2392 posts, RR: 11
Reply 25, posted (8 months 6 days 1 hour ago) and read 4714 times:

Quoting FlyPNS1 (Reply 6):
2013 Operating Margin for United: 3.2%
2013 Operating Margin for Virgin America: 5.7%

It hasn't take much for them to outperform UA.

Really?
Im guessing that you don't know much about financial information and how things work. Even with that in mind you're comparing an airline who has a full fleet that is smaller than United's 777 fleet alone, doesn't that seem a little odd to you?



/// UNITED AIRLINES
User currently offlineDeltaMD90 From United States of America, joined Apr 2008, 7972 posts, RR: 51
Reply 26, posted (8 months 6 days 1 hour ago) and read 4639 times:

I don't think there were many haters, just a lot of people (me included) that thought VX wouldn't turn a profit/die out before they were able to. Guess we were wrong, congrats. We all have our biases but really, we're all on the same team


Ironically I have never flown a Delta MD-90 :)
User currently offlinephxa340 From United States of America, joined Mar 2012, 899 posts, RR: 1
Reply 27, posted (8 months 6 days 1 hour ago) and read 4637 times:

Quoting mariner (Reply 22):
You know this how?

OK, you keep falling back on the IPO. IPOs aren't netting near as much as the would pre-economic crisis, especially an airline IPO.

You also keep falling back on Spirit IPO .... VX is not Spirit, they are two completely different types of animals, no pun intended (I enjoy your passion for Frontier). Just because Spirit IPO was successful which I agree doesn't mean that VX will have the same successful IPO.

Quoting mariner (Reply 22):
You know how long their anticipated time frame for an IPO is?

I think both you and I can agree that they were expecting VX to be profitable long before this.

Quoting mariner (Reply 22):
You know their tax strictures

So you invest in a loser airline (financially) to offset gains from a winner investment ??

Quoting mariner (Reply 22):
You know their appetite for risk v. reward?

Investing in mortgage backed securities will give you a bigger yield than VX and are much safer. Which again, falls back to how the successful the IPO is going to be, which I don't think is going to be a big winner.


User currently offlineFURUREFA From United States of America, joined Feb 2004, 806 posts, RR: 2
Reply 28, posted (8 months 6 days 1 hour ago) and read 4568 times:

Quoting mariner (Reply 24):
"Oaktree flies with 2.4 times returns on Spirit Air exit

Same with Soros at JetBlue. He didn't sell at the IPO - he waited until the share price hit $40 and sold a bunch then.

2.4x isn't necessarily a great return for a VC - it might be, but even 3x can be poor depending on the firm's strategy.


User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17786 posts, RR: 46
Reply 29, posted (8 months 6 days 1 hour ago) and read 4559 times:

Quoting mariner (Reply 24):
Which raises the question - again - why did Oaktree sell a bunch of a "solidly profitable" airline before the IPO?

Who knows. Perhaps they saw the same confluence of events that made NK reduce its IPO by 30% to a smaller volume at a lower price.

Quoting phxa340 (Reply 27):
I think both you and I can agree that they were expecting VX to be profitable long before this.

  

Quoting mariner (Reply 24):
The Wall Street disappointment with United was that it missed its estimates.

I think you'd find no one on Wall Street is buyin' what VX may be sellin' regardless



E pur si muove -Galileo
User currently offlinemariner From New Zealand, joined Nov 2001, 25566 posts, RR: 86
Reply 30, posted (8 months 6 days 1 hour ago) and read 4470 times:
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Quoting phxa340 (Reply 27):
OK, you keep falling back on the IPO. IPOs aren't netting near as much as the would pre-economic crisis, especially an airline IPO.

Um- I've also talked about waiting to sell until after IPO's and waiting for 2PO's. Sometimes, like Indigo, not even selling then, but waiting until it suits their purposes.

Quoting phxa340 (Reply 27):
You also keep falling back on Spirit IPO

Because it is the most recent airline IPO we've had. I can broaden if you like, because this isn't about airlines - this is about money.

Quoting phxa340 (Reply 27):
I think both you and I can agree that they were expecting VX to be profitable long before this.

I can't agree because I don't know that. How can I know what is in their minds? Didn't some of the original investors get out early - at a profit?

Quoting phxa340 (Reply 27):
So you invest in a loser airline (financially) to offset gains from a winner investment ??

I dunno if it has happened with airlines, but it has happened.

Quoting phxa340 (Reply 27):
Investing in mortgage backed securities will give you a bigger yield than VX and are much safer.

Of course, it will. That's why we have venture capitalists, who have a greater appetite for risk and reward.

In my business, it is estimated that there's one hit for every nine losses. But still people keep pouring money in because the returns from that one hit are faboo.

Quoting MaverickM11 (Reply 29):
think you'd find no one on Wall Street is buyin' what VX may be sellin' regardless

I thought we were talking about United, because how does that matter in the case of Virgin? It isn't a public company yet. All that matters is that the VC's buy it, which - I guess - they do.

mariner

[Edited 2014-03-26 15:39:04]


aeternum nauta
User currently offlinewingman From Seychelles, joined May 1999, 2315 posts, RR: 5
Reply 31, posted (8 months 6 days 1 hour ago) and read 4444 times:

Quoting blueheronNC (Reply 10):
Or, they don't care about the fact that if they have to fly somewhere that VX doesn't fly, they just fly another carrier but have basically "thrown away" all the EQM they could've thrown towards that carrier. It's not that different from the people who fly Southwest, except VX's product costs must be a good deal higher per capita.

I'm one of those people, and I'll admit it was a tough decision to scrap my relationship with UA. It was a long one and I spent many years enjoying the luxuries of being a 1K. But during one 18 month span I changed jobs and lost that status. When I changed jobs again my core flying activity became 8-12 round trips per year between SFO and ORD. Trust me when I say that if you have no premier status on UA you are treated little better than a mangy stray. Once you get to Premier Exec you start to see the possibility of being treated with human dignity. But between major UA hubs like SFO and ORD, you won't see the inside of a First Class cabin unless you're Global Services status. They might let you walk through the cabin as a 1K, but dinnae touch the leather ye daft wee!!!

So I took a shot with VX, clawed my way back to status and have never looked back once. I do miss the business upgrades on personal trips but since my wife never had status it was a rare flight indeed when I'd be able to get her up there with me. Even then though, all the growling competition in the boarding area between 25 GS and 1Ks, in addition to the 100 Prem Execs and Premiers just became pathetic. Honestly, it all felt a bit slimy.

I love VX and truly hope they're here to stay. Wouldn't touch the stock with another guy's money but then again, anyone who buys airline stock must be a complete nutter.


User currently offlineStuckInCA From United States of America, joined Oct 2005, 1991 posts, RR: 0
Reply 32, posted (8 months 6 days ago) and read 4281 times:

Quoting as739x (Reply 9):
Your seriously comparing an airline of 53 aircraft vs one of 708 (not including a express network)?

Wait. Someone says their results aren't impressive because other US carriers are doing better (effectively comparing them to all US carriers). So he points out that they did better than UA (who is also heavy at SFO) and you chime in with a claim that they can't be compared?

I don't get it.

Nice to see VX doing OK.


User currently offlinefreakyrat From United States of America, joined Aug 2008, 884 posts, RR: 1
Reply 33, posted (8 months 6 days ago) and read 4274 times:
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I personally love VX and have flown them almost exclusively when I fly to LAX and sometimes SFO from DFW. ON my recent experience with them from DFW-LAX I got up late and missed my flight or thought I did. I was cheerfully rebooked on a later flight to LAX by their DFW employees with no hassle. I proceeded through security and to the gate only to find my original flight still there 30 minutes after my original departure time (Maintenance Delay). The Virgin America gate agent took my new ticket and rebooked me on my original flight and scanned my boarding pass and I even got my original seat. Now I don't think anyone can name a carrier that would have done that. Thank You.

I know a few pilots that fly for Virgin America and all of Virgin's employees put out a superior product. Their planes are nice, the amenities are nice on them and I keep saying that if Muse Air would still be around today it would be exactly like Virgin America. Virgin has restored sanity to flying.

So kudos to their employees for all their hard work in turning a profit and keep up the outstanding work.


User currently offlinedoug_Or From United States of America, joined Mar 2000, 3437 posts, RR: 3
Reply 34, posted (8 months 6 days ago) and read 4205 times:

Quoting SFOA380 (Reply 8):

Great news!!! Can't wait to read all the hate-mail from the legacy carrier goons that pray this fantastic little airline fails!
Quoting mariner (Reply 12):
Congrats
Quoting as739x (Reply 9):
Congrats
Quoting wingman (Reply 7):
Great news
Quoting LAXintl (Reply 5):
kudos
Quoting phxa340 (Reply 19):
congrats
Quoting DeltaMD90 (Reply 26):
congrats
Quoting ScottB (Reply 3):
Some of the numbers in the profit & loss statement make little sense to me. I don't see how aircraft rent declined 25.6% year-over-year unless they've basically decided to play games with how rent is paid under their aircraft leases; the fleet didn't get any smaller.

And the primary reason why they were able to report a profit was the fact that they were able to write off $300 million in loans (or convert that into equity). Holding the "Other expense" line item (which would have primarily been loan interest) constant year-over-year would have yielded a net loss of $33 million for the year and $6.5 million for the quarter.

Sooooooo, did they actually make any money? Or did they just hide the losses? I don't know the first thing about accounting. Could they have been taking charges earlier on when they new they were going to be loosing money anyway (having a bigger loss) so they could make it look like they were profitable now?



When in doubt, one B pump off
User currently offlineflyiguy From United States of America, joined Feb 2004, 1151 posts, RR: 0
Reply 35, posted (8 months 6 days ago) and read 4110 times:

Quoting freakyrat (Reply 33):

I personally love VX and have flown them almost exclusively when I fly to LAX and sometimes SFO from DFW. ON my recent experience with them from DFW-LAX I got up late and missed my flight or thought I did. I was cheerfully rebooked on a later flight to LAX by their DFW employees with no hassle. I proceeded through security and to the gate only to find my original flight still there 30 minutes after my original departure time (Maintenance Delay). The Virgin America gate agent took my new ticket and rebooked me on my original flight and scanned my boarding pass and I even got my original seat. Now I don't think anyone can name a carrier that would have done that.

Southwest!

[Edited 2014-03-26 16:23:19]


The opinions I post are of mine and mine alone, not of the airline I work for.
User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17786 posts, RR: 46
Reply 36, posted (8 months 5 days 23 hours ago) and read 3925 times:

Quoting mariner (Reply 30):
Didn't some of the original investors get out early - at a profit?

It was part of their agreement; they could get out and get all their money back plus 8%. The Virgin Group was essentially paying them to park their money in VX.

Quoting mariner (Reply 30):
I thought we were talking about United, because how does that matter in the case of Virgin? It isn't a public company yet. All that matters is that the VC's buy it, which - I guess - they do.

If VX wants to do an IPO it has to take its show on the road, and convince the same people that invest in UA, that a) it's worth an investment--for which I think there is zero appetite--and b) it then has to hit its targets, which given its first seven years, seems to be problematic.

[Edited 2014-03-26 16:51:19]


E pur si muove -Galileo
User currently offlinemariner From New Zealand, joined Nov 2001, 25566 posts, RR: 86
Reply 37, posted (8 months 5 days 23 hours ago) and read 3829 times:
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Quoting MaverickM11 (Reply 36):
It was part of their agreement; they could get out and get all their money back plus 8%. The Virgin Group was essentially paying them to park their money in VX.

And kept their side of the deal. It wouldn't be the first bridging loan in the hstory of finance, they happen every day.

Quoting MaverickM11 (Reply 36):
If VX wants to do an IPO it has to take its show on the road, and convince the same people that invest in UA, that a) it's worth an investment--for which I think there is zero appetite--and b) it then has to hit its targets, which given its first seven years, seems to be problematic.

There we agree - I'm sure there is very little appetite right now for an IPO. I'm always ready to be surprised, of course.

But I'm not aware they have announced an IPO. Why so impatient?

mariner

[Edited 2014-03-26 17:11:03]


aeternum nauta
User currently offlinetoobz From Finland, joined Jan 2010, 802 posts, RR: 0
Reply 38, posted (8 months 5 days 23 hours ago) and read 3769 times:

congrats to VX employees! Have to say i flew them for the first time couple weeks ago and i was very impressed. Even though i fly DL nonrev (and very thankful for), i really enjoyed their flights.....(maybe even a bit more    )

User currently offlinewingman From Seychelles, joined May 1999, 2315 posts, RR: 5
Reply 39, posted (8 months 5 days 22 hours ago) and read 3557 times:

Quoting MaverickM11 (Reply 36):
If VX wants to do an IPO it has to take its show on the road, and convince the same people that invest in UA, that a) it's worth an investment--for which I think there is zero appetite--and b) it then has to hit its targets, which given its first seven years, seems to be problematic.

From a financial performance standpoint I'd say in VX's defense that 1) they put roots down in a very heavily occupied home base, and one with very strong int'l partner ties in Star, 2) UA and the many other legacies VX is compared to with regard to finances have all just enjoyed the fruits of reorganization under bankruptcy protection, and 3) the last 4 years have been pretty shitty economically, especially in California.

All that taken into consideration I think they've done well for themselves.


User currently offlineFlyPNS1 From United States of America, joined Nov 1999, 6694 posts, RR: 24
Reply 40, posted (8 months 5 days 22 hours ago) and read 3445 times:

Quoting MaverickM11 (Reply 23):
   UA makes $1B and it's almost certain near death here on a.net; VX makes $10MM after burning through almost $1B and it's an incredible achievement 

That's because UA should be making profits of almost $3B a year. The fact that they can only make $1Billion in one of the best year's ever points to a major problem.

Quoting ual747den (Reply 25):
Im guessing that you don't know much about financial information and how things work.

I know very well how things work and the fact of the matter is that UA's numbers stink. I'm not saying VX has great numbers either, but UA's are downright awful. UA's RASM numbers are so awful they've just stopped reporting them in the monthly operational reports!

Quoting MaverickM11 (Reply 23):
Big payoffs are famous in the airline industry, said no one ever.

You apparently haven't invested money in airline stocks over the past year or two. I know some people (myself included) that have made very handsome returns.

I'm not saying that this is the case for VX, but it can happen. I think VX is still 1-2 years away from being ready for an IPO. The bottomline is that legacy carriers aren't growing much (and in UA's case likely shrinking), so overtime VX is likely to continue to slowly improve it's numbers unless they do something truly stupid or the economy really tanks.


User currently offlineslcdeltarumd11 From United States of America, joined Jan 2004, 3607 posts, RR: 0
Reply 41, posted (8 months 5 days 22 hours ago) and read 3443 times:

There is a reason why United and AA has fought so hard to hurt virgin america, they see they are a real threat. Look at EWR united has tried everything possible to hurt them, they clearly see virgin americas potential and do not like it at all!

User currently offlinelightsaber From United States of America, joined Jan 2005, 13440 posts, RR: 100
Reply 42, posted (8 months 5 days 21 hours ago) and read 3289 times:
Support Airliners.net - become a First Class Member!

Quoting ScottB (Reply 3):
Some of the numbers in the profit & loss statement make little sense to me. I don't see how aircraft rent declined 25.6% year-over-year unless they've basically decided to play games with how rent is paid under their aircraft leases; the fleet didn't get any smaller.

What is VX's debt to capital ratio. IMHO, that would tell quite a story...

What you have is a very interesting find. I'd like to know more (did VX 'front load' leases?).

Quoting ScottB (Reply 3):
Holding the "Other expense" line item (which would have primarily been loan interest) constant year-over-year would have yielded a net loss of $33 million for the year and $6.5 million for the quarter.

Interesting. But not surprising prior to an IPO. The aircraft rent change is even more interesting...

Quoting MaverickM11 (Reply 23):
These are the same excuses that have been repeated annually for VX. B6 and VX have both closed about 4-5 stations, but B6 has about 4x as many destinations as VX and has been around for twice as long.

   But then again, B6 is my favorite airline.   

Quoting flyiguy (Reply 35):
I personally love VX and have flown them almost exclusively when I fly to LAX and sometimes SFO from DFW.

VX's issue hasn't been customer satisfaction, it has been revenue versus expenditure.

I see a risk to VX's revenue. The issue is VX will soon have a premium cabin to contend with against B6. I know people love VX. But I have seen VX 'take' a few B6 customers who wanted a premium cabin who would be willing to go back... I think B6 adding a front cabin will make the competition very interesting.    IMHO, B6 is launching a front cabin due to VX showing them the money to be made on certain routes.

Lightsaber



Societies that achieve a critical mass of ideas achieve self sustaining growth; others stagnate.
User currently offlineual747den From United States of America, joined Dec 2003, 2392 posts, RR: 11
Reply 43, posted (8 months 5 days 16 hours ago) and read 2367 times:

If you look back AS did more than anyone to stop VX in it's tracks.

Now I obviously get to nonrev on United and several other airlines domestically but I have to admit that I have paid to fly VX First because I wanted to try it the first time but then I paid to fly VX several more times because I enjoined the experience. Now of course it isn't the best option for a passenger who flies a lot for business because the network is not really big enough to meet most of those needs however it is a great little airline and if it meets your needs it's worth it to pay a little extra for the perks in my opinion. A major network airline could never actually offer the same level of service as VX offers because it would simply just never be a profitable model for a major airline but again for a small niche airline it works out well. If they are actually making a profit by catering to this segment of the market I say good for them! Here at United we have lots of people who are now at VX and I wish them all the best. As competitive as we all are in this industry we are all still a family and I wouldn't want to see them fail and those people hurt. VX actually has some really talented people working for them from the corporate office all the way down, I'm happy to say good job to VX and I hope they keep it up while I fight hard to beat them at their own game from high above Chicago!!



/// UNITED AIRLINES
User currently offlineflyiguy From United States of America, joined Feb 2004, 1151 posts, RR: 0
Reply 44, posted (8 months 5 days 6 hours ago) and read 1854 times:

Quoting flyiguy (Reply 35):
Quoting freakyrat (Reply 33):


I personally love VX and have flown them almost exclusively when I fly to LAX and sometimes SFO from DFW. ON my recent experience with them from DFW-LAX I got up late and missed my flight or thought I did. I was cheerfully rebooked on a later flight to LAX by their DFW employees with no hassle. I proceeded through security and to the gate only to find my original flight still there 30 minutes after my original departure time (Maintenance Delay). The Virgin America gate agent took my new ticket and rebooked me on my original flight and scanned my boarding pass and I even got my original seat. Now I don't think anyone can name a carrier that would have done that.
Quoting lightsaber (Reply 42):
Quoting flyiguy (Reply 35):
I personally love VX and have flown them almost exclusively when I fly to LAX and sometimes SFO from DFW.

I was answering his questiong, not saying i fly VX...

FLY



The opinions I post are of mine and mine alone, not of the airline I work for.
User currently offlinestrfyr51 From United States of America, joined Apr 2012, 1336 posts, RR: 1
Reply 45, posted (8 months 5 days 5 hours ago) and read 1800 times:
Support Airliners.net - become a First Class Member!

Quoting slcdeltarumd11 (Reply 41):
There is a reason why United and AA has fought so hard to hurt virgin america, they see they are a real threat. Look at EWR united has tried everything possible to hurt them, they clearly see virgin americas potential and do not like it at all!

VX got their EWR gates due to UCH's merger. Why Would United welcome them at their Expense??
VX wanted gates at ORD, They first asked for Gates in Terminal 2 that UAX was using on the E concourse,
Why would United want to give up those gates either?? Hence?? They're over on Terminal 5 and if Chicago builds the new LCC terminal they'll be there
United hasn't tried to hurt anybody. But they have no intention of giving anything away that they want to keep.
Heck! That's Business! And Business people Esspecially at an Airline expect that.
During our CH11 period Frontier asked for gates we owned at Denver, even NK asked for 4 gates at Terminal 1 at ORD. B26-29.
Was it Ill Will toward them they didn't GET the gates?? NO !!
If it doesn't benefot United? Why would We do that for a terminal WE Built with our OWN money?!?
Would YOU?? I wouldn't unless there was a good chunk of something in it for ME ..


User currently offlinemariner From New Zealand, joined Nov 2001, 25566 posts, RR: 86
Reply 46, posted (8 months 5 days 5 hours ago) and read 1747 times:
Support Airliners.net - become a First Class Member!

Quoting strfyr51 (Reply 45):
During our CH11 period Frontier asked for gates we owned at Denver, even NK asked for 4 gates at Terminal 1 at ORD. B26-29.
Quoting strfyr51 (Reply 45):
Was it Ill Will toward them they didn't GET the gates?? NO !!

If you mean the gates on A at Denver, Frontier did get the gates - and DIA gave United $10 million debt relief as a sweetener.

http://www.aviationpros.com/news/104...ited-airlines-10-million-for-gates

"Denver Airport Plans to Pay United Airlines $10 Million for Gates"

Quoting strfyr51 (Reply 45):
United hasn't tried to hurt anybody.

Of course it has, all the legacies have tried to inhibit the newcomers, as I would expect.

mariner



aeternum nauta
User currently offlineMaverickM11 From United States of America, joined Apr 2000, 17786 posts, RR: 46
Reply 47, posted (8 months 5 days 4 hours ago) and read 1653 times:

Quoting FlyPNS1 (Reply 40):
That's because UA should be making profits of almost $3B a year. The fact that they can only make $1Billion in one of the best year's ever points to a major problem.

I think the reaction to UA and VX on a.net has far more to do with "ermagerd ptvs!" than the actual financials. I think you'd find Wall Street itself probably has an appropriately dim outlook for both carriers.

Quoting FlyPNS1 (Reply 40):
You apparently haven't invested money in airline stocks over the past year or two. I know some people (myself included) that have made very handsome returns.

It doesn't take a rocket scientist to know that reduced competition, capacity, and increased pricing power and economic growth is going to push airline results up, but it doesn't change the fact that VX' business model barely works in a favorable environment, and fails completely in about 20% of the markets it tries.



E pur si muove -Galileo
User currently offlinefreakyrat From United States of America, joined Aug 2008, 884 posts, RR: 1
Reply 48, posted (8 months 5 days 3 hours ago) and read 1599 times:
Support Airliners.net - become a First Class Member!

Quoting flyiguy Reply35

Forgot Southwest. They are also good about accommodating late passengers plus I even saw their employees go beyond the call of duty in accommodating a passenger that was in Houston for a convention and had her purse stolen with all her forms of ID and was traveling to MKC. After calming her down, they got her thru security and on the plane and home.


User currently offlinevs11 From United States of America, joined Jul 2001, 1111 posts, RR: 0
Reply 49, posted (8 months 5 days 3 hours ago) and read 1550 times:

Quoting mariner (Reply 22):
The question then becomes - why did Oaktree divest some of its holding before the IPO?

This is a pretty common IPO exit strategy by all private equity firms. The partial realization is to provide some liquidity to investors and also to show faith in the company post-IPO, and technically protect themselves from being accused that they knowingly sold "bad apples" to the public. Also, chances are that shares will appreciate over time so you still want to take advantage of that hence you keep some of the shares for later.

The future is bright for VX though - no more competitors in bankruptcy, economy is growing, people are flying, capacity has been shrinking, they have a compelling product over most of their competitors...


User currently offlineSocalApproach From United States of America, joined Feb 2013, 123 posts, RR: 0
Reply 50, posted (8 months 4 days 14 hours ago) and read 1268 times:

Quoting ScottB (Reply 3):
I don't see how aircraft rent declined 25.6% year-over-year unless they've basically decided to play games with how rent is paid under their aircraft leases; the fleet didn't get any smaller.

VX has been able to restructure with the lessors on how much they are leasing the fleet for and it is saving VX around 25M from what they previously were paying if I recall.


User currently offlineF9Animal From United States of America, joined Dec 2004, 5116 posts, RR: 28
Reply 51, posted (8 months 4 days 13 hours ago) and read 1168 times:

All I can say is, congrats to Virgin America! This is a huge milestone for an airline that was given little chance to be successful. They faced so many hurdles, and always put up their dukes to fight. The pats on the backs of every employee at Virgin is deserved, because this was only possible by the hard work of every employee. Virgin America still has lots of work ahead. The airline has proven it can be profitable, and many here have said they never had a chance. I have always stood on the sidelines of new startups, hoping they could beat the odds. Congrats again VX!


I Am A Different Animal!!
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