MaverickM11
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VX Reports First Quarter 2012 Results

Tue Jul 03, 2012 9:03 pm

http://finance.yahoo.com/news/virgin...ports-first-quarter-180000034.html

"Top Line First Quarter Reporting Highlights:

Operating results: The airline reported an operating loss of $49 million in the first quarter on revenues of $267 million – a (65) percent change year-over-year.

Load factor: Revenue passenger miles increased 38 percent on a 29 percent increase in capacity, resulting in a first quarter load factor of 81 percent – a five point load factor improvement for the quarter year-over-year, and a record load factor for the airline in the first quarter.

Top line progress: Revenue in the first quarter was up 33 percent versus first quarter 2011. RASM increased by two percent year-over-year.

Cost control: Operating expense per available seat mile excluding fuel (ex-fuel CASM) increased by 1 percent in the quarter, driven by significant investment in growth (training newly hired teammates, aircraft in modification and reservations system changeover).

Cash: The airline ended the quarter with $111 million in unrestricted cash.
"

-18% Operating margin, vs -14% last year.

[Edited 2012-07-03 14:06:20]

[Edited 2012-07-03 14:06:47]
E pur si muove -Galileo
 
luv2fly
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RE: VX Reports First Quarter 2012 Results

Tue Jul 03, 2012 9:43 pm

At what point do they stop throwing good money after bad.
You can cut the irony with a knife
 
phxa340
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RE: VX Reports First Quarter 2012 Results

Tue Jul 03, 2012 10:08 pm

A growing negative operating margin is not a good sign BUT RASM increase of 2% is a good sign.

Quoting luv2fly (Reply 1):
At what point do they stop throwing good money after bad.

It takes money to make money. If VX can grow large enough to build an attractive network with multiple daily flights they can start attracting high yield business customers which pushed up margins (Which is one of their problems)

I used to approach VX with skepticism but everytime they grow , they are improving key metrics. I just don't know how long the investors are going to stay on the sideline watching negative returns. With fuel prices declining , VX is poised to pop into profit.

Where is VXCabincrew , he always gives a balanced/unbiased outlook on the comapny.
 
H53Epilot
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 1:30 am

The problem with declining fuel prices are the hedges VX has. Delta, for example, lost quite a bit of money with fuel hedges and declining fuel prices. Remains to be seen.....
 
phxa340
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 2:01 am

Quoting H53Epilot (Reply 3):

The problem with declining fuel prices are the hedges VX has. Delta, for example, lost quite a bit of money with fuel hedges and declining fuel prices. Remains to be seen.....

Does VX hedge ? I know US has stopped hedging but with VX being a private company , I am not sure they even need to disclose this ?
 
luv2fly
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 2:16 am

There is only so many times you can go to the well. At some point someone has to say enough is enough.
You can cut the irony with a knife
 
H53Epilot
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 3:42 am

From their latest release. Very ambiguous....
"In late 2011, Virgin America resumed a structured fuel hedging program to help manage the impact of fuel price volatility.  Approximately 70 percent of the airline's fuel consumption in the first quarter of 2012 was hedged at prices slightly below market levels, resulting in a fuel expense for the quarter that was approximately $2 million below market prices.  The carrier has hedged approximately 33 percent of its expected fuel consumption for the remainder of 2012.  Since April 2012, fuel prices have dropped significantly.  Under Virgin America's hedging program, the Company will not realize the full benefit of falling prices until the second half of 2012."
 
F9Animal
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 4:42 am

Fuel is a total pain in the ass for the airlines. VX did what they had to do, and hedge. Lets face it, oil prices were showing no signs of easing. The bright light out of this is the 2% RASM increase. I wonder what kind of quarter numbers would have been generated if fuel costs were at levels we see currently? I suspect we might have seen a profit.
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NWADTWE16
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 4:58 am

Quoting luv2fly (Reply 5):

Typical!!  

I knew as soon as i read this the HATERS would feed like rats. VX is a great airline and doing great things. They are very close to a profit im sure and call me crazy but they ARE commanding high fares from pax and from my point of view as a Corporate Travel Mgr i can tell you people are begging to be booked on them whenever and wherever possible. 81% LF shows they are doing well and i never see very low fares on them, competitive but not low. I know they have to be doing great into DFW by now too, another good sign as that was a new route. I see PDX bookings are soft though but that what, less than a month in? Pure specualtion but i feel there is a master plan to bring Virgin America together with Virgin Atlantic and Virgin Australia at some point..and im sure with things being as 'close' to good as they are their investors would keep going the distance.
 
VXCabinCrew
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 5:03 am

Quoting ,reply=3:
Where is VXCabincrew , he always gives a balanced/unbiased outlook on the comapny.

Haha, thanks for asking about me phxa340  

I'm going to make this quick because I have be up very early in the morning to start a 3-day trip!

While I wasn't anticipating us making a profit for this quarter, the total loss was more than I had expected.

I won't touch on fuel, as that has already been sufficiently covered.

As was mentioned by phxa340, a big part of the loss for us has been the operation of so many new stations. From what they tell us at work in emails, it takes 12-15 months for a new market to mature into profitability. We started DFW in December 2010, and it has just become profitable in the past few months (DFW-LAX has proven to be especially strong for us). So with the handful of new markets we have, the financial drain can be seen in our results. We are about to enter into a period of planned slow growth due to the minimal number of aircraft deliveries we will have between now and next year. So hopefully, our newer markets will be able to mature, while we strengthen our proven markets.

Also a huge drain for us financially was the messy transition to Sabre. It was a painful time for us at the company and the expense that we incurred was not anticipated.

I'm not going to make any predictions about the future, as I'm neither a psychic nor a financial analyst, but the results of our Sabre transition have exceeded our expectations, enabling us to draw in higher-yielding traffic and giving us a big boost through several interline agreements. Also, the integration of V America, V Atlantic and V Australia frequent flier programs and our new codeshare with V Australia will be integral to our effort to achieve profit this year.

I'm looking forward to seeing how 2012 turns out for us.
 
NWADTWE16
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 5:07 am

Quoting VXCabinCrew (Reply 9):

Being able to sell, exchange and all around handle you guys in Sabre makes you such a more viable option for people to end up on VX. Since the transition i am selling alot of VX and like i said above when people find out they CAN take VX they jump on it! Have a great trip VXCabinCrew  
 
F9Animal
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 5:15 am

Quoting VXCabinCrew (Reply 9):
I'm looking forward to seeing how 2012 turns out for us.

Fingers crossed that fuel prices continue to fall! While I agree with you on maturing markets, I think fuel is probably VXs most costly expense. If fuel drops another 20%, I bet VX would be spitting profits like crazy.
I Am A Different Animal!!
 
SuperDash
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 6:35 am

Quoting phxa340 (Reply 2):
A growing negative operating margin is not a good sign BUT RASM increase of 2% is a good sign.

Hahahahahahahaha!

Yes, RASM up 2% is awesome.

Until you get to the line further down in the financials and you see this:

CASM UP 5.3%

D'oh!

  

Virgin should christen its next Airbus the "RMS Titanic"

D'oh!

  
 
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jfklganyc
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 11:57 am

"Cost control: Operating expense per available seat mile excluding fuel (ex-fuel CASM) increased by 1 percent in the quarter, driven by significant investment in growth (training newly hired teammates, aircraft in modification and reservations system changeover). "


This is most concerning. Very concerning as a matter of fact. At this point, they are growing enough that costs should be absorbed by the growth. It is when you stop growing that your costs start to rise if you don't watch them...see B6.


"It takes money to make money. If VX can grow large enough to build an attractive network with multiple daily flights they can start attracting high yield business customers which pushed up margins (Which is one of their problems) "


Nah, I don't buy that. It sounds like a gambler. It takes smart money to make money. The closest airline to VX we have seen is B6. They were profitable while growing until the growth got so out of control, that they started to lose operational control and lost money. VX has yet to make a dime....which is not where they should be right now.

"Typical!!

I knew as soon as i read this the HATERS would feed like rats. VX is a great airline and doing great things. They are very close to a profit im sure "


Don't label people haters. People are having a bad reaction again because they are seeing VX lose money again. I for one like the airline as they service my airport well. That said, take your head out of the sand, lose the emotions and see this:


-18% Operating margin, vs -14% last year

They are NOT close to a profit.
 
lucky777
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 12:44 pm

I hate to sound pessimistic, but at some point they'll need to turn a profit to prove their viability. At this point it doesn't look like they're even close to reaching that milestone. What's most disconcerting is the fact that VX lost $49 million in one quarter and is only sitting on $110 million in unrestricted cash. Not much of a cushion when your burning over $15 milion per month.
 
deltal1011man
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 1:16 pm

Quoting nwadtwe16 (Reply 8):
VX is a great airline and doing great things.

no they are digging themselves more into a hole. Note the -18% vs -14% operating margin.

IMO the US market place still has to much capacity. If Virgin is still around in 5 years I would be pretty surprised.

Quoting jfklganyc (Reply 13):

This is most concerning. Very concerning as a matter of fact. At this point, they are growing enough that costs should be absorbed by the growth. It is when you stop growing that your costs start to rise if you don't watch them...see B6.

        
New airliners.net web site sucks....
Also the mods want to kill free speech and prevent people from saying things like the above. Better say nothing about awesomeness for this place or else!
 
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Polot
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 1:21 pm

Quoting F9animal (Reply 11):
If fuel drops another 20%, I bet VX would be spitting profits like crazy.

Not really saying that much, if fuel drops another 20% most US airlines would probably be spitting profits like crazy and using the opportunity to be more aggressive with competition such as VX.

[Edited 2012-07-04 06:22:34]
 
hiflyeras
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 4:45 pm

VX could be doing worse. They have the advantage of AA's bankruptcy and UA/CO's poor inflight product (lack of wifi among that) and uncanny ability to piss off their customers. Their other competitors such as WN and AS are profitable even during the hard times whereas VX is not, even with a lower CASM. With fuel coming down dramatically they'd better show a 3rd quarter profit or they likely never will.
 
usflyer msp
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 5:10 pm

I am not surprised to see the losses as I thought VX had a silly business plan from the beginning. [sarcasm] Gee, lets throw more capacity on already hyper competitive routes like LAX/SFO-JFK. We will make a ton of money! [sarcasm off] As their DFW experience has shown, there is some potential in less-competitive markets (I suspect that PHL and FLL will be successful as well). Unfortunately, the bulk of their capacity remains in the hyper competitive portions of the network where they will never have enough critical mass to be successful.
 
phxa340
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 5:20 pm

Quoting SuperDash (Reply 12):

I never understand why VX attracts so many individuals who call for the end of this company. Starting and maintaining an airline is incredibly capital intensive - meaning yes , you dump at ton of money into it , then dump even more.

I gave this example in another VX thread, Sirius XM radio hasn't turned a profit in year but investors continue to pour money into based on the future returns you plan on getting. Launching satellites is expensive and competing against FM , Pandora, AM , CDs and MP3s is a crowded field. But Sirius now has those capital expenditures completed so they can focus on returning profits. VX is doing the same thing right now , investing in new aircraft , routes , facilities and as VXCabincrew pointed out - Sabre.

I have made my feelings clear that VX financials have areas of serious concern however , it is wayyyy to early to start calling for the demise of this company. Wait for their capital expenditures to start paying off.

Quoting SuperDash (Reply 12):
Virgin should christen its next Airbus the "RMS Titanic"

Poor use of that description sir when were talking about an aircraft. Jet Blue lost money in 05 and 06 (Yes it was less than VX but still) and no one was calling for its demise. Plus they had the luxury of tapping financing by offering stock. VX is doing this privately which makes their growth that much more remarkable.
 
JBLUA320
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 5:32 pm

Quoting phxa340 (Reply 19):

Poor use of that description sir when were talking about an aircraft. Jet Blue lost money in 05 and 06 (Yes it was less than VX but still) and no one was calling for its demise. Plus they had the luxury of tapping financing by offering stock. VX is doing this privately which makes their growth that much more remarkable.

The difference is that B6 went from making money to a period of uncontrollable growth and managed to fix the problem to return to profitability within 2 years. VX has never made a profit in over 5 years and while a 2% RASM improvement is beneficial, it's cannot stand alone when it comes tied to a 5% CASM increase. VX has fairly disciplined cost control so where are they going to streamline costs enough to balance the revenue environment and make money?

I'm hoping for the best for VX - they have wonderful people working for them who have put a lot of time and effort into making the VX experience a very positive one for customers. I think they can do it... but goodness, when??
 
atlflyer
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 6:00 pm

Why can't VX join an alliance? I would choose them domestically everytime.
 
usflyer msp
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 6:08 pm

Quoting Atlflyer (Reply 21):
Why can't VX join an alliance? I would choose them domestically everytime.

Why would an alliance want them? Their route network adds nothing that the existing US members don't already cover.
 
SuperDash
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 9:05 pm

Quoting phxa340 (Reply 19):
I never understand why VX attracts so many individuals who call for the end of this company.

I don't understand why so many people think they are doing great. They say anything to may it sound like life is good. But when you read their financials....   

While I am not calling for their end, I believe they are closer to the Chapter 11 side of life than they are from the huge success side of life; contrary to the wildly positive spin they are putting on their (lack of) earnings.
 
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OzarkD9S
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 9:27 pm

While I certainly wish for VX to succeed, and wish nothing but the best for their employees, this airline is looking more and more like a vanity project than anything else. Heck, even Donald Trump bailed on his airline and his ego knows no bounds.
Next up: STL-CVG-MKE-MSP-STL.
 
milemaster
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 10:32 pm

Quoting phxa340 (Reply 19):

I never understand why VX attracts so many individuals who call for the end of this company.

It's really odd isn't it? Not sure why anyone without an agenda would be against an airline bucking the trend and trying to innovate a better flying experience in today's world of reduced frills.
 
XT6Wagon
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 10:53 pm

Quoting milemaster (Reply 25):
It's really odd isn't it? Not sure why anyone without an agenda

Its really odd that people are pushing for the survival of an airline that was created to bring about the destruction of one or more existing american airlines. Nevermind that its application for an operating certificate was put in while they KNEW they were in violation of american laws regarding the ownership and control of american flagged airlines. That they continued to work hard to begin operations while in violations of the clear letter of these laws. It kinda boggles my mind that they ever got approval after the repeated attempts to slide one past the regulators. "no no, it was only THIS law we were trying to cheat on. All those other laws and regulations we will follow 100%"

I would think anyone anywhere should be within thier rights to "hate" an airline that was built to illegally run other airlines out of operation. Regardless thats not what was happening in this thread so it doesn't even matter.
 
avek00
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 11:03 pm

Quoting milemaster (Reply 25):

VX adds nothing useful to our skies. NOTHING AT ALL. The numbers make clear it's nothing more than a parasite folly. In fact, the money that UA and AA have to spend/leave on the table to keep the Virgin parasite quarantined is money that could be otherwise invested in both airlines' product improvement plans.
Live life to the fullest.
 
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LAXintl
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RE: VX Reports First Quarter 2012 Results

Wed Jul 04, 2012 11:24 pm

Quoting XT6Wagon (Reply 26):
It kinda boggles my mind that they ever got approval after the repeated attempts to slide one past the regulators.

Lets get this clear again.

Virgin America is a AMERICAN COMPANY. Its based in the US, and employs 2,600 Americans.

Last I checked, neither AA, DL, UA or any US airline had an issue with selling shares to foreign citizens up to the 25% threshold. For example AA's 3rd largest shareholder is a Malaysian.

Quoting avek00 (Reply 27):
VX adds nothing useful to our skies. NOTHING AT ALL.

You should really get out and fly them.

They are a fresh breath of air, in a stale non customer friendly US airline industry. They have a great product, employees and service delivery.

The AA, DL, and UA dinosaurs of the world should learn a thing or two. Maybe if they did they would not be in the mess they are, and there would be no need for new progressive airlines to so easily need to fill the void and compete against them.
From the desert to the sea, to all of Southern California
 
MaverickM11
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RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 12:25 am

Quoting LAXintl (Reply 28):
The AA, DL, and UA dinosaurs of the world should learn a thing or two. Maybe if they did they would not be in the mess they are, and there would be no need for new progressive airlines to so easily need to fill the void and compete against them.

What would they learn? Why would they look at a carrier whose operating margin is -18%? Wouldn't they look to NK/AS/G4, whose operating margins are in the double digits--positive double digits? Even in 2001/2002 US wasn't losing money at the rate VX is.

Quoting phxa340 (Reply 19):
I gave this example in another VX thread, Sirius XM radio hasn't turned a profit in year but investors continue to pour money into based on the future returns you plan on getting.

What future returns? No one wants to pay for content, and yet there's still loads of competition producing content, even free content. Where is the upside for Sirius? Same goes for VX?

Quoting HiFlyerAS (Reply 17):
They have the advantage of AA's bankruptcy

That's a mixed blessing since AA will exit bankruptcy with leaner costs, again chipping away at any cost advantage VX has.
E pur si muove -Galileo
 
santi319
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RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 12:38 am

VX is a proof that contrary to A-Net's popular belief, Customers really don't give a damn about anything but the ticket price and will gladly just fly whoever is cheaper. So yeah they're awesome but Pax don't even know who is who, so they might as well change their business model if they are planning to make money in this millennium.
 
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LAXintl
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RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 12:46 am

Quoting MaverickM11 (Reply 29):
What would they learn?

How about simple things like service delivery.

Each legacy airlines make a lot of noise about being friendly, have great products, offer the best XYZ, but when it comes down to it they could all learn a thing or two about how to treat customers from the likes of VX, B6 and others.

And I say this as a decade long UA 1K and AA EXP customer. What you get on someone like VX is literaly day and night - and it starts with the most basic thing like a no-cost employee hello and smile.

I could only wish that likes of VX, B6, SWA ruled the industry and flew to every corner of the country I needed to go. Until such I guess I am still stuck putting up with the medicore legacy players.
From the desert to the sea, to all of Southern California
 
avek00
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RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 12:48 am

Quoting LAXintl (Reply 28):

I have no good reason to ever fly Virgin America. When I need to fly to SFO, I do so on United, which has many aircraft that offer an experience and amenities equal to or superior than VX, with competitive pricing and a superior network to boot.

And as others correctly noted, VX's offerings don't mean squat if the airline consistently fails to earn an operating profit year after year. Like other supposedly innovative parasites that came before it, like Independence Air, VX merely forces stronger carriers to waste resources on quarantining it instead of investing further in their own products.
Live life to the fullest.
 
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LAXintl
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RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 1:05 am

Why would profitability make or break the worthiness of a company ? Look at companies like Go-Go, Twitter, Sprint, RIM (Blackberry) all printing red ink today, but people seem to think they are worthy. Hardly "parasite" to millions and millions around the world.
I'd add if not for investors willing to sink their in dollars, euros, pounds, or yens at loss making ventures, we would not have some of the most respected and iconic world enterprises around today.


Anyhow, each to his own. I forgo free F class upgrades on likes of UA, to fly VX Y class. Its simply a superior all-round travel experience, which I am more than happy to avail myself to when possible.
From the desert to the sea, to all of Southern California
 
deltal1011man
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RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 1:21 am

Quoting LAXintl (Reply 28):

The AA, DL, and UA dinosaurs of the world should learn a thing or two. Maybe if they did they would not be in the mess they are, and there would be no need for new progressive airlines to so easily need to fill the void and compete against them.

haha. So Delta and United should walk away from Billions in profits and get a nice NEGATIVE 18 operating margin?

Jeesh you must be just rolling in money. That is the only way i could see someone wanting to see US carriers taking a loss. (or your bias is getting in the way of logic.)
New airliners.net web site sucks....
Also the mods want to kill free speech and prevent people from saying things like the above. Better say nothing about awesomeness for this place or else!
 
hiflyeras
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RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 1:39 am

Quoting santi319 (Reply 30):
VX is a proof that contrary to A-Net's popular belief, Customers really don't give a damn about anything but the ticket price and will gladly just fly whoever is cheaper. So yeah they're awesome but Pax don't even know who is who, so they might as well change their business model if they are planning to make money in this millennium.

Exactly. Look at the success of NK and G4. People don't give a damn who's name is on the side unless they're frequent fliers racking up miles and looking for status or they don't have an alternative out of their nearest airport. It's been said before....the airline industry is littered with the carcasses of those that came before, promising better inflight service and amenities albeit at a higher price. It's the lowest common denominator that succeeds....and the lowest fare is king. Virgin Atlantic started out as an alternative to BA...promising better service and amenities. BA is still around and VS today is no different than any other airline.
 
avek00
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RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 2:46 am

Quoting LAXintl (Reply 33):

Because corporations exist for the primary purpose of making a profit?
Live life to the fullest.
 
flyguy89
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RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 3:17 am

Quoting avek00 (Reply 27):
VX adds nothing useful to our skies. NOTHING AT ALL. The numbers make clear it's nothing more than a parasite folly. In fact, the money that UA and AA have to spend/leave on the table to keep the Virgin parasite quarantined is money that could be otherwise invested in both airlines' product improvement plans.

Wow, just wow, not even a coherent argument but rather an emotionally charged, irrational outburst offering nothing to support what you throw out there. Not sure how some one could be THAT emotionally vested in hating a company unless they've been laid off or fired by them. They're a business offering a service, they will continue to exist as long as there are investors who see potential or long-term value in the company, simple as that.

Quoting santi319 (Reply 30):
VX is a proof that contrary to A-Net's popular belief, Customers really don't give a damn about anything but the ticket price and will gladly just fly whoever is cheaper. So yeah they're awesome but Pax don't even know who is who, so they might as well change their business model if they are planning to make money in this millennium.

So because they're not profitable at the moment it suddenly makes it an absolute that people don't care about service and invalidates their business plan? What would it mean then if they were profitable next quarter? Majors like DL and AA have, on a net-net basis, lost more money in their history of existence than they've made...does that somehow make them now not viable according to your logic?


Quoting avek00 (Reply 32):
VX merely forces stronger carriers to waste resources on quarantining it instead of investing further in their own products.

You've repeatedly used the phrase that the majors have to "quarantine" VX, implying if they didn't do that then VX would "metastasize" and grow....well if they're such a miserable "parasite" and abject failure as you say, then why do the majors need to concern themselves with "quarantining" VX and suppressing their growth?
 
MaverickM11
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RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 4:16 am

Quoting LAXintl (Reply 31):
How about simple things like service delivery.

MGM Grand Air could have taught them that, or Midwest Express, or Legend, or Eos, or Maxjet, or any number of other failed carriers. I think everyone would agree that service could improve on most carriers, but to what benefit? VX has the best product, perhaps the best service, some of the lowest costs, and it's still losing more money than any carrier in recent memory.

Quoting LAXintl (Reply 33):
Why would profitability make or break the worthiness of a company ?

Because w/o very good (rich) friends you won't be around for long if you're not profitable.

Quoting flyguy89 (Reply 37):
Majors like DL and AA have, on a net-net basis, lost more money in their history of existence than they've made...does that somehow make them now not viable according to your logic?

It means that if they tweeted more they'd be hailed as "so innovative" 
Quoting flyguy89 (Reply 37):

So because they're not profitable at the moment

At the moment they've lost probably about $750MM

Quoting flyguy89 (Reply 37):
people don't care about service and invalidates their business plan?

People do care about service; they're just not willing to pay for service. It's kinda like journalism; everyone wants better quality stories but no one is willing to pay up for the journalists to write them. The business plan was essentially to add more capacity to an over-saturated industry by investing in a product that no one is willing to pay for, and well obviously it's been a home run so far
E pur si muove -Galileo
 
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EA CO AS
Posts: 13628
Joined: Wed Nov 14, 2001 8:54 am

RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 9:37 am

Quoting HiFlyerAS (Reply 17):
VX could be doing worse.

And yet, in today's climate, they should be doing far, far better - yet they're not.

I don't wish the people of VX ill - I have friends who work there - but they've already harvested all of the low-hanging, high-yield, low-CASM, long stage-length fruit they can and are running with high load factors, yet they're still running at a high negative double-digit operating margin, even as fuel prices are plummeting.

That's not good, no matter how you spin it, especially as they have more aircraft coming and are scratching their collective heads on how to deploy them. From here out, it only gets tougher, kids.

This company needs to get its act together. Fast.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
aviators99
Posts: 37
Joined: Mon May 19, 2008 6:41 pm

RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 1:44 pm

Quoting jblua320 (Reply 20):
I never understand why VX attracts so many individuals who call for the end of this company.

It's usually union workers calling for the end of a non-union business.
 
Bobloblaw
Posts: 1680
Joined: Fri Jan 13, 2012 1:15 pm

RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 1:48 pm

Quoting MaverickM11 (Thread starter):
-18% Operating margin, vs -14% last year.

Their breakeven LF must be over 100%
 
FlyPNS1
Posts: 5287
Joined: Wed Dec 01, 1999 7:12 am

RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 2:04 pm

Quoting MaverickM11 (Reply 38):
Because w/o very good (rich) friends you won't be around for long if you're not profitable.

The legacy carriers of the past 30 years are certainly evidence of this.

Quoting EA CO AS (Reply 40):
but they've already harvested all of the low-hanging, high-yield, low-CASM, long stage-length fruit they can and are running with high load factors, yet they're still running at a high negative double-digit operating margin, even as fuel prices are plummeting.

Fuel prices were not plummeting in the 1st quarter which is the time frame of these results.

It's true that VX needs to get it's act together, but as long as they have people willing to invest, they will survive. So far, they seem to keep finding investors.
 
hiflyeras
Posts: 1514
Joined: Thu Jul 14, 2011 6:48 pm

RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 2:08 pm

Quoting aviators99 (Reply 41):
It's usually union workers calling for the end of a non-union business.

I'll admit it...I'm one of the people questioning VX's business plan. I've been in the airline industry for over thirty years and I belong to a union.

Companies that constantly operate at a loss are not only hurting themselves (or I should say their investors) but others as well. That's why the practice known as dumping is generally illegal....but not in the airline business. VX, in their quest for market share, started out with unrealistic fares. They are now charging a higher fare (they had no choice) and are consequently getting their RASM up but yet they still lose money. They seem to be co-existing with their competitors but they're certainly not showing any movement towards long-term viability or profitability with their continued losses. If their growth is slowing then their CASM will go up....these are actually the best of times for VX. Not a good omen.
 
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jfklganyc
Posts: 4074
Joined: Mon Jan 05, 2004 2:31 pm

RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 2:31 pm

"It's really odd isn't it? Not sure why anyone without an agenda would be against an airline bucking the trend and trying to innovate a better flying experience in today's world of reduced frills."

About me:

1. Non union
2. Agree that VX is a US company
3. Like the VX product
4. Like the fact that they serve my home airport well


But I disagree with what you said above. This company is not solvent and its long term prospects are downright grim.

And just because I say that doesn't mean I have an agenda or am a hater.

What I am saying...if I was a pilot for this airline, I would have my apps in at other carriers.

Now, you may not agree with my opinion...but my opinion is only as valuable as yours is.
 
MaverickM11
Topic Author
Posts: 15455
Joined: Thu Apr 06, 2000 1:59 pm

RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 2:38 pm

Quoting FlyPNS1 (Reply 43):
The legacy carriers of the past 30 years are certainly evidence of this.

Well that's what happens when you throw carriers protected by decades of regulated costs and revenue into no-holds-barred competition. Were they able to start from a clean slate, like VX, they would have done things differently. Even WN who never had to deal with regulation is hitting a wall.
E pur si muove -Galileo
 
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LAXintl
Posts: 20472
Joined: Wed May 24, 2000 12:12 pm

RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 2:51 pm

Quoting avek00 (Reply 36):
Because corporations exist for the primary purpose of making a profit?

Sure, that is the idea, but since is there a rule one must do so in X amount of time ?

Look at other companies - power house Apple lost money and was barely threading along for its first 12-years of existence. Today we have Go-Go around 5 years just like VX, it has massive hundreds million losses, but investors keep pouring new money into the company, how about Twitter going on 6 years - also not a penny in profit, but who manages to pick up investors left and right including $300mil from overseas recently.


Anyhow if you buy the notion that the company is more a foreign entity part of a larger multinational - then as part of the 400+ Virgin Group companies, maybe VX might never need to make money ever. Its quite common for multinationals from Proctor & Gamble to Coca Cola to have entire divisions that don't make money, but provide other value to the larger group.


Anyhow, yes you can continue to hate VX, however there certainly are enough Americans out there that believe in it, and are willing to back it up with their cash. The beauty of our capitalist system.
From the desert to the sea, to all of Southern California
 
phxa340
Posts: 987
Joined: Thu Mar 29, 2012 4:07 am

RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 2:54 pm

Quoting HiFlyerAS (Reply 44):

VX is hardly product dumping. They don't have enough capacity to dramatically influence prices at this time. Long term viability in the airline industry partly means having a loyal customer base and a solid network - two things VX keeps growing.

Quoting jfklganyc (Reply 45):
This company is not solvent and its long term prospects are downright grim.

As a privately held company, you and I will never know if it is solvent or not. Privately held companies like VX typically keep little cash on hand as they can get more from the investors when they need it. You say downright grim and you could be completely correct however I say the more customers the legacies irritate and the larger the VX network grows, its prospects rise.

Quoting LAXintl (Reply 33):
Why would profitability make or break the worthiness of a company ? Look at companies like Go-Go, Twitter, Sprint, RIM (Blackberry) all printing red ink today, but people seem to think they are worthy. Hardly "parasite" to millions and millions around the world.
I'd add if not for investors willing to sink their in dollars, euros, pounds, or yens at loss making ventures, we would not have some of the most respected and iconic world enterprises around today.

   This is the point I was trying to make with Sirius/XM .... cashflow doesn't mean everything in the short term. Give VX time.
 
MaverickM11
Topic Author
Posts: 15455
Joined: Thu Apr 06, 2000 1:59 pm

RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 3:01 pm

Quoting phxa340 (Reply 48):
This is the point I was trying to make with Sirius/XM .... cashflow doesn't mean everything in the short term. Give VX time.
Quoting LAXintl (Reply 47):
Anyhow, yes you can continue to hate VX, however there certainly are enough Americans out there that believe in it, and are willing to back it up with their cash.

Arguably the same thing could be said for the big bad legacy carriers, no?
E pur si muove -Galileo
 
phxa340
Posts: 987
Joined: Thu Mar 29, 2012 4:07 am

RE: VX Reports First Quarter 2012 Results

Thu Jul 05, 2012 3:12 pm

Quoting MaverickM11 (Reply 49):
Arguably the same thing could be said for the big bad legacy carriers, no?

Yes and the legacy carriers have been and will be around for quite some time .... possibly like VX one day  

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