phxa340
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Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 5:49 am

Rumor : A few sources have said that VX has been given the ultimatum of turning a profit in 1 year or they will be shut down by the investors. The sources also said that all new plane orders are going to start being deferred and or cancelled. Anyone hear anything like this ?

We all know VX is struggling but Cush keeps promising profits that never come. Not sure what is next for this company.
 
PlanesNTrains
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 6:32 am

It would be good to know who the sources are. That would seem like information that would be privy to very few people.

-Dave
-Dave
 
LV
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 7:06 am

If it's true I think it might be DL's newest source of slightly used planes. Second hand 320's anyone?      
 
BestWestern
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 7:10 am

This kind of information would be known by very very few people, as this kind of competitive information would be manna to the competition - one year of heavy losses on certain routes, such as LAX JFK would result in future years of less competitive profits.

I call false on the rumor.
You are 100 times more likely to catch a cold on a flight than an average person!
 
anstar
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 7:36 am

Why would the board have approved and expansion strategy - keeping in mind that it costs money to expand as new routes don't turn a profit overnight?
 
eastalt
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 10:24 am

Would a merger between Virgin and Frontier solve some of thier problems. They use the same reservations system, have the same fleet. They could delay aircraft deliveries and save some money. At the same time they could grow and save money by merging stations.
 
koruman
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 10:39 am

I would be very, very surprised.

Pretty much everyone outside the USA recognises that all the legacy carriers have a horribly and eternally flawed business model, in which they try to raise all sorts of ancillary revenue to partially offset that they give all their most profitable seats away as upgrades instead of selling them. This leaves them on a never-ending roundabout of endless cycles into bankruptcy.

Virgin America is the only carrier in the USA which adheres to the basic fundamentals of running a business. I'd be disappointed if they fail.
 
kl911
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 11:49 am

Quoting koruman (Reply 6):
Pretty much everyone outside the USA recognises that all the legacy carriers have a horribly and eternally flawed business model, in which they try to raise all sorts of ancillary revenue to partially offset that they give all their most profitable seats away as upgrades instead of selling them. This leaves them on a never-ending roundabout of endless cycles into bankruptcy.

Main problem is that the legacy carriers staff is way to expensive. They should focus on bringing that back in line with the rest of the world.
 
bobnwa
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 11:54 am

Quoting eastalt (Reply 5):
Would a merger between Virgin and Frontier solve some of thier problems. They use the same reservations system, have the same fleet. They could delay aircraft deliveries and save some money. At the same time they could grow and save money by merging stations.

I don't think merging two companies with financial problems would be a good fit.
 
ual777
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 12:36 pm

Quoting koruman (Reply 6):

Then why are the US legacies outperforming almost all foreign airlines with the exception of EK? Yes domestic upgrades are free, but many seats are still bought, upgrades purchased, and many of those being upgraded are on full fare onomy tickets.

Quoting kl911 (Reply 7):

The salaries are already in line.


VA is simply being squeezed by the competition.
It is always darkest before the sun comes up.
 
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kc135topboom
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 12:44 pm

Quoting anstar (Reply 4):
Why would the board have approved and expansion strategy - keeping in mind that it costs money to expand as new routes don't turn a profit overnight?

Their DFW-LAX and DFW-SFO routes (both started in Dec. 2010) seem to be their most profitable routes to date. However investors are still bailing out on them as they have not (yet) made any real money.

Quoting LV (Reply 2):
If it's true I think it might be DL's newest source of slightly used planes. Second hand 320's anyone?

I doubt DL would be interested in the used A-320s or A-319s. DL has a large fleet of new build B-737-800s, and a smaller fleet of B-737-700s (as well as 100 B-737-900ERs on order). DL will be phasing out their NW aquired A-320s and A-319s soon and looks like they will settle on the B-737NG/MAX types in their fleet.
 
michman
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 12:58 pm

Quoting koruman (Reply 6):
Virgin America is the only carrier in the USA which adheres to the basic fundamentals of running a business.

Actually making money is generally considered to be a basic fundamental of running a business.
 
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gdg9
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 1:19 pm

Quoting KC135TopBoom (Reply 10):
DL will be phasing out their NW aquired A-320s and A-319s soon

Oh? When? I hadn't heard this.
@dfwtower
 
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usdcaguy
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 1:26 pm

Quoting koruman (Reply 6):
they try to raise all sorts of ancillary revenue to partially offset that they give all their most profitable seats away as upgrades instead of selling them.

You're kidding, right? They do NOT give their most profitable seats away, they just happen to be in economy. The problem is that very few, if any, passengers are willing to pay for First Class within the US apart from transcontinental routes. If they aren't given out, the carriers do sell first class, but it is in the form of upgrades; many times, they may be sold at the airport or online as an extra to one's flight, and that in turn generates income for the airline. The problem that legacy carriers in the States face is competition; it is incredibly difficult to push through industry fare increases on the front end due to price transparency, so they strive to earn revenue in more opaque channels on the back end, and that does include upgrades from time to time. Upgrades are prolific, but this is to get people flying one carrier; it is much more expensive to win new passengers over than to keep the ones you have, so giving away seats in First Class is more of a cheap marketing investment, which in turn generates future business. The growing number of elites (particularly silver) that are not upgraded on a regular basis proves that the carriers are likely benefiting from the arrangement much more than the fliers themselves.

Quoting michman (Reply 11):
Actually making money is generally considered to be a basic fundamental of running a business.

That's not true. Just ask AA.  
 
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jfklganyc
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 1:27 pm

"DL will be phasing out their NW aquired A-320s and A-319s soon and looks like they will settle on the B-737NG/MAX types in their fleet."

Will they? Or is this a.net opinion spoken as fact?

An airline the size and scope of DL, UA, AA/US can and will have multiple fleets due to the sheer vastness of the fleet. The days of a "gentlemans agreement" with B or A are over.
 
LHRFlyer
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 1:34 pm

I would caution against rumours concerning the financial viability of a company that cannot be attributed to sources.

If investors are unwilling to invest any more money in the company then the likely option is that they will seek to sell to another buyer. Shutting down an airline is an expensive (and messy) process.

If there are questions over the airline it would be interesting to see whether Virgin withdraws the brand licence beforehand to mitigate the negative brand impact.
 
Bobloblaw
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 1:55 pm

Quoting eastalt (Reply 5):
Would a merger between Virgin and Frontier solve some of thier problems

No, very different airlines. Both airlines have problems in that they have provided capacity in markets where no additional capacity was or is needed and where most of the markets were already stimulated.
 
DTWPurserBoy
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 2:05 pm

Quoting kl911 (Reply 7):
Main problem is that the legacy carriers staff is way to expensive. They should focus on bringing that back in line with the rest of the world.

The bankruptcy courts took care of that. All of the legacy carriers took huge cuts in salary and benfits.
Qualified on Concorde/B707/B720/B727/B737/B747/B757/B767/B777/DC-8/DC-9/DC-10/A319/A320/A330/MD-88-90
 
srbmod
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 2:09 pm

Considering VX is a privately owned airline, the public does not have access to their financials like those of a publicly traded company. Like Spirit, Virgin America is a privately owned airline and they do release a limited amount of financial details to the public.

If VX is looking at a potential ultimatum from its' investors, they may start to entertain merger options with another airline or perhaps sell it to another investor who may or may not retain the Virgin America name. We can easily pencil in multiple airlines that could be potential merger partners (JetBlue, Spirit, Frontier, US Airways, United, etc.), but the reality is that this is a rumor and we all know that rumors are part and parcel of the airline industry.

Could VX be gone in a year? It's quite possible. We cannot predict the future and there can always be some sort of major event that impacts the world and in particular the airline industry. Look at the number of airlines that folded in the wake of the slump in travel after 9/11 and those in the last 5 years or so for whom the spike in fuel prices coupled with the ongoing global economic issues.
 
N757ST
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 2:20 pm

Quoting srbmod (Reply 18):
Considering VX is a privately owned airline, the public does not have access to their financials like those of a publicly traded company. Like Spirit, Virgin America is a privately owned airline and they do release a limited amount of financial details to the public.

We know quite a bit about thier financials... and they are dismal. As of last quarter VX is running a 20% operating loss, which is unprecidented in this industry.

FYI, spirit is a public company under the symbol SAVE.
 
JHCRJ700
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 2:31 pm

Quoting koruman (Reply 6):
Virgin America is the only carrier in the USA which adheres to the basic fundamentals of running a business. I'd be disappointed if they fail.

VX is the best airline in the USA currently. If they go belly up it'd truly be a shame.
RUSH
 
jetfuel
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 2:37 pm

A rumour started by another airline? Dangerous stuff. BEST totally ignored
Where's the passion gone out of the airline industry? The smell of jetfuel and the romance of taking a flight....
 
srbmod
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 2:39 pm

Quoting N757ST (Reply 19):
FYI, spirit is a public company under the symbol SAVE.

I definitely missed that one.

Quoting N757ST (Reply 19):
We know quite a bit about thier financials... and they are dismal. As of last quarter VX is running a 20% operating loss, which is unprecidented in this industry.

Which is not common for privately traded companies to do, especially one that has been reporting these sort of numbers. It seems like corporate suicide, as what investment firms would be interested in investing in them with these sort of losses? In some ways, it is an embarrassment to the Virgin name until you think about all of the other business failures that the Virgin Group has put the Virgin name on...... Branson wanted a Virgin airline in the US, fought hard to get it off of the ground, and five years later the venture continues to sputter along and at some point, the investors have to decide whether this venture should be allowed to continue
 
airliner371
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 2:43 pm

Quote:
Will they? Or is this a.net opinion spoken as fact?

The -900ERs are replacing A320, A319 and 757s.
 
MaverickM11
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 3:47 pm

Quoting bestwestern (Reply 3):
This kind of information would be known by very very few people

It would be a prudent, and believable course of action. I don't know who these investors are that endlessly want to burn cash.

Quoting koruman (Reply 6):

Virgin America is the only carrier in the USA which adheres to the basic fundamentals of running a business

VX is losing more money than any carrier in recent memory (in US history?). Their business plan has zero upside any time soon. Something has to give.
E pur si muove -Galileo
 
hohd
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 4:13 pm

If the carriers adhere to stricly sell the first class seats or expensive upgrades, then you will have most first class cabins (with the exception of a few routes), going half full to nearly empty. The market demand is there only for about 25 to 50% of the seats they have. The rest they give away in upgrades (either by rewards or by status), which is a good strategy.
 
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DeltaMD90
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 4:13 pm

While I don't believe this specific rumor, I could totally see something like this happening... this carrier just bleeds money. Then again, the investors keep putting money into this airline (for some reason.) Maybe they really don't want to cut their losses and are rolling the dice on some profits
Ironically I have never flown a Delta MD-90 :)
 
ASFlyer
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 4:16 pm

Quoting koruman (Reply 6):
Pretty much everyone outside the USA recognises that all the legacy carriers have a horribly and eternally flawed business model, in which they try to raise all sorts of ancillary revenue to partially offset that they give all their most profitable seats away as upgrades instead of selling them. This leaves them on a never-ending roundabout of endless cycles into bankruptcy.

Virgin America is the only carrier in the USA which adheres to the basic fundamentals of running a business.

You clearly don't know a lot about Virgin. Virgin leads the pack in ancillary fees. They charge for checked bags, change fees, food onboard, internet onboard, upgrades, flight changes, standby... the list goes on. Virgin is running their business just like every other U.S. airline except in the smart ways. They don't have a vibrant frequent flyer program. Their onboard product in First Class is way too extravagant given the number of people that actually pay the full First Class fare. They don't have baggage or ticketing agreements with very many carriers at all - and none that make a substantial difference. They fly in markets that are already well served - some even over served. They VX plan is to flood the market with unsustainably low fares and hope that some of those folks will pay higher fares on them in time. What they've learned is what every other U.S. airline already knows - VERY few people are willing to pay a premium for a coach seat. The lowest fare is all that matters - and Virgin can't make money selling all their seats at the lowest fares. Sadly, their business plan is failing miserably.
 
burnsie28
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 4:56 pm

Quoting airliner371 (Reply 23):
The -900ERs are replacing A320, A319 and 757s.

Given that the 739 is nearly 40-50 seats larger than the Airbus series, and the Airbus' are larger than the 737 fleet, thats not exactly true. The 739 will be more likely to replace the 757 directly as it will seat as many or more than the 752. Also the press release never states A319, and says "some A320's"
 
smpplnohow2fly
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 4:58 pm

Quoting airliner371 (Reply 23):
The -900ERs are replacing A320, A319 and 757s.

No they arn't! They are replacing aging A320s, 757s, and 767s....plz check your sources before you post false statements.

http://news.delta.com/index.php?s=43&item=1428
The beginning is the end is the beginning
 
drerx7
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 5:01 pm

Quoting koruman (Reply 6):
Virgin America is the only carrier in the USA which adheres to the basic fundamentals of running a business.

Wrong. They haven't been able to make any money.

Question. Would expansion into more routes at this juncture be the solution? I've always felt that they have remained stagnant for too long and the routes they did try are ones that are hypercompetitive - except for Dallas.
Third Coast born, means I'm Texas raised
 
will777
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 5:26 pm

Quoting drerx7 (Reply 32):
Question. Would expansion into more routes at this juncture be the solution? I've always felt that they have remained stagnant for too long and the routes they did try are ones that are hypercompetitive - except for Dallas.

I would add in the PHL routes as well. Any chance we could see them doing some expanding outside of LAX/SFO?
 
N505fx
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 5:33 pm

Quoting koruman (Reply 6):
Virgin America is the only carrier in the USA which adheres to the basic fundamentals of running a business. I'd be disappointed if they fail.

Well, except for the legacies making money and VX losing money - but if you discount making a profit as the basic fundamental of running a business, sure VX is doing something better than the legacies. I am glad
 
wedgetail737
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 5:34 pm

Quoting JHCRJ700 (Reply 20):
VX is the best airline in the USA currently. If they go belly up it'd truly be a shame.

Unfortunately, the best airline in the nation doesn't necessarily mean profits.
 
airliner371
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 5:59 pm

Quote:
No they arn't! They are replacing aging A320s, 757s, and 767s....plz check your sources before you post false statements.

http://news.delta.com/index.php?s=43...=1428

I am sorry we all don't make mistakes.

[Edited 2012-09-16 11:49:48]
 
Viscount724
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 6:18 pm

Quoting LHRFlyer (Reply 15):
Shutting down an airline is an expensive (and messy) process.

Not that messy or expensive for a small carrier with leased aircraft that will quickly find new homes. Look at the dozens of carriers that have shut down. It's much better to shut down in an organized way without hanging on until you run out of cash and go bust, with customers holding worthless tickets.
 
B777LRF
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 6:33 pm

Quoting airliner371 (Reply 36):
Honestly you need to calm down. I am sorry we all don't make mistakes. To start yelling me after one mistake is just wrong.

Uhh, aren't we a special little flower.

The only thing wrong here is you sprouting false information, information you yourself could have easily fact checked. But you didn't, and by failing to do so you come across not as someone with information worth sharing, but someone with an agenda to ride.

We all make mistakes, the adult thing to do when being made aware of that is to accept being wrong and, if necessary, apologise. You didn't do that either, instead you launched an attack on the person who called you out.
From receips and radials over straight pipes to big fans - been there, done that, got the hearing defects to prove
 
peachair
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 6:49 pm

Quoting LV (Reply 2):
If it's true I think it might be DL's newest source of slightly used planes. Second hand 320's anyone?

Not with this many airplanes on order. The 717 will fill the voids DL needs in the A319 market, and the second hand MD-90's will fill the other narrowbody voids.

Quoting koruman (Reply 6):
Pretty much everyone outside the USA recognises that all the legacy carriers have a horribly and eternally flawed business model, in which they try to raise all sorts of ancillary revenue to partially offset that they give all their most profitable seats away as upgrades instead of selling them. This leaves them on a never-ending roundabout of endless cycles into bankruptcy.

I would say 10 -15 years ago you may have been right. It's a different story now. I would like to know what endless cycles you are referring to. There has been really only one big BK cycle for the legacy carriers post- Lorenzo.

Quoting KC135TopBoom (Reply 10):
DL will be phasing out their NW aquired A-320s and A-319s soon and looks like they will settle on the B-737NG/MAX types in their fleet.

I dont know where you are getting that info - it is totally false. The 737-900NG will be replacing aging MD-88 and B757's

Quoting jfklganyc (Reply 14):
An airline the size and scope of DL, UA, AA/US can and will have multiple fleets due to the sheer vastness of the fleet. The days of a "gentlemans agreement" with B or A are over.

Totally right about that - the aircraft manufacturer loyalty program is gone for legacy carriers

Quoting burnsie28 (Reply 30):
Given that the 739 is nearly 40-50 seats larger than the Airbus series, and the Airbus' are larger than the 737 fleet, thats not exactly true. The 739 will be more likely to replace the 757 directly as it will seat as many or more than the 752. Also the press release never states A319, and says "some A320's"

Thanks for paying attention to the details, this is exactly correct.
 
XT6Wagon
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 7:18 pm

back on topic, while we don't have "proof", VX has already had one crisis with its investors. One that was rumored to only have been solved with some heavy financial backing from the UK in the event VX went under and a healthy garrenttee on the return the US investors would see.

This might simply be no more than the end of that deal and the end of Branson's willingness to put his money and his word up to back it. So VX must get to a state where they can secure the investors needed with normal terms and rates. In todays economy, thier small size, and the low number of years is all going to make a profit a requirement IMO. If you want to roll the dice, AA, UA, or DL all offer much higher possible rewards for somewhat less risk.
 
usa330300
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 7:57 pm

Quoting ual777 (Reply 9):
The salaries are already in line.

Really? An 11 year FA at US Airways brings in maybe $30k/year. That is abysmal. I would say the salaries are way out of line.
 
milemaster
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 8:00 pm

It's well known that VX plans to IPO in the coming months, yet the private investors all colluded to give an ultimatum to the VX board that they have 1 year to make a proft? That makes no sense.

Someone who "works on wall street" doesn't have any more insight than anyone else on this matter.
 
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Acey559
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 8:43 pm

I recently spoke with a VX pilot, and while not always a reliable source, he seemed to make sense. He said management recently sent out an email and said the predominate reason for their losses is their aggressive expansion. According to him, the current routes are making good money, but it's difficult to turn a profit given how quickly they're opening new routes. They're supposedly slowing growth soon to allow markets to mature. I'm not sure how much of this is actually true, but it's what I've been told.
 
brilondon
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 8:45 pm

Quoting phxa340 (Thread starter):
Rumor : A few sources have said that VX has been given the ultimatum of turning a profit in 1 year or they will be shut down by the investors. The sources also said that all new plane orders are going to start being deferred and or cancelled. Anyone hear anything like this ?

We all know VX is struggling but Cush keeps promising profits that never come. Not sure what is next for this company.

This is interesting. I would like to see the source of this information, not that I doubt you, but to see what else is being said and by who.
Rush for ever; Yankees all the way!!
 
SWALUV
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 9:20 pm

Quoting KC135TopBoom (Reply 10):
If it's true I think it might be DL's newest source of slightly used planes. Second hand 320's anyone?

Would AA go for these as there A320's will be coming a little late? Or maybe there A319's at least?
 
roseflyer
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 9:21 pm

Fares have been rebounding drastically and are significantly up this year over last year. Virgin cherry picks large capacity routes, so they face stiff competition, but I'd still expect that they should be able to earn profits with the airlines earning record profits this year. The airline industry is not in recession. Every airline except American are posting 5-10% profits and record revenue figures. If VX can't make money in this climate, then they shouldn't be in business.

Quoting koruman (Reply 6):
Pretty much everyone outside the USA recognises that all the legacy carriers have a horribly and eternally flawed business model, in which they try to raise all sorts of ancillary revenue to partially offset that they give all their most profitable seats away as upgrades instead of selling them. This leaves them on a never-ending roundabout of endless cycles into bankruptcy.

Virgin America is the only carrier in the USA which adheres to the basic fundamentals of running a business. I'd be disappointed if they fail.

That is certainly your opinion and I've seen you voice it. First off, your comment of giving away all their most profitable seats is not true. UA for example who is VX's biggest competition is averaging less than 50% upgrade seats. A look through their financial statements shows that first class travel has rebounded significantly with a combination of higher economy fares, lower first class fares and more first class award tickets.
If you have never designed an airplane part before, let the real designers do the work!
 
ASFlyer
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 9:39 pm

Quoting usa330300 (Reply 41):
Really? An 11 year FA at US Airways brings in maybe $30k/year. That is abysmal. I would say the salaries are way out of line.

Based on the 2004 contract, an 11 year FA at US Airways makes 38.82 per flight hour with a 71 hour guarantee. That equates to somewhere just north of $33,000 per year. That doesn't include any additional pay for delays, senior pay, per diem and whatever additional pay you might get and it's presuming that you fly only 71 hours a month, which is probably on the low end for most FA's. I have to imagine that the reality is that an 11 year FA is probably bringing in around $45,000 per year or more. As I said in the beginning, that's based on the 2004 contract. I imagine the latest agreement had some increases in it. I'm not saying that $33,000 base pay is really what an 11 year FA should be making but if you want to argue on behalf of FA's it's probably best to start with facts so that you hold some credibility.

[Edited 2012-09-16 14:41:12]
 
deltal1011man
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 10:32 pm

Quoting koruman (Reply 6):

Virgin America is the only carrier in the USA which adheres to the basic fundamentals of running a business. I'd be disappointed if they fail.

......yes they are showing the others how to lose money hand over fist even if they have some of the lowest cost out there. Are you kidding me?

Quoting jfklganyc (Reply 14):
Will they? Or is this a.net opinion spoken as fact?

320s(most) will be replaced by 739s.

Quoting jfklganyc (Reply 14):

An airline the size and scope of DL, UA, AA/US can and will have multiple fleets due to the sheer vastness of the fleet. The days of a "gentlemans agreement" with B or A are over.

not really. Regardless of how big the airline is, it is going to be cheaper to have 500 737s vs 250 737s and 250 32S. I think once consolidation calms down fleet types will be thinned.
New airliners.net web site sucks.
 
phxa340
Topic Author
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 10:42 pm

Quoting milemaster (Reply 42):
It's well known that VX plans to IPO in the coming months

They said this in early 2012. With that being said Cush also said "Virgin America aims to go public "within a couple of years," but before it can, "we need to have a track record of profitability and the markets have to be ready"

2 Problems exist : The lack of profitability and the markets aren't ready.
 
kochamLOT
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Sun Sep 16, 2012 11:02 pm

Just throwing it out there..would it be possible for Virgin America, Frontier and JetBlue merge? Would that be of interest to any of those 3 airlines to compete against the larger carriers and Southwest?
 
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lightsaber
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RE: Rumor : VX Given 1 Year To Turn A Profit Or Close

Mon Sep 17, 2012 12:20 am

Obviously this information wouldn't be public. But they fact we're discussing shows it is plausible. VX has their supporters. But at some time they must make money.

The goal is for VX to go public next year. Unlikely, but that is the goal.

FWIW, if VX does go public, I will not be buying.

Quoting Roseflyer (Reply 46):
Every airline except American are posting 5-10% profits and record revenue figures. If VX can't make money in this climate, then they shouldn't be in business.

In particular considering how mature an airline VX is.
"Virgin America, Inc. is a United States-based airline that began service on August 8, 2007."
From:
http://en.wikipedia.org/wiki/Virgin_America

FIVE years! That is long enough.
Last loss was $76M. However:
" Mr. Cush said the costs of entering new markets offset revenue gains in its maturing ones, such as Los Angeles and its hub in San Francisco, which are "solidly profitable."
Quoting LV (Reply 2):
If it's true I think it might be DL's newest source of slightly used planes. Second hand 320's anyone?  

   The issue is used A320s have good resale value. It is the A319 that is losing resale value. Hence why Allergiant bought A319s. DL shouldn't be interested in A319s after the 717 buy. A320s? Sure. But new vintage A320s will have no trouble finding a home. So even in the worst case scenario, I do not see DL picking up enough to make the switch. This isn't like the MD-90 or 717 where there are simply no other buyers. Used A320s trade hands often. There is a very healthy aftermarket for the type.

Quoting N757ST (Reply 19):
We know quite a bit about thier financials... and they are dismal. As of last quarter VX is running a 20% operating loss, which is unprecidented in this industry.

They had a bad quarter no doubt. I wonder how much of the loss (believed to be $15 million) was indeed a switch to bad predictive algorithms for seat prices? But would they really have some more dollars at higher fares? I suspect the answer will be stuck at a maybe.

Quoting KochamLOT (Reply 50):
Virgin America, Frontier and JetBlue merge?

Why merge? B6 could take the aircraft off the second hand market. F9 has unions and that wouldn't work well with the VX or B6 models. A nice idea and they could be profitable as a group, but there are several issues.
1. VX has just too much debt. No one will take them.
2. F9 has unions.
3. B6 is attractive to a strong partner, but what is the advantage for them?
"They did not know it was impossible, so they did it!" - Mark Twain

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