Some key points:
- Virgin's cash flow impacted by low margins, a large amount of debt, unsuccessful hedging strategy and its current fleet financing obligations;
- Virgin Australia has almost AUD3 billion in debt maturing between FY2017 (aka now) and FY2020 and facing severe difficulty financing this debt as it matures, with the carrier looking toward HNA Group, and possibly also Nanshan Group, for assistance;
- Virgin has one of the highest gross debt/EBITDAR ratios in the region, a high cost of capital and low cash flow relative to its competitors;
- Planning to defer remaining 737-800s, remove all ATRs (not just some of them as previously announced), and transfer older 737-800s over to Tiger with no like-for-like replacement at mainline;
Pretty damning if correct, especially on hedging: "An increase in oil prices of as little as 20% during FY2018 would result in negative cash flow and the eradication of any possible profit during that period."