Virgin America Reports First Quarter 2011 Financial Results

[Fubijaakr]

but because the VA business model is based on the belief that an airline seat is more than just a commodity -- that a passenger might buy a ticket based on service and brand loyalty. If VA is a success, then a lot of things in this industry might start to fall into place......
I realize it's still just a pipe dream considering we're hemoraging cash quarter after quarter.

At least you realize the folly of your pipe dream. While you may HOPE that consumers buy service, they don't.

The average passenger buys low fares. The high yield business flyer buys mileage to maintain their Gold status. Don't believe it? Last December I was in the hotel van with gal who was flying from PDX to Paris for LUNCH with a friend. Why? To up her miles on CAL.

VX can't match established carriers with EITHER of those demographics. What does that equal? Let's just say I'd keep your resume updated.

 

[Tomct]

At least you realize the folly of your pipe dream. While you may HOPE that consumers buy service, they don't.

The average passenger buys low fares. The high yield business flyer buys mileage to maintain their Gold status. Don't believe it? Last December I was in the hotel van with gal who was flying from PDX to Paris for LUNCH with a friend. Why? To up her miles on CAL.

VX can't match established carriers with EITHER of those demographics. What does that equal? Let's just say I'd keep your resume updated.

Funny, our load factors continue to improve and oh by the way, our First Class is one of the highest priced in the industry and we are full all the time. Don't forget that we have 3 levels of service, not just two. Yeah, there are $39 fares out there (just like everyone else) , maybe 3-5 per plane...maybe. The rest are right there or even a bit higher than the rest. Say what you will, but you will STILL be saying it 5 yrs from now when we have over 100 plus planes and getting bigger and stronger every year. But hey, you keep that positive attitude of yours going there Fubi....if I had to spend 5 seconds with you in the cockpit....I would kill myself. What a Tool. All those AK pilots are so lucky to have you on their team. uke:

Lovegun, don't you worry, we will be fine. Baring any catastrophe with Oil. If that happens, there will be furloughs and airlines folding all over the place. Hope that never happens.

 

[jayme]

If you had full planes with heavy ticket prices, you'd be making money. You may have full planes, but you can't turn a profit.

Better go back and read the fire sale fares you've been getting out of ORD and DFW. You may have bodies in the back of the plane, but at $39 a head, you're LOSING. As confirmed by your 1Q result.

Try booking a ticket on us and see what we're charging. Certainly not giving away the seats. I just saw $1889 one way SF to Boston (first class, which is head and shoulder above anything most other airlines offer.) I checked our non-rev internal site to see loads and some of those seats have already been sold at that price.

We're not making money, but it ain't cheap to start an airline the way we've been doing it. And the only way a sane investor lets management do what we've been doing is if there is a boatload of money behind the operation. I'm not saying we don't have insane investors, or inept management... who knows? But I sleep just fine at night, and know if we go down, we will have done our best to change the competitive landscape in domestic airline travel.

But I think we'll be fine. Thanks for your concern...

 

[Fubijaakr]

All I need to look at is your profit statements. You guys are bleeding cash. How long til Sir Dick pulls the plug just like he did at Virgin Blue and Virgin Nigeria?

Fortunately, all the recall offers will be gone by then.

 

[redflyer65]

It will be interesting to see how long the bleeding of cash continues. It's definitely hard to get capital when you are a young new airline...instead of being a legacy like American.

In the end, the airline seat is a commodity...albeit with good or poor customer service surrounding it. It's hard to break into new markets with any long term success when going up against the years of frequent flyer programs out there..someone mentioned this before.

One thing is true, having low cash on hand with a high debt load, and still trying to borrow money leads to higher credit interest rates and eventually vendors witholding services (because they know there is no cash behind the request).

This was the first nail in the coffin with Frontier. Credit card companies started calling for more cash which F9 didn't have...which triggered their bankruptcy.

 

[jayme]

Just FYI, the credit card companies have been withholding 100% since our inception. They don't have the ability to do to us what they did to Frontier.

 

[clickclickboom]

tomcat dont be foolish. i am thrilled for all the juice that flows out of you but the reality is that the bod and management treats your beloved airline nothing more than a business plan. if the plan dont work the doors get closed.

in this industry there is only so much juggling a company can do to be successful.

you could shut your doors tomorrow or be here in 10 years making coin but i am sure your optimism far exceeds managements. and considering that you have lost nearly three quarters of a billion dollars since inception your strong opinions are like the drunk guy in the bar talking about the bullseye he is going to get on the dartboard

 

[Tomct]

tomcat dont be foolish. i am thrilled for all the juice that flows out of you but the reality is that the bod and management treats your beloved airline nothing more than a business plan. if the plan dont work the doors get closed.

in this industry there is only so much juggling a company can do to be successful.

you could shut your doors tomorrow or be here in 10 years making coin but i am sure your optimism far exceeds managements. and considering that you have lost nearly three quarters of a billion dollars since inception your strong opinions are like the drunk guy in the bar talking about the bullseye he is going to get on the dartboard

Well, then, here is the bulls eye Click. See you in 10 yrs and we will still be going strong. But Thanks for your concern. As far as my optimism outpacing mngmnt, well lets just say I don't see them dropping as much coin on the improvements for our airplanes to come along with better products for on board amenities if they thought this place was going away. Again, thanks for your concern.

Fubi, for your information, Virgin Blue is going strong and actually getting bigger. Keep using Nigeria as an excuse though...now you are comparing the market in Africa with the U.S.? That's pretty weak....even for you! :laugh:

 

[Lampshade]

[FONT=ARIAL,]$25m was in unrestricted cash. (down $5mil from Q4)!!!! Getn' down to the nitty gritty!

[/FONT][FONT=Verdana,Helvetica,Arial][SIZE=-1][FONT=ARIAL,]For 2011 Q1:

Airline/ Operating margin
UA 1.4%
DL -1.1%
AA -4.2%
US -1.2%
WN 3.7%
B6 4.5%
AS 14.9%
FL -5.5%

VX -14.7%[/FONT][/SIZE][/FONT]

 

[weasel_lips]

Virgin America CFO Quits




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SAN FRANCISCOVirgin America said Thursday that its chief financial officer is leaving the airline company and will be replaced by the CFO from Pinnacle Airlines Corp.
Privately held Virgin America pointed out that its next CFO has experience leading an airline preparing to sell stock to the public.
Peter D. Hunt will become CFO and senior vice president effective July 11, replacing Holly Nelson, who is leaving "to pursue other opportunities," Virgin America said.
Hunt has spent six years at Pinnacle, which operates regional flights for Delta, Continental and US Airways through subsidiaries that include Colgan Air and Mesaba Aviation.
CEO David Cush said Hunt's background would help Virgin, "specifically in leading a growing airline as it prepares to enter the public markets."
Officials at Virgin America, which began flying in 2007 and is 25 percent owned by Richard Branson's Virgin Group, have talked of going public but not until at least 2013.
Last week, Spirit Airlines Inc. went public but only after cutting the opening price for its shares. The shares fell further on the first day of trading.
Most U.S. airlines were profitable last year but are struggling with higher fuel costs in 2011.
Virgin America lost $68.7 million last year on revenue of $724 million, compared with a loss of $80.8 million on $547.6 million in revenue in 2009.

 

[weasel_lips]

Looks like Virgin is going to try and raise cash with an IPO? That must mean the private investment money is drying up.....

 

[jayme]

Or that they always were going to go public (like pretty much every other large airline that has ever existed.)

 

[Blue Dude]

Most airlines that IPO are profitable first. This looks more like a Hail Mary to me. Best of luck though.

 

[Fubijaakr]

[FONT=Verdana,Helvetica,Arial][SIZE=-1][FONT=ARIAL,]VX -14.7%[/FONT][/SIZE][/FONT]

Virgin America lost $68.7 million last year on revenue of $724 million, compared with a loss of $80.8 million on $547.6 million in revenue in 2009.

Let's see, the cash is draining away. It doesn't really matter how much money you put through the system, if you don't make a profit, you won't be around long.

Its simple economics. Even the richest of benefactors gets tired of throwing their money down a rathole eventually.

 

[jayme]

Most airlines that IPO are profitable first. This looks more like a Hail Mary to me. Best of luck though.

What seems like a Hail Mary? Having a plan to IPO some day? When jetBlue devised a plan to go public, was that a Hail Mary? It seems to me that every big airline that ever existed made a plan to go public.

It has been explained to every employee here that we need to have a succesful company that people want to invest in before we can sell stock, so this isn't something that will happen any time soon.