Virgin America Reports First Quarter 2011 Financial Results

[Lake Alice]

At the end of the day VX needs to start making money and pay their employees industry standard wages and benefits otherwise all VX serves to do, as it stands now, is continue to drag down the industry. You never want to see pilots lose jobs but VX's undercutting of established airlines makes us all suffer.

 

[ualdriver]

https://static.virginamerica.com/images/press/20110610-finance-part01.png

The above is their consolidated statement of earnings. VA=Virgin America in this post.

Blaming their woes on fuel is a joke. From what I have read in the past, they have some sort of hedging program in place, just like the rest of us. They probably are about as successful in that regard as everyone else. Fuel would have to drop 40%ish with NO corresponding decrease in fares in order for them to break even on an operating basis. Ain't happening, and even if fuel went down to $80 they would still be losing significant amounts of money.

But it gets worse....

Their NET income is even worse, at negative 44.5 M. Net income includes at minimum the cost of borrowing money as money isn't free. So if one looks at their results NET of all costs, the picture is not pretty.

Of course your management team is going to put up the facade that everything is OK. They can't afford key employee defections. Think how screwed they would be, for example, if a bunch of their pilots started leaving ahead of an anticipated closing of the doors. They can't afford to train new guys, nor risk the cancellations and negative press such an event would likely draw. They need to tell everyone how good things are so that the public and the employees don't get spooked.

They also make a bunch of statements in their press release that are pretty much financial chicanery. Operating revenues are up? Yeah, no kidding, you're growing and following along with the rest of the industry in increasing fares due to higher fuel prices. Big deal. If you're leading with that at the top of your press release and that's the best you've got, well.....RASM is up? Again, big deal, so is everyone elses'......see above.

The fact that their cash level hasn't changed much does not mean that VA is not burning cash. It just means they found entities that gave them more money. Hopefully said entities will continue to do this quarter after money losing quarter. Would you?

I am not saying this because I am not a fan of VA, but I would be seriously spooked right now as a VA pilot. If you can get out, especially if you are at the bottom of the list with not much to lose, get out now. Get the apps out to your first and second choices. You can always say NO if by some miracle VA turns itself around between now and your new job offer, but I don't see how this ship can realistically turn around. You guys might be looking at pay cuts anyway, so taking a pay cut to go somewhere else may not be as bad as it sounds.

 

[Fubijaakr]

Wow, ualdriver, you're trying to confuse them with facts? You're obviously just a VX hater.

 

[ualdriver]

Wow, ualdriver, you're trying to confuse them with facts? You're obviously just a VX hater.

He-he.....actually I am a Virgin America hater as I am no fan of these little undercutting airlines that pop up and try to undermine my ability to earn a union wage and then try to rationalize their low wages with a bunch of weak excuses. But that's for another thread.

Whether I am a hater or not, it doesn't change the fact that they are losing significant amounts of money on a NET basis, that they are dependent upon the benevolence of outsiders to keep them afloat, and that whether fuel prices go up, down, or sideways they have had significant financial issues since they have started operations and will likely continue to have those problems in the future.

Maybe they'll have a better summer quarter but that is probably unlikely. Maybe there are some crucial pieces of information in those super-secret internal memos, but I doubt it. I suspect those memos are to keep the troops from defecting and probably contain the same "rah-rah, go team!" type stuff that the original VA pilots were fed when the airline started up operations.

After the summer, they go into the lean months like the rest of us. I would WAG that is anything bad is going to happen to VA, it will likely be during those historically weak months after the 3rd quarter. I wouldn't be fronting any money on them for travel more than a few months in advance, that's for sure.

 

[Tomct]

He-he.....actually I am a Virgin America hater as I am no fan of these little undercutting airlines that pop up and try to undermine my ability to earn a union wage and then try to rationalize their low wages with a bunch of weak excuses. But that's for another thread.

Whether I am a hater or not, it doesn't change the fact that they are losing significant amounts of money on a NET basis, that they are dependent upon the benevolence of outsiders to keep them afloat, and that whether fuel prices go up, down, or sideways they have had significant financial issues since they have started operations and will likely continue to have those problems in the future.

Maybe they'll have a better summer quarter but that is probably unlikely. Maybe there are some crucial pieces of information in those super-secret internal memos, but I doubt it. I suspect those memos are to keep the troops from defecting and probably contain the same "rah-rah, go team!" type stuff that the original VA pilots were fed when the airline started up operations.

After the summer, they go into the lean months like the rest of us. I would WAG that is anything bad is going to happen to VA, it will likely be during those historically weak months after the 3rd quarter. I wouldn't be fronting any money on them for travel more than a few months in advance, that's for sure.

What a joke. Funny how we have hired alot of your furloughed guys and kept food on their table when your company could not. Once again it is the same crap different day with you tools on here....not going to happen after this year....still here! Not going to happen after 3rd qtr of 2010....STILL HERE!! Now you are saying not going to happen after 3rd qtr of 2011. LOL Guess what, it is going to be the same story....STILL HERE!! But that's ok, after hearing about how crappy it is at your carrier (from your own pilots by the way) I have no desire to work at a crap company like that either. I seem to recall reading a lot of crap like this when JetBlue started up and now look.....they are doing just fine. When our hrly rate is better than yours then what?? Oh wait, I know, you will say...but there is no B/C fund. Ok, I will give you that, but after watching what has happened to this industry and all the other carriers (yours in particular PBGC ring any bells) I would not put one penny in any retirement plan at any airline. I will take care of that myself through other investments.
But hey UAL driver, have fun and good luck with your coming merger problems of your own. I hope it works out for ya.

Oh yeah, YOUR WELCOME for employing some great guys from your company. But hey, keep spinning, it is worth the entertainment.

Fubi...I think it is hilarious how you have nothing to say when confronted with facts and then Driver shows up spouting some flame bait and you are right there to say.....Yeah....what he said. What a joke!

 

[johnsonrod]

He-he.....actually I am a Virgin America hater as I am no fan of these little undercutting airlines that pop up and try to undermine my ability to earn a union wage and then try to rationalize their low wages with a bunch of weak excuses. But that's for another thread.

Whether I am a hater or not, it doesn't change the fact that they are losing significant amounts of money on a NET basis, that they are dependent upon the benevolence of outsiders to keep them afloat, and that whether fuel prices go up, down, or sideways they have had significant financial issues since they have started operations and will likely continue to have those problems in the future.

Maybe they'll have a better summer quarter but that is probably unlikely. Maybe there are some crucial pieces of information in those super-secret internal memos, but I doubt it. I suspect those memos are to keep the troops from defecting and probably contain the same "rah-rah, go team!" type stuff that the original VA pilots were fed when the airline started up operations.

After the summer, they go into the lean months like the rest of us. I would WAG that is anything bad is going to happen to VA, it will likely be during those historically weak months after the 3rd quarter. I wouldn't be fronting any money on them for travel more than a few months in advance, that's for sure.

Dude, you sound like a real d!ck... Don't be a player hater - hate the GAME! UAL/CAL ain't the best place to be either.

 

[ualdriver]

What a joke. Funny how we have hired alot of your furloughed guys and kept food on their table when your company could not.

Oh yeah, YOUR WELCOME for employing some great guys from your company. But hey, keep spinning, it is worth the entertainment.

Sorry you don't like what I have to say. You guys are hemorrhaging cash and whether you like me or not, the facts aren't going to change.

If our airline sucks so badly, feel free to PM me your name and I'll let our HR know of your opinions of our airline if we do ever hire again. Any of the furloughed UAL guys who feel the same way are free to forfeit their seniority number, much to the happiness of the guys below them. If even ONE UAL guy sticks around at VA when the recalls start, I'd be shocked, but whatever works for them.

I'd say good luck, but I wouldn't mean it, so I won't.

 

[ualdriver]

Dude, you sound like a real d!ck... Don't be a player hater - hate the GAME! UAL/CAL ain't the best place to be either.

I don't like it when the "players" are out to undercut my wages, work rules, and retirement. Once you start calling names, the discussion is over as I assume that is the extent of your ability to debate.

Anyway, I'm done here. You're bleeding serious cash. I suggest that your pilot group offer up some serious concessions to help do your part to save the airline. I'd take a look at the Skybus contract and offer that for starters.

 

[Fubijaakr]

driver is right. There's two kinds of VX pilots...RJ kids who want a quick upgrade and an Airbus type. These guys don't give a crap about the wages/work rules. They're making the same money, but flying the "big iron".

Then there are the furloughees. They'll either go back to their legacy carrier the first chance they get or they're the bitter types who blame ALPA for their furloughs.

In both cases, they justify undercutting us by saying "I had to put food on the table." Its amazing. There is one other kind of pilot who uses that same justification. Guess what the name for those guys is?

 

[Tomct]

I don't like it when the "players" are out to undercut my wages, work rules, and retirement. Once you start calling names, the discussion is over as I assume that is the extent of your ability to debate.

Anyway, I'm done here. You're bleeding serious cash. I suggest that your pilot group offer up some serious concessions to help do your part to save the airline. I'd take a look at the Skybus contract and offer that for starters.

LOL, hey, what was that your pilot group did???? Ooohhh, that's right, took paycuts and your quality of life went to crap! Yeah, it was in BK (imagine that) but hey, you guys are forgiven because you are the "Mighty United." Give me a break. Throw the glass at your own house there my boy, your pay is some of the worst in the industry. Oh, I know....you will get your pay back up when the merge happens. I hope that is the case, but sadly, I don't see that happening either. But hey...keep looking in the mirror and telling yourself that you are a "Mighty United Pilot!" :laugh:

You are a pathetic "professional," and I use that term lightly. It's minds like yours, that have put this profession in a nose dive. As long as you get yours....right. Good luck and do us all a favor.....stop participating in things you know nothing about. Have a good day.

 

[Tomct]

driver is right. There's two kinds of VX pilots...RJ kids who want a quick upgrade and an Airbus type. These guys don't give a crap about the wages/work rules. They're making the same money, but flying the "big iron".

Then there are the furloughees. They'll either go back to their legacy carrier the first chance they get or they're the bitter types who blame ALPA for their furloughs.

In both cases, they justify undercutting us by saying "I had to put food on the table." Its amazing. There is one other kind of pilot who uses that same justification. Guess what the name for those guys is?

Oh yeah Fubi, it is everyone else who has the problem, but not you. The last two sentences in your last paragraph show just how uneducated and pathetic you really are!

 

[ualdriver]

Good luck and do us all a favor.....stop participating in things you know nothing about. Have a good day.

Hmmmm.....I know nothing about what's going on at VA? Well, I know this:

OK, OK. Now I'm really done.

 

[ackattacker]

Snikies. I don't agree with everything UALdriver has to say but the financial statement speaks for itself. They are absolutely bleeding money at a rate which should not be happening 3 years into operations.

You cannot trust management to tell you the truth about these things. It looks like things could continue, sure, if investors keep pumping in the dough. As soon as a major investor gets spooked; however, things could come to a screeching halt with little to no warning. I'm not predicting it, just sayings it looks like a distinct possibility.

 

[johnsonrod]

OK, how many profitable years did UAL have over the last decade before the CAL merger????? How many years of profitability? Yeah, not many profitable years.

Looks like increased fuel costs certainly did not help anyone - including VA. Had fuel prices remained stable, perhaps VA would have broken even. You never know. Part of the reason for having an IPO and getting VC money is to provide a cash cushion in these types of operating environments - especially as you are attempting to scale the business to gain operating efficiencies. Operating 2-3 flights per day between city pairs (at low prices) does not provide much efficiency. VA is clearly trying to expand quickly to gain more market share by flying more flights between profitable city pairs.

BTW, I don't fly for VA - but I am a big fan of its product having flown on it a few times - best economy-class service in the business and IFE superior to UAL's and JB's IMO. No wonder UAL wants it to disappear - it has a better product! Now it needs the frequency and market access (i.e., more ORD and EWR slots)...

 

[NEDude]

driver is right. There's two kinds of VX pilots...RJ kids who want a quick upgrade and an Airbus type. These guys don't give a crap about the wages/work rules. They're making the same money, but flying the "big iron".

Then there are the furloughees. They'll either go back to their legacy carrier the first chance they get or they're the bitter types who blame ALPA for their furloughs.

In both cases, they justify undercutting us by saying "I had to put food on the table." Its amazing. There is one other kind of pilot who uses that same justification. Guess what the name for those guys is?

Still looking for that pat on the head aren't you...

 

[NEDude]

Hmmmm.....I know nothing about what's going on at VA? Well, I know this:

OK, OK. Now I'm really done.

I hope you aren't a betting man, because all of your predictions regarding VX have been totally wrong.

Here are some more facts:

Virgin is operating and expanding - aircraft #39 joined the line on Wednesday.

Virgin's cash position has remained nearly constant for for two plus years now.

Virgin is opening a sim center in SFO - significant money has already been paid.

Virgin just signed a lease for even more office space at the main office in Burlingame.

Virgin solidified its order for 60 aircraft, against the 'haters' predictions.

Virgin did turn a profit, contrary to the 'haters' predictions that it would never do so.

Virgin just signed a deal to be the launch customer for the CFM Leap X.

Frankly, given your track record, I hope you keep predicting our demise because it means nothing but success for us. Can't wait to hear what you predict next!

 

[weasel_lips]

We are buying this, buying that, expanding here, expanding there, getting more planes....... Sounds like you are speeding up your own demise to me.

Skybus II

 

[Fubijaakr]

We are buying this, buying that, expanding here, expanding there, getting more planes....... Sounds like you are speeding up your own demise to me.

Skybus II

I believe you have briefly and succinctly illustrated the the truth of the matter.

Thank you.

 

[Splert]

Virgin did turn a profit, contrary to the 'haters' predictions that it would never do so.

Now you have lost it - your grip on reality.

When operation income exceed operational expenses buts results in a Net Loss in the real word is NOT turning a profits.

 

[Fubijaakr]

Now you have lost it - your grip on reality.

When operation income exceed operational expenses buts results in a Net Loss in the real word is NOT turning a profits.

Nah, he's just intoxicated on red Kool-Aid. VX is a loser. 11 of 12 quarters. All that remains is to see how long Sugar Daddy Sir Dick wants to keep pouring money down the rat hole.