Delta restarting SEA to ANC and LAS

[General Lee]

Your "source" is Airliners dot net? How about logging onto DeltaNet and doing a little searching? You'll easily find this information. Oh wait, you don't really work for Delta. Moron.

Notice the date I wrote that? (The guys on Airliners said it would be loaded on that Saturday) That means it came out on Airliners before the Delta net. The guys on Airliners maybe work in Networking. Do you troll the Delta net looking for new flights? Sounds like it, since you are an ASA pilot dreaming about DL. Yeah you are. Also, work on your reading comprehension, Loser!


Bye Bye---General Lee

 

[DYLIN]

Your "source" is Airliners dot net? How about logging onto DeltaNet and doing a little searching? You'll easily find this information. Oh wait, you don't really work for Delta. Moron.

Airliners.net is absolutely a more reliable source to get this first-hand info sometimes than Deltanet.

The guys on a.net may be huge nerds, but they follow this stuff extremely closely and a bunch of them do work for airlines.

 

[igneousy2]

Airliners.net is absolutely a more reliable source to get this first-hand info sometimes than Deltanet.

The guys on a.net may be huge nerds, but they follow this stuff extremely closely and a bunch of them do work for airlines.

^^^^ Ditto ^^^^

 

[KarmaPolice]

Andy is like that overly attached girlfriend figure that is making the rounds on the internet.

Here's Andy:

Ridiculous. He posts numbers and facts you don't like and you reply with this. This reminds me of the court scene in Idiocracy.

 

[tzskipper]

I think the rub is that a conclusion is being drawn on what could be argued to be incomplete facts.

The reality is, that as a private corporation VA is most likely reporting the minimum financial information required. In addition, it has been explained to those that work there, that as a privately held business much what is shown as "debt" on the balance sheet as a "non-public" company, would be considered considered "equity" in a public company. Simply meaning that a public IPO would essentially swap the new investor equity for the existing investor debt. I believe a similar process took place as a result of Spirit's IPO.

None of it really matters though. The only reality is that VA is still in business, still accepting a/c and still adapting their model. Because of this, the only assumption that makes sense (to me) is that there is probably more to the business than meets the eye, and that the investors are apparently content with the status quo.

Respectfully,

S

 

[Andy]

Ridiculous. He posts numbers and facts you don't like and you reply with this. This reminds me of the court scene in Idiocracy.

I can understand his anger. He's fairly new at VX so he's got an emotional investment. I've poked him in the ribs to see if he has any investment information that I can use, but he appears to be an empty vessel on that subject (reference the 16th century author William Baldwin).

I think the rub is that a conclusion is being drawn on what could be argued to be incomplete facts.

The reality is, that as a private corporation VA is most likely reporting the minimum financial information required. In addition, it has been explained to those that work there, that as a privately held business much what is shown as "debt" on the balance sheet as a "non-public" company, would be considered considered "equity" in a public company. Simply meaning that a public IPO would essentially swap the new investor equity for the existing investor debt. I believe a similar process took place as a result of Spirit's IPO.

None of it really matters though. The only reality is that VA is still in business, still accepting a/c and still adapting their model. Because of this, the only assumption that makes sense (to me) is that there is probably more to the business than meets the eye, and that the investors are apparently content with the status quo.

Respectfully,

S

I pull all of my numbers from public sources; there's a lot data out there if you know where to look. I get a lot of numbers from the DOT's BTS.


The Spirit IPO that you reference netted ~$170M; $150M was used as additional capital on the balance sheet. The ~$20M was used to pay off debt. The remainder of the debt was converted to equity at the IPO price. Spirit had ~$325M of debt (long term + short term) at the IPO; ~$305M was converted to common stock.
VX has $1.08B in debt (long term + short term). That's a much bigger chunk of debt to convert to equity and makes it much tougher to do an IPO.


VX has been around for more than 5 years and still isn't able to string together more than 2 quarters of operating profits. Now that they've cancelled aircraft orders, will they start to make money? Maybe, but they keep blowing opportunities.
Example: I watched Cush on CNBC proclaim how VX is dropping fares on EWR-SFO by 30%. That fare (I did the math) is well below VX's breakeven. Wouldn't a 10% fare reduction have been more than sufficient? It would have gotten them much closer to breakeven.
The net result is that multiple airlines have started adding a lot of capacity that directly competes with VX.


I use all of the information I gather here for investments (I've got several different directions that I could take this exchange). One of the things I've gained from my exchanges here is a deeper insight into what VX management is telling the worker bees. Sounds like SSDD to me, but I'll wait and see what the 4Q numbers reveal.

Speaking of gathering investment information, the Trainer refinery discussion was great for me because I looked at pipeline investment opportunities. In the end, I ruled out investing in pipelines because they've already been bid up by those seeking yield (most pipeline investments are MLPs).


I imagine a lot of people don't care one way or the other about VX. But keep in mind that most pilots at majors get profit sharing. If VX comes in and undercuts fares (in spite of losing money on every ticket they sell), your airline is also going to cut prices which is going to partially come out of your pocket because your airline's less profitable.

 

[Flyer1015]

I can understand his anger. He's fairly new at VX so he's got an emotional investment. I've poked him in the ribs to see if he has any investment information that I can use, but he appears to be an empty vessel on that subject (reference the 16th century author William Baldwin).




I pull all of my numbers from public sources; there's a lot data out there if you know where to look. I get a lot of numbers from the DOT's BTS.


The Spirit IPO that you reference netted ~$170M; $150M was used as additional capital on the balance sheet. The ~$20M was used to pay off debt. The remainder of the debt was converted to equity at the IPO price. Spirit had ~$325M of debt (long term + short term) at the IPO; ~$305M was converted to common stock.
VX has $1.08B in debt (long term + short term). That's a much bigger chunk of debt to convert to equity and makes it much tougher to do an IPO.


VX has been around for more than 5 years and still isn't able to string together more than 2 quarters of operating profits. Now that they've cancelled aircraft orders, will they start to make money? Maybe, but they keep blowing opportunities.
Example: I watched Cush on CNBC proclaim how VX is dropping fares on EWR-SFO by 30%. That fare (I did the math) is well below VX's breakeven. Wouldn't a 10% fare reduction have been more than sufficient? It would have gotten them much closer to breakeven.
The net result is that multiple airlines have started adding a lot of capacity that directly competes with VX.


I use all of the information I gather here for investments (I've got several different directions that I could take this exchange). One of the things I've gained from my exchanges here is a deeper insight into what VX management is telling the worker bees. Sounds like SSDD to me, but I'll wait and see what the 4Q numbers reveal.

Speaking of gathering investment information, the Trainer refinery discussion was great for me because I looked at pipeline investment opportunities. In the end, I ruled out investing in pipelines because they've already been bid up by those seeking yield (most pipeline investments are MLPs).


I imagine a lot of people don't care one way or the other about VX. But keep in mind that most pilots at majors get profit sharing. If VX comes in and undercuts fares (in spite of losing money on every ticket they sell), your airline is also going to cut prices which is going to partially come out of your pocket because your airline's less profitable.

Emotional investment? GMAB. I'd be furloughed within 12 months at my last airline. I'm happy with where I am, and the qualifications I was able to gain here. If it tanks, I'd apply to Spirit or JetBlue, along with any legacy that is hiring. There would also be foreign carrier options that require the A320 type and time. Just curious, where did you go after you were furloughed from United?

How do you know VX's breakeven point? I'll save you the trouble on 4th quarter numbers, it'll be an operational protfit with an "interest expense" that will put it at a net loss, just like the 3rd quarter.

And in line with us going out of business in 2013, the pilots are about to get an increase in compensation/QOL package. Stay tuned for more on that information. Andy, if you were the board of directors at VX, at this point in time would you vote to give them a pay increase and therefore increaes your labor costs?

 

[tzskipper]

I appreciate the amount of research and effort that you have shown. I guess my thought is why spend the effort on a company that is not an investment?

Regardless, the point I was heading for is that it not so much the data that you have found, it is the data that is absent that make any analysis incomplete simply due to the assumptions made to fill in the blanks. For example, the position was taken that there is serious doubt regarding the employee of VA's statement that there would be a Q4 operating profit. If I understood your position correctly, you do not feel that was possible due to the decline in Q4 load factor. But... what about the yield?

Also, a CEO making a public claim that competition brings lower fares (insert "shock" here)? Does it really mean anything? If that is troubling, then where is the disdain for the famous "Southwest effect", wherein for years they would open new cities on the fringes of the legacies domains, offering 9-10 flights a day at $29 or $39 bucks?

Sorry to be so long winded. I am not looking for a debate, as again it really doesn't matter all that much. As someone implied earlier (I paraphrase), it is probably not all what it seems, as the investors appear content and the company is still growing.

Goodnight,

S

 

[BOX OFFICE]

Notice the date I wrote that? (The guys on Airliners said it would be loaded on that Saturday) That means it came out on Airliners before the Delta net. The guys on Airliners maybe work in Networking. Do you troll the Delta net looking for new flights? Sounds like it, since you are an ASA pilot dreaming about DL. Yeah you are. Also, work on your reading comprehension, Loser!


Bye Bye---General Lee

I thought you had me on ignore hot shot. You just can't resist can you? Your mom is calling, time to get off her computer and clean your room.

 

[Andy]

I appreciate the amount of research and effort that you have shown. I guess my thought is why spend the effort on a company that is not an investment?

Regardless, the point I was heading for is that it not so much the data that you have found, it is the data that is absent that make any analysis incomplete simply due to the assumptions made to fill in the blanks. For example, the position was taken that there is serious doubt regarding the employee of VA's statement that there would be a Q4 operating profit. If I understood your position correctly, you do not feel that was possible due to the decline in Q4 load factor. But... what about the yield?

Also, a CEO making a public claim that competition brings lower fares (insert "shock" here)? Does it really mean anything? If that is troubling, then where is the disdain for the famous "Southwest effect", wherein for years they would open new cities on the fringes of the legacies domains, offering 9-10 flights a day at $29 or $39 bucks?

Sorry to be so long winded. I am not looking for a debate, as again it really doesn't matter all that much. As someone implied earlier (I paraphrase), it is probably not all what it seems, as the investors appear content and the company is still growing.


Goodnight,

S

Why waste the time when there's no direct investment play? Because there are other investment plays which would be impacted by VX's future. Think three moves in advance - chess vs checkers. There are always peripheral plays.

Yield vs load factor - that was a very good question. My opinion is that VX doesn't have a high enough percentage of market share on any route to drive yields higher. I'm going to have to run some historic numbers and see if my thesis is valid.

As for the Southwest Effect, it doesn't really apply here. In the past, Southwest has entered smaller secondary markets offering low fares for a short time with frequent departures/arrivals. After a short introductory period, they've raised their prices to a point where they've been profitable. VX hasn't done that; since they aren't able to dominate any city pair, they've kept their prices below their cost, in spite of having a very low CASM.

Thanks for the exchange; I enjoy reasoned economic debates. The last thing I want to do is be caught in groupthink where I don't see looming threats. If you never listen to 'the other side of the debate', you are setting yourself up for failure.