Virgin America 1Q loss $76 million

[Grandpa +65]

I just heard on Bloomberg that Branson just wrote another check for around 76 million for VA. Coincidence? Find out at 11.

They have jobs as long as Branson wants to keep covering the losses. Remember Hooter's Air? At least that CEO knew when to say when. He said something like, "I have a lot of money to spend on this, but I'm not stupid".
" Branson either
a) has a lot more money, or
b) is stupid.
I am amazed if this Virgin America thing keeps going much longer. VA has lost upwards of 500M in the last five years

 

[redflyer65]

I believe it's option A.

He has a ton of money. His goal is very plain to see...

Keep funding VA until cabotage goes away and then he can freely connect his entire network.

I'm not sure how many years he's planned to put into VA. The employees better hope it's for a long, long time.

I agree with the IPO talk. It would be ugly to try to spin years of losses to new investors. I see it getting pushed back. They will blame the economy or some other event as the cause.

 

[Grandpa +65]

"Keep funding VA until cabotage goes away and then he can freely connect his entire network".
redflyer65: I agree on that one.

He's putting his money behind Obama this year so he can buy AA from Doug Parker/ USAirways once he owns it. You need a friend in high places to change that foreign ownership rule!

 

[n757st]

They have jobs as long as Branson wants to keep covering the losses. Remember Hooter's Air? At least that CEO knew when to say when. He said something like, "I have a lot of money to spend on this, but I'm not stupid".
" Branson either
a) has a lot more money, or
b) is stupid.
I am amazed if this Virgin America thing keeps going much longer. VA has lost upwards of 500M in the last five years

Branson, because of foreign ownership laws, cannot just pump money into this company.

 

[redflyer65]

Branson, because of foreign ownership laws, cannot just pump money into this company.

Ahh, okay...

 

[n757st]

Ahh, okay...

....ok, he can send them a free check and not take any additional ownership of the company, that won't happen.

 

[redflyer65]

The name on the side of the planes say VIRGIN. That is tied to Branson. There are a hundreds of thousands of ways he can help. (and you better believe he knows how important that brand is to his name) Is it legal? Probably not. I'm not naive enough to think he isn't doing something behind the scenes. He's definitely smart enough to not get caught. That's my take, yours might be different. I would think that even most VA employees think the same.

 

[Dizel8]

Supposedly, the "Bearded One" has personally guaranteed that the investors will be made whole, whatever the cost. Rumor, truth, who knows?

 

[ualdriver]

49M operating loss, 76M net loss on 267M gross revenue. 111M in unrestricted cash left. Someone had better be writing Mr. Cush a big, fat check soon. Another quarter or two like that and guys might not have time to bail before any significant hiring starts at other airlines.

And even more annoyingly, Mr. Cush didn't put a Consolidated Statement of Earnings table in his latest press release so that one can make comparisons to previous quarters. Lame.

 

[fam62c]

Maybe so but I'm curious as to how a public offering of a company that has been consistently unprofitable goes.

Best of luck to all at VA. Some great people there.

It wouldn't go at all, they will need to establish a track record of profitability prior to having a shot at a successful IPO. That's what I'm saying, I think that the investors are willing to keep shoveling in the cash until that happens even if it's years from now, seems crazy but they show no signs of giving up.

 

[Andy]

Branson isn't the only one who has dumped money into this pig. Hedge funds dumped $150M into VA in Dec 2011. The hedge funds will want to IPO VA in order to recover some of their investment.

VA's cash burn is now out of control. In spite of borrowing $150M in Dec, they ended 4Q2011 with $160M in unrestricted cash. They ended 1Q2012 with $111M in unrestricted cash. One more quarter like that and they'll need another truckload of money to burn.

VA may be adding capacity but they're having to slash fares in order to fill their planes. In spite of higher fuel prices, the average fare for VA went from $182.46 in 1Q2011 to $168.11 in 1Q2012.
Plus UAL is adding capacity out of SFO - I'd be surprised if a lot of UAL's capacity increases aren't aimed directly at VA routes.

Perhaps VA will put some lipstick on one or two quarterly reports to show a 'profit' and then IPO it out to the public.

 

[St. Nic]

Put a fork in VA- that pig is just about done!

 

[jonjuan]

NetJet pilots use to say that.

And nja just ordered 2 Billon in new aircraft. Buffett will continue to fund for a looooong time.

 

[jonjuan]

Branson isn't the only one who has dumped money into this pig. Hedge funds dumped $150M into VA in Dec 2011. The hedge funds will want to IPO VA in order to recover some of their investment.

VA's cash burn is now out of control. In spite of borrowing $150M in Dec, they ended 4Q2011 with $160M in unrestricted cash. They ended 1Q2012 with $111M in unrestricted cash. One more quarter like that and they'll need another truckload of money to burn.

VA may be adding capacity but they're having to slash fares in order to fill their planes. In spite of higher fuel prices, the average fare for VA went from $182.46 in 1Q2011 to $168.11 in 1Q2012.
Plus UAL is adding capacity out of SFO - I'd be surprised if a lot of UAL's capacity increases aren't aimed directly at VA routes.

Perhaps VA will put some lipstick on one or two quarterly reports to show a 'profit' and then IPO it out to the public.

Agreed-CASM increased 5.3% (and should only go higher) and their operating margin went from -14% to -18%. The high capacity still in the market will make this very difficult to turn around.

 

[BILL LUMBERG]

It absolutely amazes me that Southwest Pilots get on a Virgin America thread to bash them and turns the tables on Delta saying that we hurt the industry....

Once again.....no retirement, no holding pay, FARs for workrules, no meals, Pay for training.....and the list goes on and on.....but they sure do let all their friends know how much they make......pathetic these aholes get on here pointing the finger at a Virgin Pilot!

Enjoy the right seat wave.....it's going to be a long wait for the left!!!