Virgin America Cuts Airbus Order, Delays 30 Jets

[redflyer65]

The CEO previously talked about a nice profit for 3Q and 4Q, now it's turned into another loss of 12.6 million? That's a big difference in just three months.

I'm not sure how things are going to turn around without growth. Good luck to all.

 

[Flyer1015]

The CEO previously talked about a nice profit for 3Q and 4Q, now it's turned into another loss of 12.6 million? That's a big difference in just three months.

I'm not sure how things are going to turn around without growth. Good luck to all.

Operating profit was nearly 16 million. That's the airline's operations itself. Every quarter, they pay back investors. It was always listed as "other expenses" but now for the first time it's listed as "interest expense, net." In the profitable quarters, they pay back the investors a certain amount. For "other expenses" it's always been a shell game. The airline's profits were used to pay the investors back a small amount every time.


While this move sucks, it was inevitable. VA has taken a huge hit for growth from 28 to 52 airplanes from 2010-2012. Next year, the plan was 5 Airbuses, then 8-9 A320s each year for 2014-2019. How can anyone the size of VA take 60 airplanes in 7 years? Growing costs a lot of money, and this kind of growth, considering our route structure, would be nearly impossible. Where would they put all these planes? Any new city announced would not have been profitable for 12-18 months until it matures. So throughout the growth phase, adding new cities and taking 60 planes, they would have posted losses similar to what we've had from 2009-mid 2012. By deferring the airplanes, taking 1 A320 in 2013 sounds reasonable. 10 in 2015-2016, and then planning on 30 in 2020-2022. In the next 7 years, now it will be 11 new airplanes instead of 60. It's a drastic cut, but the current path of adding more planes and more new cities was going to lead the airline into more red ink.



That having been said, as a FO with 16-18 days off and weekends, I don't mind being a FO longer, but the pay needs to get better than what it currently is. At least Jetblue FO pay, and they may be able to retain FOs. If the current payscale doesn't increase in the next year or two, our junior pilots will bail.

 

[redflyer65]

Flyer,

You really want to pay attention to the quaterly losses and the cash on hand. You can ride the 'operating profit' right into bankruptcy and it won't matter one bit.

If the cash on hand continues to dwindle, you can expect vendors to demand......cash only payments going forward. Hopefully the cash on hand remains stable.

 

[Grandpa +65]

Operating profit was nearly 16 million. That's the airline's operations itself. Every quarter, they pay back investors. It was always listed as "other expenses" but now for the first time it's listed as "interest expense, net." In the profitable quarters, they pay back the investors a certain amount. For "other expenses" it's always been a shell game. The airline's profits were used to pay the investors back a small amount every time.


While this move sucks, it was inevitable. VA has taken a huge hit for growth from 28 to 52 airplanes from 2010-2012. Next year, the plan was 5 Airbuses, then 8-9 A320s each year for 2014-2019. How can anyone the size of VA take 60 airplanes in 7 years? Growing costs a lot of money, and this kind of growth, considering our route structure, would be nearly impossible. Where would they put all these planes? Any new city announced would not have been profitable for 12-18 months until it matures. So throughout the growth phase, adding new cities and taking 60 planes, they would have posted losses similar to what we've had from 2009-mid 2012. By deferring the airplanes, taking 1 A320 in 2013 sounds reasonable. 10 in 2015-2016, and then planning on 30 in 2020-2022. In the next 7 years, now it will be 11 new airplanes instead of 60. It's a drastic cut, but the current path of adding more planes and more new cities was going to lead the airline into more red ink.



That having been said, as a FO with 16-18 days off and weekends, I don't mind being a FO longer, but the pay needs to get better than what it currently is. At least Jetblue FO pay, and they may be able to retain FOs. If the current payscale doesn't increase in the next year or two, our junior pilots will bail.

Flyer: Stop drinking Kool aid and listening David Cust violin music. A friend who is a capt. in VA called me. He feels, like many do, Virgins days are numbered. Sorry, This no is not a flame. It's a reality

 

[Flyer1015]

Flyer: Stop drinking Kool aid and listening David Cust violin music. A friend who is a capt. in VA called me. He feels, like many do, Virgins days are numbered. Sorry, This no is not a flame. It's a reality

What part of that was koolaid? I said that the move wasn't totally unexpected. This airline grew 52 aircraft in 6 years with great losses, how can they grow the next 7 with an additional 60? And the fact that pay needs to come up is true, especially for the FOs. If they hope to retain FOs and junior Captains, the reserve rules and QOL issues need to be addressed. Otherwise, people will be bailing left and right. VA has always had pilots who think this place is going belly up. But they are still here, including your VA captain buddy. If they feel so strong about it, then leave. As for me, my logbook is always updated at the end of every trip. I was like that at my last airline, I do that here, and I'll do it no matter what airline I end up at. My mindset/mentality is that I'll stop updating it at Age 64 and 11 months.

 

[climbhappy]

i wonder why airline managers can project a real conservative number for fuel cost...
i read the ltr and they underestimated by 200 million

i remember kerry skeen at ACA used 30/barrel oil cost for the bus plan of Indy air...

you're suppose to put a WORST CASE scenario in a business plan...but what do i know..? they have the job i dont..

 

[n757st]

What part of that was koolaid? I said that the move wasn't totally unexpected. This airline grew 52 aircraft in 6 years with great losses, how can they grow the next 7 with an additional 60? And the fact that pay needs to come up is true, especially for the FOs. If they hope to retain FOs and junior Captains, the reserve rules and QOL issues need to be addressed. Otherwise, people will be bailing left and right. VA has always had pilots who think this place is going belly up. But they are still here, including your VA captain buddy. If they feel so strong about it, then leave. As for me, my logbook is always updated at the end of every trip. I was like that at my last airline, I do that here, and I'll do it no matter what airline I end up at. My mindset/mentality is that I'll stop updating it at Age 64 and 11 months.

Considering those jets were only ordered a year ago, i'd say its still somewhat unexpected.

 

[ualdriver]

If there is any good news for VA, they significantly reduced their cash burn rate in the third quarter, or someone gave them cash. Regardless, they still lost a significant amount of money (watch the net loss, not the operating loss-they have very large interest payments that aren't included in operating expenses) in a quarter that is traditionally the strongest quarter of the year. What are the weaker winter quarters going to look like? If they couldn't make money in the strongest quarter of the year, will they be able to turn it around in the lean winter quarters?

Well, hiring will hopefully start shortly at the majors this winter. Get out while you can.

 

[jonjuan]

If there is any good news for VA, they significantly reduced their cash burn rate in the third quarter, or someone gave them cash. Regardless, they still lost a significant amount of money (watch the net loss, not the operating loss-they have very large interest payments that aren't included in operating expenses) in a quarter that is traditionally the strongest quarter of the year. What are the weaker winter quarters going to look like? If they couldn't make money in the strongest quarter of the year, will they be able to turn it around in the lean winter quarters?

Well, hiring will hopefully start shortly at the majors this winter. Get out while you can.

But what about my 3 year upgrade? You expect me to wait 12 years at a major?

 

[Grandpa +65]

If there is any good news for VA, they significantly reduced their cash burn rate in the third quarter, or someone gave them cash. Regardless, they still lost a significant amount of money (watch the net loss, not the operating loss-they have very large interest payments that aren't included in operating expenses) in a quarter that is traditionally the strongest quarter of the year. What are the weaker winter quarters going to look like? If they couldn't make money in the strongest quarter of the year, will they be able to turn it around in the lean winter quarters?

Well, hiring will hopefully start shortly at the majors this winter. Get out while you can.

Yeap!. David Cust wrote letter is an attempt to prevent the pilots from abandoning ship with all the retirements starting next month. UAL and DAL new contract and USAIRWAys all three hiring next year. VA pilot would not be looking to bail after that company update