Please don't destroy me for being a Virgin pilot with a somewhat positive view on our predicament/situation. It sucks that our delivery schedule has been modified, but I remain cautiously optimistic about our future (or maybe my head is deep in the sand). Here are my reasons:
1) VA is privately owned. The primary investor, Cyrus Capital, owns a majority of our debt. The rest of the money comes from Branson and the management team. VA's losses are from interest payments to its owners. If operating cash dwindles the owners can simply defer interest payments. I would be more worried if we couldn't pay our leases, rent, and fuel bills, but we are covering those costs. If you take interest payments out of the equation, we are profitable.
2) No one would buy us in our current high debt situation. I see that as a positive for the employees. Our owners are stuck with us. They have already sunk $700 million into this company. The only way to make a decent return on investment is to keep VA running until either the economy greatly improves or our balance sheet moves into the black. If necessary, they could defer their interest payments. It would be the only sane option. If we liquidate they lose everything they've put in so far.
3) I know this sounds crazy, but try to follow... So far, we have been a good investment. Our owners are collecting 17% interest. In this economy, where else can you place your money and make a 17% return? It's a high risk investment, but if we make it, these guys will reap a huge return (I hope this is what they're thinking too).
4) VA has revenue of over $1 billion per year. That is a huge cash flow for a young business. I'm not foolish enough to mistake cash flow for profitability, but I am sure our hedge-fund overlords have creative uses for this river of cash.
5) Love them or hate them, we have some of the biggest fish in the airline industry on our BOD: Carty, Skinner, and Branson. And, we recently added Wonder McCloud to head up revenue. There are still many moves to be played. I'm pretty sure these guys aren't wetting the bed like the pilots I'm reading in these forums. Don't forget, they've got millions of their own cash riding on this, and there is no golden parachute because it's their own money that would have to fund the proverbial chute.
6) Think Branson is losing control? His plan for world domination is falling apart? Well, guess who is about to place an order for Airbus 320's.... coincidence? The same week his other Virgin Airline is turning back an Airbus order... hmm.... Don't forget, he's about to launch JayZ and Beyonce into space on a Virgin branded rocket. All just in time for the coming economic recovery.
7) We've been through worse. In 2008 we deferred deliveries. At the time no one else was hiring, oil was $140/barrel, and the financial system was imploding. Things looked bleak back then. Upgrade was indefinite. We had no aircraft coming, but amazingly a year and a half later we started to grow again -- more than doubling our size.
I now raise my paper cup to Jim Jones and propose a toast to our future!
On my next trip I'm bringing my logbook... Time for some updating.
1) VA is privately owned. The primary investor, Cyrus Capital, owns a majority of our debt. The rest of the money comes from Branson and the management team. VA's losses are from interest payments to its owners. If operating cash dwindles the owners can simply defer interest payments. I would be more worried if we couldn't pay our leases, rent, and fuel bills, but we are covering those costs. If you take interest payments out of the equation, we are profitable.
2) No one would buy us in our current high debt situation. I see that as a positive for the employees. Our owners are stuck with us. They have already sunk $700 million into this company. The only way to make a decent return on investment is to keep VA running until either the economy greatly improves or our balance sheet moves into the black. If necessary, they could defer their interest payments. It would be the only sane option. If we liquidate they lose everything they've put in so far.
3) I know this sounds crazy, but try to follow... So far, we have been a good investment. Our owners are collecting 17% interest. In this economy, where else can you place your money and make a 17% return? It's a high risk investment, but if we make it, these guys will reap a huge return (I hope this is what they're thinking too).
4) VA has revenue of over $1 billion per year. That is a huge cash flow for a young business. I'm not foolish enough to mistake cash flow for profitability, but I am sure our hedge-fund overlords have creative uses for this river of cash.
5) Love them or hate them, we have some of the biggest fish in the airline industry on our BOD: Carty, Skinner, and Branson. And, we recently added Wonder McCloud to head up revenue. There are still many moves to be played. I'm pretty sure these guys aren't wetting the bed like the pilots I'm reading in these forums. Don't forget, they've got millions of their own cash riding on this, and there is no golden parachute because it's their own money that would have to fund the proverbial chute.
6) Think Branson is losing control? His plan for world domination is falling apart? Well, guess who is about to place an order for Airbus 320's.... coincidence? The same week his other Virgin Airline is turning back an Airbus order... hmm.... Don't forget, he's about to launch JayZ and Beyonce into space on a Virgin branded rocket. All just in time for the coming economic recovery.
7) We've been through worse. In 2008 we deferred deliveries. At the time no one else was hiring, oil was $140/barrel, and the financial system was imploding. Things looked bleak back then. Upgrade was indefinite. We had no aircraft coming, but amazingly a year and a half later we started to grow again -- more than doubling our size.
I now raise my paper cup to Jim Jones and propose a toast to our future!
On my next trip I'm bringing my logbook... Time for some updating.
