Virgin America Cuts Airbus Order, Delays 30 Jets

[Flyer1015]

The investors are getting a good return so far and they haven't pulled anything out. In fact, I hear there was a $200 mil cash infusion. Have they announced who is getting the newly open slots for the A320 deliveries? Since BMI closed and VA got slots at Heathrow, they are looking at A320 deliveries. In any case, VX is still around despite what others wish upon it.

 

[metroplex]

I know tons of guys would love to see VA go, but 99% chose Virgin over anybody else if it comes to jumpseating home. I guess they are good enough then. Also, I agree that the investors have to stick with it. They are getting paid the interest on the money the gave to VA, and of course are hoping to recoup the rest when they IPO. I guess the planning guy from Westjet joined VA and seems to be a pretty sharp cookie... lets wait and see. I wish those guys well, great product and awesome group of pilots

 

[redflyer65]

The investors are getting a good return so far and they haven't pulled anything out. In fact, I hear there was a $200 mil cash infusion. Have they announced who is getting the newly open slots for the A320 deliveries? Since BMI closed and VA got slots at Heathrow, they are looking at A320 deliveries. In any case, VX is still around despite what others wish upon it.

So the investors are going to continue throwing money at an operation that can't make a quarterly profit? For how long?

Any guess on how bad an IPO this would be?

VX has it's own issues going forward and the headwind just doubled. I don't wish anything upon them, so if your going to throw your 'haters just going to hate BS' then so be it. The market will determine if VX stays or goes. So far, the income hasn't outweighed the expenses. Even after plenty of people crowed about how there would be a nice profit for Q3 and Q4. There wasn't.

 

[Daedalus]

Here is a link to the Cranky Flyer blog concerning VX that came out yesterday (11/19). A lot of the comments his readers provided echo those here.

http://crankyflier.com/2012/11/19/v...aft-orders-as-it-posts-another-loss/#comments

 

[Flyer1015]

The CEO was asked about operating profit versus net loss. His response was basically the key reason net loss means less to us and is essentialy irrelevant is that's it's shareholder debt. So the difference between our operating loss and net loss is interest payments. It's debt thats held by shareholders, that if we were a public company, it would actually be equity. If we were a public company, it would be an equity line, and we wouldn't have this interest expense. Private equity structure versus a public structure.

Clear as mud!

 

[Splert]

OMG ...

Make it stop!

 

[Splert]

Forget it ...

 

[NEDude]

The only way for the investors to cash out of Virgin at this point is to sell. The intent was to IPO ASAP and collect a large windfall, but recent events (Facebook debacle, Fiscal Cliff, etc) have made a successful IPO doubtful for the foreseeable future. It think that is why we have seen a change suddenly. As others have pointed out, the debt to the investors is being paid back at 17%, and that debt is in large part what is causing the company to post losses. But the investors did not get into this as a long-term investment.

My belief is that the investors have now decided since an IPO looks like it will not be successful, they will try to sell to another airline instead. I think that is why we saw deliveries cancelled and deferred, to allow a potential buyer to have more flexibility to decide what to do with us.

There have been growing rumors as well that Richard was spotted in and around Frontier HQ in the past month or so. Who really knows what is going on, perhaps a three way merger with Virgin, Frontier (also up for sale), and JetBlue could be in the works to create a "super" LCC that could offer significant competition with Southwest with a superior in-flight product. All just speculation though.

In any case, despite my history of being a Virgin cheerleader on this forum, the logbook and resume are being polished up. There are some good opportunities in China from what I hear...

 

[NEDude]

I will add that the recent firing of KD has killed pilot morale here at VX. The announcement on Friday was bad enough, but news of the termination was icing on the cake. I can guarantee a large majority of the pilots, if not all, have NO FAITH in our current management and would love nothing more than to see them gone ASAP. Particularly DC and FF.

 

[bri5150]

I will add that the recent firing of KD has killed pilot morale here at VX. The announcement on Friday was bad enough, but news of the termination was icing on the cake. I can guarantee a large majority of the pilots, if not all, have NO FAITH in our current management and would love nothing more than to see them gone ASAP. Particularly DC and FF.

The good news with that firing is that apparently they think we will be around for someone to be fired from. If we were truly shutting down sometime soon, they wouldn't have opened up themselves to litigation for such a trivial offfense.