Virgin America Cuts Airbus Order, Delays 30 Jets

[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

 

[NEDude]

Despite my history of being a Virgin cheerleader, I will admit this is bad news. My honest opinion is that the board/investors are preparing for a sale or merger. We have all known the intent of the investors was to start and IPO as quickly as possible. This was not a long term plan for them. The market is bad for IPOs and the looming threat of a fiscal cliff has ensured it will not be good for IPOs for a while longer. So the only way for the investors to get a quick return is to sell to another company. How do you make yourself attractive to sell? Reduce your financial obligations as much as possible. With the deferrals VX can offer a decent presence in SFO and LAX and lower long term financial obligations. I doubt we will see VX around in its present form by this time next year. We will either a be a subsidiary of Delta and being slowly absorbed, or you will see us in a two or three way hookup with JetBlue and/or Frontier.

 

[Flyer1015]

Despite my history of being a Virgin cheerleader, I will admit this is bad news. My honest opinion is that the board/investors are preparing for a sale or merger. We have all known the intent of the investors was to start and IPO as quickly as possible. This was not a long term plan for them. The market is bad for IPOs and the looming threat of a fiscal cliff has ensured it will not be good for IPOs for a while longer. So the only way for the investors to get a quick return is to sell to another company. How do you make yourself attractive to sell? Reduce your financial obligations as much as possible. With the deferrals VX can offer a decent presence in SFO and LAX and lower long term financial obligations. I doubt we will see VX around in its present form by this time next year. We will either a be a subsidiary of Delta and being slowly absorbed, or you will see us in a two or three way hookup with JetBlue and/or Frontier.

I don't think SRB wants the Virgin name to disappear. Maybe a merger with JetBlue. Same fleet type, same emphasis on good IFE and service onboard, no unions at either airline, east coast / west coast presence, SRBs history with JetBlues beginnings, and the name can be Virgin Blue.

 

[Blue Dude]

That assumes VA has more to offer JetBlue as a merger partner than as a pile of bankrupt assets. I'm not sure there's a case to be made for merging.

 

[bri5150]

That assumes VA has more to offer JetBlue as a merger partner than as a pile of bankrupt assets. I'm not sure there's a case to be made for merging.

Before I was even hired at VA I thought the history with jetBlue, the east/west route structures, and the similar philosphies made us likely merge partners. I have no inside information whatever, just using my brain for theories. Hawaiian makes sense as well. Bring people in from Asia/Hawaii and our current route structure spreads them througout the country. Again, no inside info, just using my head. There seems to be a lot of Delta rumors for some reason. I have a bad feeling if that happens. They probably just want the planes to replace their old Airbus fleet.

 

[Blue Dude]

So what exactly would VA bring to the table as a *merger partner* instead of the site of a fire sale of marginally incompatible equipment? I'm not sure it would be worth nine or ten figures of debt just to get some planes with mood lighting and the wrong engines.

 

[Flyer1015]

So what exactly would VA bring to the table as a *merger partner* instead of the site of a fire sale of marginally incompatible equipment? I'm not sure it would be worth nine or ten figures of debt just to get some planes with mood lighting and the wrong engines.

Strong west coast bases/presence and landing slots. And for not having a union, at least you can't pull a SWAPA on the VA pilots.

 

[redflyer65]

With Republic trying to unload Frontier for almost two years now, I'd say a sale/merger would be remote. As BlueDude has stated, why would anyone pay a premium instead of just waiting. Airbuses aren't that hard to acquire, and I'm not sure slots in SFO and JFK are as well.

The main problem I see going forward for VA is the high cost of debt combined with a poor route structure. The route structure won't improve if you don't bring on more planes (you can only shuffle the planes you have), so it is what it is at this point. Plus you have Peter Hunt as your CFO. Ask him why he thought derivatives were a good thing in early '08. Poor choice for a CFO in the face of where things are headed.

 

[Blue Dude]

Strong west coast bases/presence and landing slots. And for not having a union, at least you can't pull a SWAPA on the VA pilots.

We can get all those things for a lot less money if we wait for VA to expire. And there's definitely no labor problem if there's no VA to merge with. I'm still waiting for a business case for taking on hundreds of millions of corporate debt to get a "presence" and some landing slots. Sorry, I'm not seeing it.

 

[Flyer1015]

We can get all those things for a lot less money if we wait for VA to expire. And there's definitely no labor problem if there's no VA to merge with. I'm still waiting for a business case for taking on hundreds of millions of corporate debt to get a "presence" and some landing slots. Sorry, I'm not seeing it.

Fortunately (or unfortunately), these kinds of decisions and things are above our paygrade and are management decisions. All we can do is hang along for the ride and then start bickering about a contract and SLI if a merger is announced.

 

[cameltoad]

going, going,,,,,,