Virgin America financials.

[blackbox]

Andy seems to catch a lot of crap for trying to explain financials. I dont know what his background is in other than the planes he has listed under his handle. But he seems pretty knowledgeable.

I think VX is great. I wish they paid more, but the company has been good to me, and love the culture. But at the same time you have to be realistic. The numbers arent good, and Andy is just trying to explain that. If you were purely a wall street guy or some sort of investor, would you throw money at Virgin? I wouldn't. The financials just dont look solid enough to think I am gonna get a return, let alone a decent one. He doesnt seem to be one of the "haters" out there that I have seen on this board. He just might be saying stuff you dont want to hear. Which is understandable. I dont want VX to go under considering they provide me with a paycheck, but he is looking purely at numbers and well, the others are looking through rose colored glasses. I hope Andy is dead wrong. but I dont blame him for thinking the way he does. All we can do is fly straight and "create wow". If we keep doing that, then maybe Virgin will be the next Southwest or JetBlue. Who knows. Dont stress over what you cant control.

 

[Flyer1015]

No way are we the next SWA, if defined as a 500+ aircraft operation, or Even JetBlue size. Right now the projected fleet at the end of 2022 is 93, and that is realistically the size we could be.

Andy is basing knowledge on his own math and analysis based on documents he doesn't have access to at the moment. So it's all speculation anyway.

 

[blackbox]

Btw, what do you know about Peter Hunt. Does he have a reputation other than from Pinnacle and his auction rate securities debacle?

 

[LoveGun]

Andy, thanks for the George Orwell quote -- it brought me back to eighth grade English class. Those were good times.

Have you ever heard the saying, "If all you have is a hammer every problem looks like a nail."? Similarly, if all you've ever read is Orwell, then every social structure you encounter looks like a totalitarian government in a dystopian future.

Yes Andy, I understand your reasoning. Basic arithmetic is not hard to follow. However, you don't know all the variables and there are flaws in your reasoning. In one of your earlier posts you say something like "Virgin should have enough money to limp o an IPO." Isn't that the point? To make it to an IPO and raise enough money to pay off our debt? Virgin is operationally profitable -- loose the debt and we're net profitable.

I grant you that I don't know anything about accounting so you can out jargon me there all day long. My question is, why, if we are such a risky investment, did the bank just lower our interest rate? After all, unlike you, the bank has access to all our financials and has their own money riding on VA. Or maybe Peter Hunt just discovered loweryourrate.com?

 

[redflyer65]

Why do they continue to throw good money after bad? Branson and the rest of the investors are trying to get this pig to an IPO. They have the potential to make a lot of money with an IPO. That simply means that they'll be selling the company to a bunch of new bagholders.

Andy,

I agree with the above comment, but couldn't Branson also be hoping for a relaxation on the Cabotage laws in the future as well?

He would love to link all the Virgin brands into one, but I don't see it happening anytime soon so the IPO angle makes more sense..shorter term.

 

[Andy]

Well Andy, you did say at one point there was no possible way we could have made an operational profit 4q2012. Yet, here we are. Is it possible you don't have all of the financial inner workings of VX? Also, is it possible he uses the VA abbreviation with friends and family because it is easier and it just slipped on the forum here?

Wrong.

$15-30M operating profit. It's a wide range because I'm basing my CASM costs on Q3 CASM and I don't know how much variation there was from Q3 in fuel expenses.

The Q4 Form 41 DOT release date is May 14.


I really hope that VX can continue to rationally price their product; there's no reason why they can't turn a profit in the current environment. What has happened in the past is that VX has lowered prices and then everyone matches. When VX raises prices, everyone matches. And then VX cuts again and everyone matches. The better solution is to sell the seats at a profit, especially considering that they could get a lot of last minute (higher priced) bookings.

Page 3 of this thread has several of my posts: http://forums.flightinfo.com/showthread.php?t=152751&highlight=fares&page=3

I calculated a 78.06% Q4 load factor; it was 76.9%.
I modeled a 10.44 (Q3) CASM; it was 11.17.

The DOT released this on May 14:

Tuesday, May 14, 2013
Largest Airlines Report Smaller Net Loss in 4th Quarter of 2012

Largest airlines. The DOT hasn't included VX in largest airline.

They have included them in LCC releases:

March 12, 2012
3rd-Quarter 2011 Airline Financial Data: Network Airlines, Low-Cost Airlines and Regional Airlines All Report Profits

as an example.

That's not form 41 data. You'll find it here: http://www.transtats.bts.gov/Fields.asp?Table_ID=279
Click on 'Analysis' for each column and it brings up the form 41 data for each line.

Btw, what do you know about Peter Hunt. Does he have a reputation other than from Pinnacle and his auction rate securities debacle?

Talk to someone who was a Pinnacle during his tenure. He levered up the company and played a lot of shell games. It wasn't just one (auction rate securities) incident.

 

[Flyer1015]

It would be better job security to link all the Virgins to one.

 

[Flyer1015]

Most people here say VA to mean Virgin America in the LCC thread. Many know the code is actually VX, but just for simplicity terms people say VA. I wouldn't use this as a "a ha!" moment to dismiss someone's opinion.

 

[bri5150]

Andy,

You found it "incredibly hard to believe" in the "Delta Sea-Anc" thread.

 

[Skank]

Andy, that's why you're going to be the guy writing the book and I'm just a stupid airline captain -- you know your two letter codes! Editors love that attention to detail.

I can't wait to see your first CNBC interview... "Today we have as our guest Andy. He's a well known airline forum guru and the author of the current best seller 'Virgin?! The Not So Immaculate Conception'..."

I don't want to interrupt this discussion, but I think we need to acknowledge the quality of that potential book title. If the book is ever written, there's a damned good title.