Virgin America QOL

[HRDiva]

Many pilots have directly called ADP and the ADP employees have said it was ADP'S fault. Something about a mix up because we had a performance bonus paid around same time and that had to be paper check. For what it's worth...

How would one call ADP directly? I have been in HR for years and an ADP client for 14 years. Not one of my employees would ever think to contact ADP if there was a problem with their pay. They would call Payroll and/or HR.

I surmise it was an operator error in that Payroll ran the out of sequence payroll (performance bonus) on top of the regular payroll. That turns off direct deposit. What should have happened was the regular payroll info should have been deleted, the out of sequence payroll run, then the regualar payroll entered; direct deposit would have remained intact. What is also interesting is that employees apparently didn't know about it until their pay failed to hit their bank accounts. At least the day before payroll hits, Payroll gets a report that shows live checks vs. direct deposits. It should have become evident then and they should have proactively notified employees instead of merely putting the live checks in the mail. Just my 2 cents from the peanut gallery...

Carry on...

 

[Andy]

Andy:

I cannot quite recall, but weren't you the one illustrating the Airtran "death spiral" financing back in 2009? Do you draw any parallels to the Airtran situation and V-America? I'm not sure how it's all going to work out for Virgin America but it seems they have a lot of believers so they must have something over there.

Yes, that was (I think) around 2008 when Airtran was spending their cash faster than Charlie Sheen on a Vegas bender. They were aggressively taking delivery of 737s and their cash on hand dropped to dangerously low levels.
Airtran fixed their issues by taking two actions:
1) Cancelling 737 orders (Virgin America has done the same, which will help) and
2) they did a secondary stock offering where they raised more than $500 million in cash. Following the secondary offering, Airtran management became very disciplined with their cash on hand.

Since VX isn't a public company, I don't know how they're financing their debt but it would likely be structured very differently than Airtran's 'death spiral' bonds. IIRC, Airtran's bonds had a painful trigger that started when their stock price fell to ~$3/share. When Airtran used those bonds to finance debt, their stock was trading in double digits so it wasn't an expected outcome. As their cash on hand became depleted, the stock fell quite a bit, getting close to triggering some covenants in the bond financing. I didn't short the stock but read some investor chatter where they viewed Airtran as dead because of their low cash on hand.
If Virgin America can turn things around where they're not bleeding cash, they can do an IPO which would allow them to pay off a lot of their current debt; based on last quarter, they're now up to paying more than $100M/yr in interest on their debt - that needs to be reduced and if they were able to raise close to $1B in an IPO, they'd be able to pay down almost all of their debt.
On the bright side for VX, Virgin Group sold most of Virgin Media to Liberty Global last night. I don't know how much cash that raises but it will allow Virgin Group to invest additional money into Virgin Atlantic and VX.

It's possible for VX to turn things around, but they need to start showing some discipline in managing their cash on hand. The only action I've seen taken to date is cancelling Airbus orders; they need to do more than just cancel orders to stop the red ink. I'm not saying it can't be done but with their current cash burn rate, they're running out of money. I don't know what they need to do to fix their business model; hopefully they can tweak it to the point where they're profitable.
If I see signs of VX turning things around, I'll be happy to acknowledge a change in conditions; to paraphrase John Maynard Keynes, I change my opinion when the facts change. In 2007-2010, I was a huge bear on real estate. In 2012, I started investing in real estate and plan on buying an additional 3 houses in 2013, as I think that real estate is turning into a screaming buy.

Don't change your words now. I already got you quoted saying VX will need $100 million infusion to last another year, 2013. We'll see if VX lasts through 2013, and how it does it.

Flyer1015, I threw out the $100M number based on the cash burn rate and the rediculous comments I read on this board in response to Cush saying that the Monday announcement was going to be a 'HUGE announcement; 9.5/10'. I don't consider adding SJC as a destination to qualify as a HUGE announcement. Nor did I consider a pay raise or a possible Flygirls sequel as a HUGE announcement. I was expecting to see something about Q4 numbers, as there's been more than enough time since the end of the quarter to have completed the number crunching. Or even that an additional US investor was going to take a stake in VX. Call me weird; I consider corporate survival to be a top priority.

 

[bri5150]

I am the one that posted 9.5/10. I am on my phone, so I am not going to search for post and read my wording. With this "huge" announcement, I had my doubts on huge. I agree sjc isnt huge. No route stuff really is. As far as numbers, we never release until just before dot releases.

 

[Flyer1015]

No Andy, I'm going to call you weird because you spend way too much time writing about a company you have not worked for, do not work for, and have no plans to work for. And you didn't just throw out the 100 million figure, you wrote that how is VX going to make it through another year without another 100 million influx. We will see.

 

[Andy]

No Andy, I'm going to call you weird because you spend way too much time writing about a company you have not worked for, do not work for, and have no plans to work for. And you didn't just throw out the 100 million figure, you wrote that how is VX going to make it through another year without another 100 million influx. We will see.

You guys insist that I provide precise references to my statements. That requires some research. Now you ridicule me for it. Whatever.

 

[clickclickboom]

Andy,

These kooks are brainwashed. Their airline is only a few quarters away from losing ONE BILLION DOLLARS and you have to defend yourself?

Ya thats right they all have the secret inside info.. You know that the investor scam is paying prime plus 10% just so these illuminati investors dont punch out.. Hell its probably more

Uh oh im gonna get shelled because my investment return data is not accurate !!! lmao

 

[DCMartin]

Andy,

These kooks are brainwashed. Their airline is only a few quarters away from losing ONE BILLION DOLLARS and you have to defend yourself?

Ya thats right they all have the secret inside info.. You know that the investor scam is paying prime plus 10% just so these illuminati investors dont punch out.. Hell its probably more

Uh oh im gonna get shelled because my investment return data is not accurate !!! lmao

Hit the nail on the head here. This place sometimes feels like a Ponzi scheme w an airline attached to it. Also, the rumor in Dec was that we already received another 200 mil injection. Looking forward to Q4 cash to get more of the story. Myself and many others have thier logbooks up to date and apps out to other places. I feel bad for those guys hired with no TPic. Love working here but can't be oblivious to reality.

 

[NEDude]

Andy,

These kooks are brainwashed. Their airline is only a few quarters away from losing ONE BILLION DOLLARS and you have to defend yourself?

Ya thats right they all have the secret inside info.. You know that the investor scam is paying prime plus 10% just so these illuminati investors dont punch out.. Hell its probably more

Uh oh im gonna get shelled because my investment return data is not accurate !!! lmao

Let me make it very simple for you - the experts have predicted our imminent demise for nearly four years. Have they been right yet? We are a privately held company, do you, or any of the experts have accurate, or inside information as to the true financial position of VX, where the money comes from, where it goes, and at what rates?

There is no question VX has not performed anywhere near what the hopes have been. Nobody is denying that. But as bad as VX has been financially, their track record is still FAR better than the track record of those who have been predicting the imminent shutdown VX for four years now.

You can believe all you want. You can come on here and claim to have all the inside knowledge, have analyzed all the financial reports, etc. You can claim we are all stupid for being at VX and that we will all be on the street soon. But at the end of the day we are still here, just like we have been at the end of every day for the past five and a half years, despite the predictions of you so-called "experts".

 

[DHPFLYN]

Is Virgin still hiring? Aside from the same 4 people arguing all day I haven't seen anyone post interview results.

 

[Flyer1015]

Yes, interviewing currently, application window still open, and class dates in March and April.