Virgin America QOL

[bri5150]

Virgin America Cancels 20 A320s

Posted byBRIAN BOSTICK2:13 PM on Jan 17, 2013



Virgin America has cancelled 20 A320s, bringing its total orders for the type from 69 to 49.

In December 2005, Virgin America placed an order for nine A320s, all of which have since been delivered. In December 2010, Virgin America placed another order for 60 aircraft (30 A320s and 30 A320neos), the total of which has now been reduced to 40.

Eight A319s were also ordered in December 2005, all of which have also been delivered.

I guess I am extremely confused by your post. It says it happened two days ago, but it is actually the news from November, right? Even if we cancelled all of the orders we still have, it wouldn't make a difference at this point because they aren't supposed to be here until 2019 now. Just a few things can happen in this industry in 6 years.

 

[Splert]

Using returned deposits to buy dead dinosaurs.

 

[Andy]

Who do our lease payments go to?

VA's planes are leased from quite a few different lessors.
GECAS owns 10 aircraft
Wells Fargo owns ~9 aircraft
Aviation Capital Group owns 6 aircraft
Jackson Square Aviation owns 4 aircraft
Sahaab Aircraft Leasing (a subsidiary of Jazeera Airlines) owns 4 aircraft
AWAS Aviation Capital owns 2 aircraft
Ds 128 Flugzeugfonds III Trust A Statutory Trust owns 2 aircraft
FLY Leasing owns 1 aircraft

The rest are leased from single aircraft leases from trusts that are set up, making it difficult to know where the money goes.

Not a single aircraft is owned by VX; they are all leased.

Does Branson pay our investors through back doors?

I have no idea. Do you know if he pays VX's investors through back doors? If so, please elaborate.

Is the fight to get this airline going in the first place worth just giving up on after just 6 years?

Virgin Brides (1996-2007)
Virgin Clothing (1998-2000)
Virgin Cars (2000-2005)
Virginware (2003-2005)
Virgin Megastore (1992-2009)
VirginStudent (2000-2005)
Virgin Express (1996-2006) - airline
Virgin Charter (2007-2009) - airline

Virgin Atlantic has been bleeding cash and just got a new CEO last week.

Sir Richard has neither unlimited patience nor funds.

Your comment on Q1 shows that you really don't know much about what is going on here. "Probably" a draw down?

So the 3 percent capacity reduction and voluntary leaves of absence offered in Cush's October letter was my imagination? http://skift.com/2012/10/17/virgin-...ployee-leaves-to-cut-costs-for-a-slow-winter/

Does the word 'probably' by me indicate that I have no idea what's going on? Things can change significantly between October and January in this business.

What will our network look like a year from now, since you are in the know?

I don't know what VX's route network will look like in a year, and neither do you. I'm waiting to see the response from other carriers to VX's foray into the LAX-LAS market. We've already seen UAL's response to their SFO-EWR addition. I wouldn't be surprised to see AS and LUV join in on the feeding frenzy in markets shared by VX.

Aren't we overstaffed? Why would we need to hire because of the loss of 14 guys to United if we are overstaffed?

Overstaffed? Are you new to the airline industry? (No need to answer that; my guess is that you've been flying professionally since ~2005). Winter is always overstaffed vs summer.

Do you think that the loss of 14 is the end of VX's pilot losses when the majors are spooling up hiring?
How many AMR furloughees are at VX? AMR's going to be recalling and then hiring for a long time.

Okay, more cheerleading I guess. IF we have a net profit q4 as rumored, I guess I don't see how we are in a death spiral. Obviously it wouldn't mean we are instantly viable and will be around forever, but it would certainly mean we are more on the upswing instead of the death spiral everyone thinks we are in. Unless you base your ups and downs on aircraft deliveries I guess.

Q4 net profit? Is that with creative accounting? Q3 has always been VX's strongest quarter and VX still didn't make a net profit.

 

[RiddleEagle18]

I guess I am extremely confused by your post. It says it happened two days ago, but it is actually the news from November, right? Even if we cancelled all of the orders we still have, it wouldn't make a difference at this point because they aren't supposed to be here until 2019 now. Just a few things can happen in this industry in 6 years.

No.

In November there were aircraft deferrals. These were cancellations.

 

[bri5150]

VA's planes are leased from quite a few different lessors.
GECAS owns 10 aircraft
Wells Fargo owns ~9 aircraft
Aviation Capital Group owns 6 aircraft
Jackson Square Aviation owns 4 aircraft
Sahaab Aircraft Leasing (a subsidiary of Jazeera Airlines) owns 4 aircraft
AWAS Aviation Capital owns 2 aircraft
Ds 128 Flugzeugfonds III Trust A Statutory Trust owns 2 aircraft
FLY Leasing owns 1 aircraft

The rest are leased from single aircraft leases from trusts that are set up, making it difficult to know where the money goes.

Not a single aircraft is owned by VX; they are all leased.



I have no idea. Do you know if he pays VX's investors through back doors? If so, please elaborate.



Virgin Brides (1996-2007)
Virgin Clothing (1998-2000)
Virgin Cars (2000-2005)
Virginware (2003-2005)
Virgin Megastore (1992-2009)
VirginStudent (2000-2005)
Virgin Express (1996-2006) - airline
Virgin Charter (2007-2009) - airline

Virgin Atlantic has been bleeding cash and just got a new CEO last week.

Sir Richard has neither unlimited patience nor funds.




So the 3 percent capacity reduction and voluntary leaves of absence offered in Cush's October letter was my imagination? http://skift.com/2012/10/17/virgin-...ployee-leaves-to-cut-costs-for-a-slow-winter/

Does the word 'probably' by me indicate that I have no idea what's going on? Things can change significantly between October and January in this business.




I don't know what VX's route network will look like in a year, and neither do you. I'm waiting to see the response from other carriers to VX's foray into the LAX-LAS market. We've already seen UAL's response to their SFO-EWR addition. I wouldn't be surprised to see AS and LUV join in on the feeding frenzy in markets shared by VX.



Overstaffed? Are you new to the airline industry? (No need to answer that; my guess is that you've been flying professionally since ~2005). Winter is always overstaffed vs summer.

Do you think that the loss of 14 is the end of VX's pilot losses when the majors are spooling up hiring?
How many AMR furloughees are at VX? AMR's going to be recalling and then hiring for a long time.



Q4 net profit? Is that with creative accounting? Q3 has always been VX's strongest quarter and VX still didn't make a net profit.

I don't know if he pays them through back doors, that's my point. Nobody knows except Branson and the investors. If Branson is backing us, then I imagine we would stick around longer.

Virgin Express was merged with another airline. They didn't get shut down...which is better in my book. They also had 26 737's. We have twice that amount of aircraft. Again, I don't think we have unlimited money. I think the new exec is the last push to get this place functional. If his strategy doesn't work, I believe we will be done, either through merger or shutdown. Hopefully the former. According to wiki (weak source) Virgin Charter wasn't an airline. It was a "marketplace for selling, purchasing, and booking charter flights on private aircraft".

Yes, you said "probably", so I didn't know what year you were talking about. It is already Q1, so it isn't "probably" anymore.

I don't think that the 14 is the end of it. It is just the beginning of people leaving here. Fine by me. I plan to stick it out (as of now...I know things change).

As far as Q4 profits are concerned, I guess we'll see. If it is a net profit, then we are in good shape going forward (my opinion). If not, then I think we have a long road to hoe.

 

[Pez D. Spencer]

No.

In November there were aircraft deferrals. These were cancellations.

Paragraph 4 of the November earnings press release shows that there was a reduction of 20 orders -- cancellations. So, this isn't new.

 

[Pez D. Spencer]

VA's planes are leased from quite a few different lessors.
GECAS owns 10 aircraft
Wells Fargo owns ~9 aircraft
Aviation Capital Group owns 6 aircraft
Jackson Square Aviation owns 4 aircraft
Sahaab Aircraft Leasing (a subsidiary of Jazeera Airlines) owns 4 aircraft
AWAS Aviation Capital owns 2 aircraft
Ds 128 Flugzeugfonds III Trust A Statutory Trust owns 2 aircraft
FLY Leasing owns 1 aircraft

The rest are leased from single aircraft leases from trusts that are set up, making it difficult to know where the money goes.

Not a single aircraft is owned by VX; they are all leased.

Leaving the rest of the quote out, but good research.

(Having a small background in buying and selling jet aircraft, but not on this scale...) This is quite typical of airline financing. Jetblue and Spirit probably have many of the same types of leases set up -- as a matter of fact I woukd bet you a beer that if you pulled up all of the individual LLC's or trusts that actually own those airplanes, you will find one or two that hold Jetblue and Spirit aircraft as well. Without a detailed breakdown of VA's earnings, which will not happen unless they go public, it is likely the actual losses will not be apparent. The earnings press releases they issue lack those details -- in the November report aircraft rents and fuel are counted... and they make a profit... then you hit that last line and it says something like "interest expense, net" -- goes to a loss. Well, I would want to know, interest on what? Aircraft rents were itemized. My guess is that it is interest paying back the principles in the deal. I don't understand that logic, but it's Cushman that has to answer for it ultimately.

 

[clickclickboom]

JB actually owns a very small percentage of planes.. many are leased or financed but we have started in the last two years paying cash for planes and owning them outright. A smart move in my opinion as it is an asset and not a liability.

As for VA I cant see any angle that shows a silver lining. I cant even see an even slight incentive for any type of possible merger. Your route system is horrible and was based on the premise that people would like VA more an as a result pay more for your product. That experiment failed

What is possibly left of value? The new lax-las route? low yield transcons with $3 jet fuel and legacy capacity?

It's like the hot girl at the party that is hot as hell yet dumb as a rock and a bad lay to boot...

 

[Pez D. Spencer]

JB actually owns a very small percentage of planes.. many are leased or financed but we have started in the last two years paying cash for planes and owning them outright. A smart move in my opinion as it is an asset and not a liability.

As for VA I cant see any angle that shows a silver lining. I cant even see an even slight incentive for any type of possible merger. Your route system is horrible and was based on the premise that people would like VA more an as a result pay more for your product. That experiment failed

What is possibly left of value? The new lax-las route? low yield transcons with $3 jet fuel and legacy capacity?

It's like the hot girl at the party that is hot as hell yet dumb as a rock and a bad lay to boot...

I don't work for VA. But, I think you have missed on their "premise". I do agree that their route structure needs some serious work, and they hired a guy to do that. I would want to add some shorter routes -- however, their market is primarily bigger cities and catering to a different clientele -- and Bubba from Des Moines will probably not give a hoot about mood lighting. Maybe some north to south and vacation destinations outside of the west coast. We'll see what they come up with. If you have not had the chance to ride them, you ought to try it out, it really is a good product.

 

[Flyer1015]

No.

In November there were aircraft deferrals. These were cancellations.

No, November cancelled 20 Airbus orders. What you posted was the news in November. The original plan was 60 planes. 30 current engine A320s from 2013-2016, and then 30 A320 NEOs from 2016-2019. The change was NEOs deferred to 2020-2022, and the current engine airplanes the order changed to 5 in 2015 and 5 in 2016. Down from the original 30, so that means 20 were cancelled. In conclusion, in November both deferrals and cancellations were announced. No new upate on aircraft orders/deliveries since the November annoucement.