Virgin America reported a $12 million operating loss

[NEDude]

Two weeks ago, I had a VA FO jumpseat and he said with all the deferral's of equipment, upgrade is now at 5-7 years at VA. He told me things aren't too pretty over there.

Calling BS.

The so-called 'deferrals' were only announced at the end of last week, not two weeks ago. As previously posted, they are not really deferrals, they are not taking the available options they have - all of the committed aircraft are still coming on schedule. This committed schedule was presented to the company last July. So from what the company presented as a committed delivery schedule for 2011-2013 has not changed since July of last year. Upgrades are running at just under 3 years. A person hired in the past year is looking at around 3-4 years based on the still committed delivery schedule.

You may have had someone who is not happy, but overall this is a very happy group.

 

[NEDude]

But facts, not opinions matter. Here are the facts:

1. VX has made money ONE quarter in 3 years.
2. VX is deferring airplanes.

Draw your own conclusions.

Here are more facts (it usually helps to have all the facts when having a discussion - omitting the ones that contradict your believe is not good form):

1. Virgin America is adding seven more airplanes between now and the end of 2011.*

2. Virgin America is adding five more aircraft in 2012.*

3. Virgin America has ordered 60 new airplanes starting delivery in August 2013.

4. Virgin America has just entered into a new contract with CAE to build a training center in SFO.

5. Virgin America just announced a second pay raise for the pilot group in just over a year.

6. Virgin America's 'unrestricted cash' grew 20% from the end of Q3 2010 and the end of Q4 2010 ($25 million to $30 million).

* - These are on par with the 'All Hands Meeting' presentation from July of last year. I have the slide saved on my computer from that presentation, and this is exactly what it showed. In other words there is no change from what the company had as a committed plan since at least last July.

Now, all of that being said, the finances are a concern, there is no question about that. There is a new article in Aviation Week today where the CEO states that the company will need a cash infusion if oil prices remain high. So we are not out of the woods, not by a long shot. But contrary to what many would have you believe, we are not on our death bed, and things are not gloomy here.

And the last fact, that nobody here can deny, is that none of us know the mindset of the board of directors. This is a privately held company, and the investors only have to answer to themselves. The decision to grow, shrink or pull the plug is their decision alone - it is not a blogger for Bloomberg, it is not an independent aviation analyst, and it is not some pilot for Alaska Airlines. And anyone who is not on the board of directors or in upper management who claims to know what the mindset of the investors is full of it.

 

[Fubijaakr]

How many failed airlines have you worked for? I bet you thought USA3000 would make it too.

 

[OUPilot]

I don't have a dog in this fight, but Skybus had firm orders when they ceased operations. I know people over there so I hope it works out, but you can't judge anything by orders.

 

[Fubijaakr]

I don't have a dog in this fight, but Skybus had firm orders when they ceased operations. I know people over there so I hope it works out, but you can't judge anything by orders.

Amen. Alaska was the launch customer for the MD-90. Not one MD-90 was ever flown by Alaska Airlines.

There is no such thing as a "firm" order. Until the airplane is on the ramp and the logbooks are inside, its all prospective.

 

[SMcC]

Virgin America is way, way, way beyond the level Skybus reached before their demise. Comparing Virgin America to Skybus at this point would be like comparing Ford Motor to Tucker.

 

[NEDude]

How many failed airlines have you worked for? I bet you thought USA3000 would make it too.

What does that have to do with anything regarding Virgin America?

Oh yeah, nothing but flamebait.

 

[NEDude]

I don't have a dog in this fight, but Skybus had firm orders when they ceased operations. I know people over there so I hope it works out, but you can't judge anything by orders.

True, but Skybus operated for a grand total of less than eleven months and had 12 airplanes. All of its orders came prior to the start of operations. It was not around to order 60 airplanes nearly 3 1/2 years into operation like Virgin America just did. The Skybus comparisons are a bit of a stretch at this point. Even Independence Air operated only 20 months after its rebranding. At this point Virgin America has operated nearly four times as long as Skybus, and more than twice as long as Independence Air.

Regarding those two airlines - there were far more warning signs about their impending demise than what comes close to Virgin America. Independence started having aircraft repossessed less than a year into operations. At Skybus, the company was in trouble almost from the get go, the company founder resigned that day after operations began. As I pointed out, neither of those airlines were ordering 60 airplanes 3 1/2 years into operations. Neither of those two airlines were adding destinations 3 1/2 years into operations.

For the record - I am not predicting the ultimate success or demise of Virgin America. It very well may fail, and there is cause for worry. But comparing Virgin America to two airlines who lasted less than half the time, in different markets is an invalid comparison.

 

[curtaindriver]

True, but Skybus operated for a grand total of less than eleven months and had 12 airplanes. All of its orders came prior to the start of operations. It was not around to order 60 airplanes nearly 3 1/2 years into operation like Virgin America just did. The Skybus comparisons are a bit of a stretch at this point. Even Independence Air operated only 20 months after its rebranding. At this point Virgin America has operated nearly four times as long as Skybus, and more than twice as long as Independence Air.

Regarding those two airlines - there were far more warning signs about their impending demise than what comes close to Virgin America. Independence started having aircraft repossessed less than a year into operations. At Skybus, the company was in trouble almost from the get go, the company founder resigned that day after operations began. As I pointed out, neither of those airlines were ordering 60 airplanes 3 1/2 years into operations. Neither of those two airlines were adding destinations 3 1/2 years into operations.

For the record - I am not predicting the ultimate success or demise of Virgin America. It very well may fail, and there is cause for worry. But comparing Virgin America to two airlines who lasted less than half the time, in different markets is an invalid comparison.[/QUOTE

Dude, don't feel like you have to defend your company to anyone, especially on FI. I don't know why people want to see another airline fail. There are so many stories of ruined careers it doesn't make sense to wish for more. You guys seem to run a good airline. Besides, Skybus started their operation from Columbus, OH.......enough said. And if oil keeps climbing and climbing, we are all in trouble.
Good luck, fly safe.

CD

 

[Lake Alice]

Pilots dislike VA for the same reason Jetblue was hated years ago. The pay and benefits are pathetic. Jebtlue was able to fix some of those issues. VA still has a long way to go. In the end airlines that can't be competitive in compensation and benefits are bad for all of us.

 

[weasel_lips]

Pilots dislike VA for the same reason Jetblue was hated years ago. The pay and benefits are pathetic. Jebtlue was able to fix some of those issues. VA still has a long way to go. In the end airlines that can't be competitive in compensation and benefits are bad for all of us.

The problem with the airline industry has been too many competitors in the market operating at a loss just to keep or gain marketshare. Finally the industry is correcting that by removing capacity.

Now here comes another startup... Virgin America adding capacity. Bragging about adding airplanes. The cycle continues once again. They operate at a huge loss just trying to gain or maintain market share... and in the process depress yields for everyone else.

 

[NEDude]

The problem with the airline industry has been too many competitors in the market operating at a loss just to keep or gain marketshare. Finally the industry is correcting that by removing capacity.

Now here comes another startup... Virgin America adding capacity. Bragging about adding airplanes. The cycle continues once again. They operate at a huge loss just trying to gain or maintain market share... and in the process depress yields for everyone else.

Yeah, the legacies have never operated at a loss to maintain, or gain, market share. And they have never used government loans, or protectionism to grow.

If historical profitability is the gauge for deciding which airline should live, and which should die, then there would be no industry.

 

[curtaindriver]

The problem with the airline industry has been too many competitors in the market operating at a loss just to keep or gain marketshare. Finally the industry is correcting that by removing capacity.

Now here comes another startup... Virgin America adding capacity. Bragging about adding airplanes. The cycle continues once again. They operate at a huge loss just trying to gain or maintain market share... and in the process depress yields for everyone else.

Then let history prove to be the correct process. Start-ups practically never make it. If VA continues, it will have to raise fares to survive. When any Legacy carrier begins a new market, it stimulates that market with cheap fares. A new airline entrant basically does the same thing. If the new market, or airline in this case, doesn't create the demand necessary.........it fails. That is as simple as it gets for VA.

But, if a pilot group of the said start-up doesn't eventually reach parity, then I have no remorse if that group hits the streets. In my opinion, I don't believe that burden should be cast upon VA pilots yet. If I had it my way, there would be a single pay system amongst all the carriers, and it would be up to the company to find a way to compete. That is a pipe dream, obviously.

CD

 

[DB Cooper]

I would think a more useful comparison would be Jet Blue at the 3.5 year mark. Not Skybus or Indy.

DB

 

[Fubijaakr]

jetBlue was crowing that they'd have 200 Airbus knocking out the legacys with their "new paradigm".

The only thing that saved jetBlue is that they were the "hometown airline" in the biggest O/D market in the world.

How many airplanes do they have 10 years later? 115 A320 and 36 E190. Not quite the 200 they were gloating about.

Virgin pilots are doing the replay. Gloating about airplanes they don't have. Unfortunately, they don't have the "hometown" tag on the largest O/D market either. SFO and LAX are cutthroat and they can't seem to get established anywhere else. SNA and YYZ were busts. They'll be out of DFW by Xmas. And United just dumped 16 flights on top of them in ORD. They won't last there, either.

Comparing Virgin to jetBlue has holes big enough to drive a Mack truck through.

 

[SMcC]

...How many airplanes do they have 10 years later? 115 A320 and 36 E190. Not quite the 200 they were gloating about...

Do these numbers qualify as failure, as you're suggesting?
I don't think so.

 

[hateairlines]

Actually JBLU will have 169 airplanes this fall. Not bad considering 9/11, $100+ oil, and one of the worst recessions ever. Not 200 but still not bad??

 

[OurMoney1]

Who knows VA may last forever but the investors are suckers because with the losses to date it is obvious they have been taken for a ride.

Its a birdie on a wire and the people holding the wire have been duped.

 

[BeachBummer]

jetBlue was crowing that they'd have 200 Airbus knocking out the legacys with their "new paradigm".

The only thing that saved jetBlue is that they were the "hometown airline" in the biggest O/D market in the world.

How many airplanes do they have 10 years later? 115 A320 and 36 E190. Not quite the 200 they were gloating about.

QUOTE]

Gosh... we ought to close the doors right now... I can't believe that we only have 150planes flying(I think more but I'll have to check) in a decade that brought us terroist attacks, multiple economic down turns and the most expensive fuel cost in history.

JetBlue sucks.

Maybe I missed your point?

 

[Fubijaakr]

Do these numbers qualify as failure, as you're suggesting?
I don't think so.

Not 200 but still not bad??

Maybe I missed your point?

You all obviously missed the point. Don't be so defensive. Nobody said jetBlue wasn't a decent niche carrier. Your management saw a hole in the NYC market and filled it admirably. Its allowed you to become a stable place to work.

The point was that when you started, you pilots were all over the internet crowing about how you'd have 200 airplanes by 2004 and would drive the legacies out of business. It didn't happen.

Now we see the Virgin pilots doing the same thing.

jetBlue's advantage that allowed them to become a stable airline was the fact that they carved a niche out of the Big Apple, the world's biggest media and O/D market.

Virgin won't be able to replicate that because SFO isn't JFK. The legacies won't ignore the VX assault on the West Coast because jetBlue taught them the peril of doing so.

The only comparison I was making was the hubris of the initial jetBlue pilot cadre and the current VX roosters. While jetBlue had a market and the NYC media behind them, all VX has is Sir Dick's money, mood lighting and busboy uniforms for pilots.

 

[SMcC]

...The only comparison I was making was the hubris of the initial jetBlue pilot cadre and the current VX roosters...

I understand you're clarification.
What about the hubris of those that condemn Virgin America pilots for going to work for a non-union airline, at lower than legacy airline pay rates? These guys don't want to work for $110/hr! But they do want to work! And they see the potential of the company and the prospect for possibly substantial pay improvements in the future.

The legacy airlines will always have to face competition, and start ups will come and go. I can't say it enough, blaming the pilots is unproductive.

 

[SMcC]

We all know that there has been a union push at Jet Blue. I bet there are Virgin America pilots thinking the same. So instead of condemning them for choosing to fly for a start up how about we encourage them to bargain collectively.

 

[Mr Wu]

So instead of condemning them for choosing to fly for a start up how about we encourage them to bargain collectively.

Never gonna happen. Fubijaaker or Fishfreighter or Velocipede or whatever his log in is today will spout off on each of these boards that VX and AAY are pulling the industry down but all he will ever do is beat his chest about it and throw crap. He walked into his cushy Alaska job after ALPA was there and advertises himself as their champion. If he really cared about the industry and the pilots, he would work for VX or AAY and help get ALPA on board. I guess he doesn't have enough time, what with all the open time he is picking up with his brethren on the street.

 

[BeachBummer]

SMcC, thanks!


I'm gonna go find a bottle of ol'crow. I should know by now not to feed the trolls!

 

[NEDude]

Who is doing any bragging? You come on here and start trashtalking, then when you get faced with the facts, you run and hide, throw out more flamebait, or accuse others of ''bragging". Every prediction you have made has been wrong fishfreighter, I am sure it must get tiring. BTW here is another one which will be wrong - DFW has been extremely successful, and more frequency was just added. We will still be there come December.

 

[Grandpa +65]

Quote. "DFW has been extremely successful, and more frequency was just added. We will still be there come December".

Yeahh! Right. Selling Groupons-tickets at $99 dls to DFW, ORD, JFK, BOS the load factor will be 100% But definitely the VA won’t make any profits. Branson might have to pump more money out his pocket to keep afloat the Flying Boutique Airline.

 

[Fubijaakr]

These guys don't want to work for $110/hr! But they do want to work! And they see the potential of the company and the prospect for possibly substantial pay improvements in the future.

What you don't seem to understand is that when pilots fly A320s for $110 an hour, they hurt YOUR ability maintain the pay rates that jetBlue pilots have gained over a decade. The problem with your situation is that you have no contractual protection if B6 management decides to cut you down to VX rates.

Quote. "DFW has been extremely successful, and more frequency was just added. We will still be there come December".

Yeahh! Right. Selling Groupons-tickets at $99 dls to DFW, ORD, JFK, BOS the load factor will be 100% But definitely the VA won’t make any profits. Branson might have to pump more money out his pocket to keep afloat the Flying Boutique Airline.

Facts don't matter to the VX true believers.

 

[SMcC]

What you don't seem to understand is that when pilots fly A320s for $110 an hour, they hurt YOUR ability maintain the pay rates that jetBlue pilots have gained over a decade. The problem with your situation is that you have no contractual protection if B6 management decides to cut you down to VX rates.

You can't get around competition. Start ups will happen, and when they do they will never start their operations with pilots paid at legacy carrier rates. Can you name one unionized pilot group that did not have to build from humble beginnings?

I think it's safe to say that not one pilot walked into Jet Blue 10 years ago thinking "Gosh I hope they don't ever raise the pay here." Same goes for Virgin America now.

My point is that hating these guys for trying to hitch a ride on an up and coming company does not help anyone. Let's hope instead that they will be future union brothers.

 

[NEDude]

Facts don't matter to the VX true believers.

Fishfreig....er I mean Fubijaakr, if you are such a fan of facts, why then do you fail to acknowledge any facts other than the ones you chose to post? Do legacy carriers have fare sales to stimulate demand in new markets? Do legacy carriers increase frequency in the name of competition? Did ALPA open the door to outsourcing mainline, legacy jobs to bottom feeding regionals? Do mainline legacy carriers pull out of cities? Has ALPA failed to make a serious effort at a national seniority list or industry pay rate?

You accuse others of putting on blinders and ignoring facts when you are the biggest culprit of all.

You get up on your bully pulpit and preach how ALPA can do no wrong, legacy carriers are faultless and all start-ups are evil. Yet when confronted with the facts, you call names or run and hide for a few days, only to start another VX bashing thread while avoiding answering the questions posed to you. I am guessing what is happening is you see the facts, run back to your ALPA handlers to get their spin, and when there is none to counter it, you just start a new thread.

 

[SpeedBird]

The irony here is if Fubi was in the shoes of VX pilots today, and had to put food on the table for his family, he would happily submit his impressive resume to the HR department in Burlingame for serious consideration. Luckily for him, fate and good timing cleared another path for his career. Bottom line, he is a bomb thrower and troll with nothing of value to bring this and other forums he has visited over the years.