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VBA - Virgin Blue Holdings

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JetDollars

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VBA - Virgin Blue

VBA really going blue today as well, heading south since the market open.
 
Re: VBA - Virgin Blue

Its been a double blow for VBA. The increased competition from Jetstar means that they will have to wear a large percentage of the costs from higher oil prices rather than passing it on to consumers. This situation coupled with the loss of market share will hurt them badly.
 
Re: VBA - Virgin Blue

Yeah, what happened yesterday? Yahoo doesn't show any current news items about them.

GP


*** Oh thanks, Profithunter. So that's what's happening.
 
Re: VBA - Virgin Blue

Hi Guys

VBA is at its lowest levels since listing, while in the short term it is hard to see it moving up, it must start to look like a long term buy if it drops much further. I notice "huntley" still gives it an "avoid" recommmendation.

I'd be tempted as i still think they have a significant role to play in the expanding aviation industry.

What do you guys think?

regards westan
 
Re: VBA - Virgin Blue

I think that maybe VBA has been a victim of its own success. It rapidly gained 30% of market share and became a success story. But once it listed it was hard to forsee any significant future growth. Now it seems to be losing since the inception of Jetstar
 
Re: VBA - Virgin Blue

Hi Guys

I'd be tempted as i still think they have a significant role to play in the expanding aviation industry.
Click to expand...

Westan

Why do you see the aviation industry as expanding, and specifically the airLINE industry? Seems to me that passenger travel is likely to be squeezed by prices and terrorism (I think we'll eventually get used to terrorism and treat it like the risk of earthquake in NZ, but it'll take a while), and if oil prices keep rising rail might actually start to look like a winner for freight. I think airlines are going to be fighting for share in a static market for a long time.

Ghoti
 
Re: VBA - Virgin Blue

Yeah, what happened yesterday? Yahoo doesn't show any current news items about them.

GP


*** Oh thanks, Profithunter. So that's what's happening.
Click to expand...

GP not sure if you're referring to Profithunter's msg here or to a pointer to some other news.

VBA were in the news last night and in the general press today because they said "its profits had slumped 22 per cent for the first four months of this financial year."

You can find a report at http://www.smh.com.au/articles/2004/08/04/1091557921280.html

Cheers,

Ghoti
 
Re: VBA - Virgin Blue

Hi Ghoti

i said expanding aviation industry because people are flying more and more these days a trend i think will continue to happen.

You are right the margains are no as hiogh as they once were. We have to remember the aviation industry is littered with the debis of backrupt airlines.

Can Virgin's model survive ??? I expect Yes.

regards westan
 
Re: VBA - Virgin Blue

People are flying more because the price has come down. However the airlines are eating themselves in order to keep their margins low.
The margins at the moment are so thin that any extra cost (like the oil price) can really hurt, especially when
(like Virgin) they don't have the option of passing the costs on to the travelling public due to increased competition.

I don't have any great confidence in the airline industry at the moment, but I do expect Virgin to survive.

regards,

Rod.
 
Re: VBA - Virgin Blue

Thanks for the news link, Ghotib. Hadn't seen that.

GP
 
Re: VBA - Virgin Blue

Hi all,

If looking at profit margins, Virgin Blue is MUCH better than JetStar. In fact the average cost per kilometer of airtravel for Virgin Blue continues to fall, even with the rise in oil prices and the competition from JetStar. One thing is certain - the cometition between the airlines cannot go on forever. Qantas will have to keep injecting cash into JetStar to keep up this war.

Don't expect Virgin Blue to die lying down! They are smaller, but a lot more versatile than Qantas (JetStar cannot beat the deals they have with Boeing & various airports) I think the stock still has some kick in it and is good value at current levels.

Time will tell...
 
Re: VBA - Virgin Blue

For what it's worth - an industry insiders view (I work for the red tail mob)

The industry itself is only going to get harder from here. We have to deal with rising fuel costs, rising costs due to terrorism prevention (which we all know dont work), rising airport and operation cost etc. These are matched by falling margins and more competition. People seem to think that VBA's only competitiors are Qantas and Jetstar. What they dont realize is that more and more other overseas airlines are competing both on a domestic and international scale. With Emerities now - not only can you fly from overseas to any capital city in Oz but you can also fly internally with them. This means that the tourists coming over dont just land at Syd or Mel and then get on VBA or QAN to get around Oz.

You also have to consider the value of Jetstar to Qantas. If it lost $100-$200 million per year every year and was not likely to ever make a profit (no - I'm not saying that it will make a loss) it would be seen by Qantas management as a bargain. Not only is it taking VBA's eye of the ball (and stealing more market share) but it also prevents other major airlines from setting up domestic competitors (believe me Singapore have tried to do this several times now and have pulled out at the last moment). Then you also have the "wannabes" such as that formula one guy that is still trying to set up Ozjet. There are also many reasons (mainly cost savings) for getting rid of the B717's and replacing them with much cheaper A320's.

Not taking anything from VBA - look at what has happened since it set up in Oz. Ansett colapsed (twice), Olympics, 9/11 (actually very profitable for Oz airlines domestically because everyone cancelled overseas holidays and travelled around Oz instead) and other things that probably only matter inside the aviation industry. It would almost be impossible NOT to have grown like they did.

And the final word that is always going around the hallowed halls at Qantas...."If you could make money in airlines - Packer would have 2"
 
wow no mention here in a long time..
Is VBA still planning to start their international service from aus?
I have a small amount in VBA and its been pretty much stagnant..
 
anyone holding VBA now?
im planning to sell off after no change in months. And no word on their aus international market
 
barnz2k said:
anyone holding VBA now?
im planning to sell off after no change in months. And no word on their aus international market
Click to expand...

A lot of broking firms are putting them on SELL, so i guess thats wats leading it to the down trend.
 
UPKA said:
A lot of broking firms are putting them on SELL, so i guess thats wats leading it to the down trend.
Click to expand...

I'm liking VBA for a nice short position here...

Chart wise, we have a nice little downtrend established, we've had a nice rally, but it's clear we have lower lows and higher highs. We are flirting with that 200d MA, and all other indicators point downwards.

From a macroeconomic view point, we have two significant factors - the price of oil increasing (and I can only see it going upwards from here) and the inevitable spate of price wars between it, Jetstar and Tiger. My view has always been that more than 2 airlines in Australia just doesn't work because the buggers just kill themselves with price cutting until they drop dead - I am sure everyone remembers Ansett's collapse. I'm not saying for a second that is Virgin Blue, but certainly the strain is beginning to show it's toll on the VBA chart...

Cheers
 
hey reece, sorry but I dont understand..
You seem to think in general it can only get tougher for them, and is already going down - so how can it be a good short position?
 
Hi there,
I have been watching VBA for the last few weeks, and have actually been surprised as to how well the price has held up, despite the Jetstar/Tiger price wars, price of fuel etc. TI would not have thought the news of AUS-US flights being a possibility in the future would not have had an immediate effect on the share price, considering (as quoted by Virgin) it would take a period of time to get the service running profitably.
Would it be fair to say that the share price is looking to break it's downward trend, or is it still on its continued downtrend, and the recent price pickup is just a result of recent good news regarding the prospects of AUS-US air services?

Regards,
Kruegs
 

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I was hoping the news would have had a greater effect actually - but Originally I thought the final plan was going to be running sooner..
 
UPKA said:
A lot of broking firms are putting them on SELL, so i guess thats wats leading it to the down trend.
Click to expand...

Curious - how do you see what broking firms are setting their recommendations at? Do you have to be signed up to a research co?
 
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