VBA - Virgin Blue Holdings

[Garpal Gumnut]

As long as VBA has breathless blonde hostesses they will stay on the ASX.

Their business model of having attractive cabin staff is a winner.

Have you ever travelled with an American airline. Some of the hosties should be in wheelchairs.

gg

 

[Steven12]

does anyone know if you apply for the SPP through BPAY, if you get your refund back through bank deposit or bank cheque?

 

[stocksontheblock]

does anyone know if you apply for the SPP through BPAY, if you get your refund back through bank deposit or bank cheque?

Posted earlier (some text to make 100 char's. Mary had a little lamb, its ... ohhh this is so pointless)

You should see a cheque in about 2 weeks, maybe a little quicker, yet wouldnt count on it, they very very really DP back to your account.

 

[plankton]

From a letter I recieved today ...

"If a scale back was applied to your subscription for additional shares, a refund cheque for the scaled back portion of your application will be posted to your registered address on or about the 14th September 2009."

Seeing I didn't get the undated letter till the 15th I'm not holding my breath...

 

[TimPot]

Thanks for that. I just found my refund cheque in a pile of mail.

Was wondering why I hadn't seen the money credited into my bank account.

And I think I can make money in the stockmarket!???!

Hmmmn

 

[wbosher]

Looks like VBA has broken out of an ascending triangle, closed at 59 cents today. Hopefully it's all up and up from here.

 

[skip9]

0.57c

Been lots of reports and analysts reporting about VBA. Obviously with the recovering economy more people are willing to spend money on air fares and this will only improve.

Can it trek its way back up above $2.00 and maybe push on long term?

 

[cornnfedd]

Lets hope they can improve their service levels..

I am a weekly (yes weekly) flyer of Virgin Blue, great flight last night except:

1. Drop down tray was broken.
2. My seat arms were broken, bent and dented in
3. 'Live to Air' didnt work - they announced whole plane will get a refund
4. My light kept flashing on and off the whole trip

It just made me think - i hope they arent maintaining the engines the same way they are maintaining the seats etc...

Back onto topic though- I have been thinking about getting some VB for awhile, what are other people thoughts? im not big on airlines in general though.

 

[Schmickle]

Personally i think VBA looks well placed to head back into the $2's in the medium term (just IMHO). I bought back in this week @ $0.630 so they bloody well better

The new CEO appointment is a step in the right direction. I'm confident Borghetti will take the business from what is essentially a start-up to a more robust and mature market position especially within the business travel sector. I'd say he has a bee in his bonnet too since being passed over for the top job @ Qantas which will make this all the more interesting to watch. V-Australia looks set to finish H2 much more strongly too!

This is just my so as always DYOR

 

[malachii]

I find Borghetti an interesting choice for CEO. I was with Q when he was in management and he has a much different style than the ethos that surrounds Virgin. I'm not convinced that he wont try and change Virgin into a "mini" Q. I think this would be a big mistake because while I actually dont like Virgin - I think their point of difference is their only strong point.

I have worked in the aviation industry for over 20 years and can personally attest to how difficult an industry it is - especially when you are competing with a bohemeth like Q. Yes - the size and "stuffyness" of Q does work to their disadvantage but they have economy of scale. They are as close to unfailable as you can get as the government of the day will always rescue and protect them. You only have to see what both Labour and Liberal did for Q when Ansett fell over, the protection of the US route and many other things that we could discuss. Minister Anderson who was the Minister for Aviation during the Howard era was commonly known as the Minister for Qantas.

I'm not saying this to make it sound like VBA is going down the toilet - I'm just very wary of the industry they work in, the competition they have and now I'm a little "suspicious" of their new CEO, at least until he proves that he can work within the Virgin culture and not try to Qantasise it.

malachii

PS I hold no shares in VBA but I do hold some in QAN - because they paid me my bonuses in shares and wont let me sell them for another 4 years.

 

[Schmickle]

I find Borghetti an interesting choice for CEO. I was with Q when he was in management and he has a much different style than the ethos that surrounds Virgin. I'm not convinced that he wont try and change Virgin into a "mini" Q. I think this would be a big mistake because while I actually dont like Virgin - I think their point of difference is their only strong point.

I have worked in the aviation industry for over 20 years and can personally attest to how difficult an industry it is - especially when you are competing with a bohemeth like Q. Yes - the size and "stuffyness" of Q does work to their disadvantage but they have economy of scale. They are as close to unfailable as you can get as the government of the day will always rescue and protect them. You only have to see what both Labour and Liberal did for Q when Ansett fell over, the protection of the US route and many other things that we could discuss. Minister Anderson who was the Minister for Aviation during the Howard era was commonly known as the Minister for Qantas.

I'm not saying this to make it sound like VBA is going down the toilet - I'm just very wary of the industry they work in, the competition they have and now I'm a little "suspicious" of their new CEO, at least until he proves that he can work within the Virgin culture and not try to Qantasise it.

malachii

PS I hold no shares in VBA but I do hold some in QAN - because they paid me my bonuses in shares and wont let me sell them for another 4 years.

Yep you raise some great points. Borghetti is definately a somewhat left field choice for Virgin but that's actually why i'm heartened by his appointment. It isn't what you would call a predictable placement but is certainly very strategic. The risk to Virgin as you point out is if Borghetti tries to turn it into a mini Q however he'd be quickly cut off at the pass by the board before even getting close as their brand image is protected extremely tightly. His brief will be to tackle Qantas where it hurts IMHO.

Re the government rescuing and protecting Q you are quite right, the government would not let Qantas sink. However I'm not sure how they will be able to fully protect Q from relinquishing share of wallet in the business travel market. If it ever came to the point of Q being in dire straights the best they could hope for is that the government props them up whilst they try to counter-attack. Virgin took on British Airways with success and their (Virgin's) brand image is even more at home in AUS than the UK if you ask me.

At the end of the day the punters will vote with their feet but my personal view is that Qantas has lost a lot, if not all, of that old school superior carrier feel it used to have. I fly very regularly and select Virgin domestically wherever possible as i find the customer facing staff 10 times more friendly, attentive and genuine. The planes are the planes but for me the people make the difference. (No i don't work for Virgin )

 

[tayser]

I actually flew on V Australia MEL-LAX-MEL in the past three weeks. Loads werent that great (60% each way) however in saying that it is the slowest month to travel to the USA and they are only flying the route 2x weekly.

As soon as the JV with Delta gets approved by Obamarama they'll hopefully fill up the planes more and start flying more frequencies to attract more of the Melbourne business.

Delta are probably the best US domestic partner Virgin could have really - I just did a lot of flights on American Airlines and quite frankly they are an embarrassment to the Oneworld alliance - very unfortunate for Qantas.

 

[Smurf1976]

im not big on airlines in general though.

I remember hearing someone note that the aviation industry as a whole has not been profitable from day one. That is, the losses of all airlines globally exceed the profits of those few who actually have made a profit. So it does seem a rather tough business to be in.

Let's face it, if Virgin or Qantas went broke then I think most people could imagine that as being at least possible, even if Qantas would likely end up with a taxpayer bail out. But I doubt that many would consider it likely that Woolworths, Wesfarmers (Coles), Caltex, David Jones, AGL, BHP or other large "household name" companies would end up actually broke anytime soon. Worst case they might make a loss during a bad recession or if some unexpected disaster occurs, then they'll turn around fairly quickly. In contrast, airlines in general do seem to run a real risk of complete financial failure.

I don't hold any airline stock at present.

 

[malachii]

Re the government rescuing and protecting Q you are quite right, the government would not let Qantas sink. However I'm not sure how they will be able to fully protect Q from relinquishing share of wallet in the business travel market. If it ever came to the point of Q being in dire straights the best they could hope for is that the government props them up whilst they try to counter-attack. Virgin took on British Airways with success and their (Virgin's) brand image is even more at home in AUS than the UK if you ask me.

At the end of the day the punters will vote with their feet but my personal view is that Qantas has lost a lot, if not all, of that old school superior carrier feel it used to have. I fly very regularly and select Virgin domestically wherever possible as i find the customer facing staff 10 times more friendly, attentive and genuine. The planes are the planes but for me the people make the difference. (No i don't work for Virgin )

I agree that no-one will stop VBA from attacking Q in the business market. The one thing that most people lose focus on is that they cannot compete properly with Q as they dont have the aircraft and infrastructure. On the main trunk routes (MEL SYD BNE PER) Q can and do run aircraft every 15 minutes during peak times. This gives businessmen/women so much flexibility and as the saying goes - time is money. If I can get out of a meeting an hour early and catch an earlier flight or do some extra work and grab a later flight this saves big dollars. Where as if I have to wait for the next VBA flight which is an hour or more later.........

Please note I am not making any comments about On Time Departures although if you look at the official stats - they are pretty neck and neck - (if you work in the industry though you will understand that these numbers are useless except for marketing purposes as they are rigged and abused far beyond the general publics understanding - they bear NO resemblence to the real world - the tricks both sides use to rig these number is astounding!).

Staff moral and customer service is another area all together and one I am reluctant to comment on as I am an ex Q staff member.

I was actually pleased they went left field and chose Borghetti, he knows the Australian and International industry as well as anyone and knows his direct competitor better than most - however I still hold my previously commented reservations until he proves that he does not want to turn it into a "mini Q".

malachii

 

[Smurf1976]

The one thing that most people lose focus on is that they cannot compete properly with Q as they dont have the aircraft and infrastructure. On the main trunk routes (MEL SYD BNE PER) Q can and do run aircraft every 15 minutes during peak times.

Wouldn't that just be a matter of scale and to some extent a "chicken and egg" problem?

If Virgin had more business passengers they they would run more planes more often.

If Virgin ran more planes more often then they would have more business passengers.

 

[Schmickle]

Wouldn't that just be a matter of scale and to some extent a "chicken and egg" problem?

If Virgin had more business passengers they they would run more planes more often.

If Virgin ran more planes more often then they would have more business passengers.

Yep exactly. All they need to do is increase share of wallet, getting more planes is easy done. Virgin will never run more routes than Qantas IMO but i reckon they're poised to compete on the profitable runs.

 

[malachii]

Wouldn't that just be a matter of scale and to some extent a "chicken and egg" problem?

If Virgin had more business passengers they they would run more planes more often.

If Virgin ran more planes more often then they would have more business passengers.

No - I dont think so because it is not just a matter of buying/leasing more aircraft. Virgin dont have the infrastructure at airports (and no more space is available to build in places like SYD and MEL). A lot of airports (PER, ADL and BNE come to mind) are building new infrastructure but it is for "common user" terminals to encourage other (overseas) airlines in. The maintenance facilities VBA have in MEL couldn't cope with a great deal more aircraft without significant investment. As VBAs aircraft age they are going to need major overhauls which they currently dont have facilities/skills for in Australia. It takes a lead time of many years to purchase more aircraft - you dont just go down to the local aircraft showroom and ask for a couple of 737s. Getting finance for a $120 000 000 purchase is not like just slipping down to the bank and filling in a bank loan application. If they buy more aircraft they will need to set up proper training facilities for training flight attentants (currently done mostly by Q - but they only have so much extra space) and pilots. For every 12-18 aircraft you need to buy a new $20 000 000 simulator. Currently these are housed (for VBA) in Melbourne (2 with Ansett Simulators) and Brisbane (1 with Alteon). Where would they place another? And then what happens during the next downturn.....

I'm not trying to be a smart ar$e. They cannot grow and compete with Q - the capital and commitment required would just not be possible. Sure they will take a % here and there but they have just about grown as much as they can in Oz. This is why you are seeing them take on smaller, more efficient aircraft (Embraer) and expanding overseas (US with Delta, NZ with Pac Blue etc).

malachii

 

[michaeldenna]

some things that work to vbas advantage

aircraft - most of these are leased v Q who own most of theres
hq - vba hq in qld is around 400 v Q who have 5000+ staff.

re - qantas being the prefered business travel option due to the number of flights -> absolutely correct. in our team (20 staff) we would have 2 - 5 staff travelling each week. if a flight is delayed / cancelled this costs our business money. only the other day, our meeting ended early so we caught the earlier flight (which was only 30 mins but again that meant i could go into work a little earlier the next morning). all $$$

 

[adam.francki]

So VBA has obviously dropped in share price considerably in the last week or so... Would this have anything to do with the volcanic ash cloud in europe? I thought it wouldn't since its only a domestic airline but would the price still be affected due to virgin atlanic aircraft being grounded in europe. I may be completely, stupidly wrong about this. Thought I might just enquire thats all. Any help would be great. Thanks

 

[risktaker]

So VBA has obviously dropped in share price considerably in the last week or so... Would this have anything to do with the volcanic ash cloud in europe? I thought it wouldn't since its only a domestic airline but would the price still be affected due to virgin atlanic aircraft being grounded in europe. I may be completely, stupidly wrong about this. Thought I might just enquire thats all. Any help would be great. Thanks

Maybe it's due to their High PE, High Debt/equity level compounded by an expected rba rate rise? .....................................................................