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What's your take on today's Virgin Australia results and announcements?

13 Discussions

David

Member since 24 Oct 2010

Total posts 986

Virgin Australia has opened the books on the July-December 2016 financial period, and while the airline reported $42.3 million in pre-tax profit, that was almost half of the $81.5 million pre-tax profit in July-December 2015 while associated costs including restructuring charges and 'fleet simplification' sunk this to an overall loss of $A21.5 million.

Virgin also announced it would delay delivery of its first Boeing 737 MAX jet to late 2019 (previously 2018) and slim down the variety of aircraft in its domestic fleet by selling the last six of its Embraer E190 jets.

On the upside, the airline confirmed a mid-year launch for flights to Hong Kong (the Aussie anchor city has not been revealed but we're hearing it will be Melbourne) with "direct flights to mainland China" (Beijing was previously cited by the airline) to follow.

What's your take on those announcements, Virgin Australia's results and its future?


afloskar

Member since 10 Aug 2015

Total posts 158

Hopefully Brisbane will get the Beijing flight; it would be the most sensible for VA considering no one already serves it!

Jorge_fly

Virgin Australia - Velocity Rewards

Member since 08 Feb 2016

Total posts 83

My sources at Virgin told me a different port to HK, being Sydney. Though this news is a few months old..

David

Member since 24 Oct 2010

Total posts 986

Another snippet from this morning: with regard to inflight Internet, Virgin Australia CEO John Borghetti says the airline is “planning a big announcement very shortly."

Jorge_fly

Virgin Australia - Velocity Rewards

Member since 08 Feb 2016

Total posts 83

Another snippet from this morning: with regard to inflight Internet, Virgin Australia CEO John Borghetti says the airline is “planning a big announcement very shortly."

Launching the route to HK means that flights will start mid year or advised to the public mid year for a late 2017 'take off'? 

CBRQF

Qantas - Qantas Frequent Flyer

Member since 28 Jul 2011

Total posts 42

I'm still disappointed they are getting rid of the E190 jets. They are great for short trips around the east coast and are so much more comfortable in economy. Will those last 5 737s just make up for the E190 loss?

DBPZ

Virgin Australia - Velocity Rewards

Member since 26 Feb 2016

Total posts 38

When connecting to HKG or PEK, would VA link its membership scheme with HNA's, or at least provide some benefits to its members in HNA's network?
Last editedby DBPZ at Feb 17, 2017, 02:58 PM.

David

Member since 24 Oct 2010

Total posts 986

When connecting to HKG or PEK, would VA link its membership scheme with HNA's, or at least provide some benefits to its members in HNA's network?
Last edited by DBPZ at Feb 17, 2017, 02.58 PM.

David

Member since 24 Oct 2010

Total posts 986

Another snippet from this morning: with regard to inflight Internet, Virgin Australia CEO John Borghetti says the airline is “planning a big announcement very shortly."

Launching the route to HK means that flights will start mid year or advised to the public mid year for a late 2017 'take off'? 
Start mid-year, we expect tickets on sale in April.

E63AMG

Qantas - Qantas Frequent Flyer

Member since 17 Oct 2014

Total posts 1

Virgin swung to a net loss of $21.5 million in the December half, including the impact of restructuring costs, compared with a net profit of $62.5 million a year earlier.

Underlying profit before tax was $42.3 million, down $39.2 million. Virgin earlier this month posted a 37 per cent fall in second-quarter underlying earnings.


Another very poor result from VA, i'm sure shareholders are shaking their heads even more. Makes me think, you can put lipstick on a pig........but it's still a pig! And that is what VA's balance sheet remains as, they can announce as many fancy ideas as they like, however 4 services a week in a highly competitive  HKG market will not make money or be seen as a credible option with business travellers. VA are stuck between a rock and a hard place and won't be making significant inroads into their poor financial situation anytime soon, me thinks.

GBRGB

Qantas - Qantas Frequent Flyer

Member since 21 Jan 2014

Total posts 219

A stagnant business going nowhere, it is losing market share as a total in the domestic market and lacks depth and volume in its business.  It is very poor in regional Australia so lacks the feed that QF enjoys through its network, in Townsville for example it is now down to 22% pax as a total , many other regional centres are not much better. The anti QF sentiment it enjoyed for a period has gone and now it has been found wanting in the real things passengers want, flights schedule, route options and connections. It really lacks a defined focus and now lacks the capital to address many of its shortcomings. The only way it can succeed is to return its focus on its domestic service where it enjoys some protection from competition through govt legislation and rely on its partners for international options. 

russell

Qantas - Qantas Frequent Flyer

Member since 04 Nov 2011

Total posts 187

My view on VA has always been and still remains the same today....it does not know what it stands for. I honestly think it's never been able to shake its low cost carrier heritage. It's essentially become some kind of hybrid airline, reliant on virtual networks and a half in / half out domestic offering. It's clear that their strategy is simply not working, and change at the top is needed. 

DBPZ

Virgin Australia - Velocity Rewards

Member since 26 Feb 2016

Total posts 38

 4 services a week in a highly competitive  HKG market will not make money or be seen as a credible option with business travellers. 


The significant change after connecting to hkg is that VA will be integrated into hna's network. Hna has been running 8 flight from Australia to destinations in China : (Mel + Syd) x (Xi'an+Changsha) x 2. The hkg route can then connect VA to hna's international and intercontinental routes based at hkg. The integration will make the access to ne Asia market feasible -- Singapore is too far and sq has too few destinations in this region. Actually, this will be the first time when an Australia based airline can go deep into China because China doesn't have a Oneworld member. 

Last editedby DBPZ at Feb 18, 2017, 05:40 AM.

StudiodeKadent

Member since 20 May 2015

Total posts 109

Virgin's results are rather sad; they're a good airline and competition is healthy for the aviation market. 

I honestly don't know how Virgin can 'fix' themselves but I do think an obvious problem they have, and even they recognize having it, is that they have an excessively complicated fleet.

The 737 Max orders won't replace all of their current airframes either. And Virgin demonstrably need some smaller jets too... I recently flew to Melbourne with them on one of the Embraers and there were plenty of unfilled seats.

Hong Kong is a great market, but its also a relatively premium market. 20 Business Class seats and the rest economy (Virgin's A330s) is pretty lacklustre for such a market. Maybe they'll rip out a row of economy to create some Economy Space Plus seating. But seriously they'll need a new widebody jet eventually.

As I see it, Virgin would benefit from some radical shifts in their fleet. The 777s and A330s should probably both get replaced by A350-900s (which will give them more capacity to HKG and Beijing, and allow them to avoid their 'too much plane' issues on the 777 flights to the USA). Also I think they should take a very good, long, hard look at the CSeries since it will be a great way to improve their efficiency and lower their operating costs whilst increasing passenger comfort and trimming excess capacity. The CS100 could replace the Embraers, VARA's Fokker 100s, and possibly even the ATRs. CS300s could operate longer routes and international routes like Auckland and South Pacific islands and possibly even Bali (particularly if they got stocked with widebody-grade products). And if Bombardier ever stretch the CS300 into a CS500, well that will provide a great replacement for 737s.

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