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View Full Version : Virgin Blue's Outlook


Lukas M
11th April 2008, 08:46 PM
-Toll to retain Virgin Blue stake for now
-Virgin expects lower profit
-Virgin to introduce fuel levy

http://news.smh.com.au/virgin-blue-expecting-140m-profit/20080411-25js.html

http://news.smh.com.au/toll-to-retain-virgin-blue-stake-for-now/20080411-25jv.html

Michael Morrison
13th April 2008, 09:35 AM
To be honest, I would expect them to have a lower profit for this next half as they will have a huge amount of expense relating to V Australia and the intorudction of more EMB 190's

Hopefully they can recover some of this once both new ops are settled down in 12 months or so

D Chan
13th April 2008, 06:20 PM
To be honest, I would expect them to have a lower profit for this next half as they will have a huge amount of expense relating to V Australia and the intorudction of more EMB 190's

Hopefully they can recover some of this once both new ops are settled down in 12 months or so

The set up cost for V Australia will be enormous and it definitely won't be easy for them. I'm not sure whether Virgin Blue is trying to do too many things at once e.g. E-jets to try to capture more of the regional market / and the international expansion.

Lukas M
13th April 2008, 07:50 PM
Something like 40m for the flight simulator, wasn't it? And Purchasing all those planes, they would need a enormous budget

But hey Virgin makes decent profits, so why not spend it, to try and make more:)(we hope)

Rhys Xanthis
13th April 2008, 09:03 PM
V Australia is going to be a winner.

As long as it is by itself with QF and United for a while to get on its feet, it will be a great investment for Virgin.

Ben O
14th April 2008, 10:51 AM
Virgin Blue shares are currently down to around 93 cents.

Greg F
14th April 2008, 12:01 PM
This is a major concern, share price is falling....
Profit down...
I hope that they pick up..
In my opinion within Australia they are headed down a risky path.. Regional routes and aircraft, extra this and extra that, the Lounge, Blah Blah..

why they have moved away from LCC astounds me, when QF are rapidly expanding JQ, dumping loss making routes to them as its more profitable...

David Sims
14th April 2008, 05:46 PM
I agee with Michael. Give them 12 or 18 months and things should start to turn around. All this major capital investment has certainly hit their earnings but this is to be expected.

Brenden S
14th April 2008, 06:37 PM
They will come back, just look at what they are doing. A lot of people Hate QF and there just isn't any comparable competition.

Andrew M
14th April 2008, 08:46 PM
Share Price finished the day at 0.870

:(:(:(:(

Down 21% in one day! I cleaned out all my DJ shares last week, ended up with about a 5% profit, which considering the share market at the moment is not too bad.

Might buy back in again now though

Kurt A
16th April 2008, 12:05 PM
It seems the fuel levy is also playing a hefty role in the reduction of Virgin's Annual profits.



Qantas and Virgin to raise fares, Tiger holds out


Australian domestic carriers can no longer struggle against record-high jet fuel prices, as Qantas contemplates matching the recent fare raise of Virgin Blue.

The era of budget travel within Australia is grinding to a halt, as cheaper airlines can no longer absorb the 60 percent rise in fuel prices in the past year.

On the heels of Virgin Blue’s announcement that one-way fares would rise up to $12 next month, a Qantas spokesman has confirmed that raising prices is under consideration.

The spokesman noted that Qantas is “watching the fuel situation carefully and considering both fuel surcharges and fare levels.”

The International Air Transport Association has estimated that the 62 percent rise in jet fuel compared to last year will add $US56 billion to fuel prices, the Australian reports.

Qantas has remained quiet on the impact of these rises on their annual takings, but Virgin Blue has forecasted over $120 million in additional fuel costs next year.

The recent announcment of Virgin Blue regarding its annual profits, which are predicted to fall from $216 million last financial year to $100 million, this year, led to the stock price of Virgin Blue dropping 21 percent to a record low of 87c.

The pessimistic outlook for Virgin Blue appears to have affected Qantas, as their stock fell almost 4 percent despite the promise of CEO Geoff Dixon that the forecasted record profits for the year would not be amended.

However, competitive newcomer to the market, Tiger Airways, refuses to follow suit with the major carriers in rising prices in what is, perhaps, a somewhat premature statement.

“Tiger Airways has the lowest cost base of any Australian domestic carrier and is committed to offering the lowest possible air fares,” said CEO Tony Davis.

“As a result, we will not be matching the increased fares being imposed on consumers by Virgin Blue.”

The tourism industry, especially in domestic activity, has already given an impaired performance this year, and the fare rise is expected to place further stresses as available seats may outstrip demand.

Tiger Airways may have their finger on the pulse, as Davis continues, “history has shown that in times of economy uncertainty true low-fare airlines, like Tiger Airways, are more attractive to consumers as they hunt out the lowest possible fares.”