Virgin Blue 'could fold over fuel costs'

[Montague S]

no Pieter, there is a choice and that choice is not to buy the product that is grossly overpriced, personally, I know it will go down because the bubble always bursts...but what I'd really love is for oil to have a higher price and that flow through to the bowser so more people reconsider their lifestyle.

$2.50 p/l is fine with me.

[D Chan]

Originally Posted by Montague S

what...you mean like 24hr plus delays with full service carriers like QF? when there is a 5* Australian carrier offering quality service I'll be sure to try it...but for now we settle for two 3* carriers.

well all airlines have delays and its not only Qantas that has them - other world-leading airlines also have them from time to time. It is how airlines deal with these situation that is important and what sets them apart e.g. pax rebooked (depends on time of day & flight availability), putting pax to hotel etc.
I've seen plenty of 24 hour delays with UA ex-SYD. I don't see how you can mix the two issues up - 1. with delays, 2. with quality service.

Originally Posted by Montague S

anyone that thinks that Australia should be dominated by a single carrier nation needs their head examined.

Can't agree more. Competition is good for the general public and the overall economy.


I am glad I did not buy Virgin Blue shares. I'd be depressed if I bought them.
I wonder how the Embraers and the V Australia expansion are going to impact DJ - certainly sidetracks them a lot. The V Australia expansion will not be cheap. With regards to the Embraer it will complicate things - for example Jetblue had an all-A320 fleet and then got the E-jets.

[Pieter S]

Originally Posted by Montague S

no Pieter, there is a choice and that choice is not to buy the product that is grossly overpriced, personally, I know it will go down because the bubble always bursts...but what I'd really love is for oil to have a higher price and that flow through to the bowser so more people reconsider their lifestyle.

$2.50 p/l is fine with me.

^^^ I agree totally in respect to the need for the wealthy quarter of the world to reconsider their lifestyle - this would work wonders in many different areas.

[Adam P.]

Most interesting thing to watch for mine will be the E-Jets. Virgin have a lot to learn about regional ops (hellooooo, fog season!!) and it is much harder to turn a profit with jets over the shorter stage lengths you get in the regional environment than it is with turboprops. When the going gets tough company-wide, will the Jungle Jets be the first to go?

[Michael Morrison]

Originally Posted by Montague S

$2.50 p/l is fine with me.

LoL... thats what I was paying in London back in 2006

[Andrew M]

Of course Virgin will get through this, the "article" in the paper was pretty poor in my opinion.

Of course ANY company could fold if costs stay high and they dont' raise prices to follow.

Heck Qantas would fold too IF oil prices stay high and they didnt' keep increasing fares to cover it.

The FACTS from the article

If jet fuel were to stay at current levels for several years and Virgin Blue could not significantly increase fares, it would not survive,

Two 5% rises would allow the airline to survive.




As it stands now, oil is back down to around $120 a barrel from $135 a week or so ago.

It SHOULD go back down below $100 soon.

As for the QF vs DJ debate, that has been done and dusted on here so many times, so lets stick to the newspaper "article"

[Mick F]

http://www.wtrg.com/oil_graphs/oilprice1947.gif

Admittedly, that last spike of the graph is a bit more than that spike in the middle, but the spikes are caused by the same events.

That war in Iraq has gotta end one day, just like that spike in oil prices has to end one day too, .

Mick

[D Chan]

Originally Posted by Adam P.

Most interesting thing to watch for mine will be the E-Jets. Virgin have a lot to learn about regional ops (hellooooo, fog season!!) and it is much harder to turn a profit with jets over the shorter stage lengths you get in the regional environment than it is with turboprops. When the going gets tough company-wide, will the Jungle Jets be the first to go?

adding to what you said Adam, regionals in the US are going to cut back on the regional jet fleet in the 50 seater category. Think prop would be more economic than regional jets (shortage stage length) (e.g. Kendell and their forray into CRJ200s or were they 100s?), at least in the 50 seats or less category anway.

having 2 expansions at the same time really complicates things for them. The international expansion to the US would probably be a VERY costly exercise - new a/c (even if it is leased), new staff, new departments, new products and so on - all of these are $$$$ - they'll need to do really well or else they would be in trouble.

With regard to oil, I still reckon it is a bubble. What goes up must fall down again. Just like the 70s oil shock. Oil prices went down after that.
Probably will in say 5 yrs time... but probably closer to the $80-100 US barrel range. People are blaming China but I did read somewhere that their consumption has actually decreased last few years - they might be stockpiling oil though.

I don't think the flying public has much to worry about. If one airline leaves the scene another will fill the void. Just like how Virgin Blue filled Ansett's departure. All we should worry about is the company staff and their jobs.

[Rhys Xanthis]

I cant help but think that Virgin Blue's market doesnt really exist.

They are trying to get more business customers and have been for quite a while.

Full Service? Qantas
Budget? Jetsar, Tiger.

Now, Virgin is no tiger or jetstar. They appeal to a higher market, and also charge (although slightly) larger prices.

I can see them being squeezed out of the market. But, i think you guys may be underestimating the power of VAustralia. While it will take time and money, i think that VAustralia will save the Virgin Blue group if it comes down to it.

my 2c

[Michael Morrison]

they still have around $700-800 million cash in the bank - even if oil prices stay this high and they make a feared $200M loss in 08/09 they still have a couple of years of liuquidity.

These articles are a bit too much doom and gloom spin

Response from Godfrey

http://www.news.com.au/business/stor...-14334,00.html