Virgin make 68.4 million profit.

Look's like all the cut-backs have paid off:

http://news.bbc.co.uk/1/hi/business/8067640.stm

[Scrooge]

Just my 2 cents.

What we are seeing is a carry over from last year, airlines with money in the bank got scared and started hedging fuel when oil was $140+ a barrel, VS didn't have the money to hedge a large % at that rate,the lower fuel costs are helping out big time and of course they now have the $$$ to hedge at much lower rate.

There are I think some other reasons for this large jump in profits, I don't really want to go into them here because I can't back them up with any proof, but let's say this will go a long way to help with the public's perception of VS and them being in business in the future.

IMHO the cutbacks we are seeing now may well come back to bite VS in the butt, you can only cut so much before people start walking away.

A big well done to VS for staying afloat and doing better than the last year.

Now, it's time to start putting something back instead of the continual chop, chop, chopping. Agree with Scrooge, advertising a first class service when cutting crew, meal items, anything else that moves does not party!

Great news, but totally agree with the above comments, the only way to grow in this enviroment is to keep your loyal customers happy who will then spread the word.

Cutting back anything that moves is not keeping your loyal customers happy. I can just hear then on the Dibb now - 'making all this money but flying on dirty worn planes' (and yes I do agree about the 'new' p/e)

I think it really is time for the management to get the plastic out and start re-investing in VA.

David

Good news for VS.

Also agree that VS need to look at the cutbacks and the, potential, damage these could cause down the line. I know it's not a proper sample but, my parents just flew back from Barbados and my father was less than happy with the removal of the drink run before the meal. So much so that he's now abandoned VS after 4 years and switched back to BA for next year.

This is profit for their year ending Feb 2009, so the recent cut backs are not included and have no implications. So clearly they have benefitted from being unable to hedge at $140 a barrel and the subsequent fall in oil prices.

other comments to note,

Sir Richard Branson, president of Virgin Atlantic, said: The last financial year has proven to be the most volatile yet in our 25-year history. To increase profits against a backdrop of such a severe recession is an excellent achievement by all of our staff at Virgin Atlantic.

Steve Ridgway, the airlines chief executive, said: We are winning market share from our competitors during the toughest trading environment ever. With some of the lowest fares ever, consumers have never had it so good for so long. Our load factors remain resilient as travellers take advantage of these bargain fares, proving the value of vigorous competition.

Virgin Atlantic employees are to share 10% of the groups profits.

Just out on Reuters,
Virgin Atlantic sees no signs of recovery in the airline industry. Says unlikely to make a profit in the year to Feb 2010..... hence the cutbacks in preparation, wouldn't be surprised if more to come....

[Neil]

I 100% agree with the comment above, although it does worry if the old bean counters will think the same. The worry is, they have made all these cut backs, yet still the number of premium pax have increased, so what incentive is there for them to spend more?

Just got the update on Facebook, which is really interesting, as you can respond with comments (Where is the Evil Grin Smily when you need it)

As for the Premium passengers, I strongly believe they are paying a lot less now than they used to.

I am now paying for PE, what I used to pay for Economy a few years back. I am able to get UC flights for much less than I paid in PE in 2007. I therefore believe this is a factor in the cost cutting.

I also think with 4,500 Cabin Crew and 30+ planes, 68m profit is not much at all.

quote:Originally posted by ukcobra
I also think with 4,500 Cabin Crew and 30+ planes, 68m profit is not much at all.


Not necessarily wanting to open up an old discussion, but as a private company, large profits are not that desirable anyway. And, we don't know whether the shareholders (i.e. SRB and SIA) have taken their cut in fees before profit rather than as dividends after. Since VA does not publish accounts, we just don't know lots of detail like how the cost base is changing, average yield per seat etc. to compare with other airlines.

Still, when BA, Air France and a host of US airlines made a loss in the last year, it's a great result for VS.

quote:Originally posted by slinky09
quote:Originally posted by ukcobra
I also think with 4,500 Cabin Crew and 30+ planes, 68m profit is not much at all.


Not necessarily wanting to open up an old discussion, but as a private company, large profits are not that desirable anyway. And, we don't know whether the shareholders (i.e. SRB and SIA) have taken their cut in fees before profit rather than as dividends after. Since VA does not publish accounts, we just don't know lots of detail like how the cost base is changing, average yield per seat etc. to compare with other airlines.

Still, when BA, Air France and a host of US airlines made a loss in the last year, it's a great result for VS.


If you take a look at the Registrar of Companies website you can search for company filings. For a small fee the Virgin Atlantic Airways Limited financial statements are publicly available (however only the year to Feb 08 is filed at the moment).

Yup, the 2009 report is not available to order yet. The cost is very low. I'd be very interested to see what their cost structure is, and who may be taking a chunk of whats left after fuel, salaries and leasing costs.

After watching Pam Ann, she had a fact about AA:

quote:AMERICAN AIRLINES saved $40,000 in 1987 by eliminating one olive from each salad served in first class.

Small changes can save a lot of money I guess, they just need to be in the right places so people don't really notice them. I don't like olives, so if VS is listening, feel free to get rid of them all [:o)]

quote:Originally posted by ukcobra
Yup, the 2009 report is not available to order yet. The cost is very low. I'd be very interested to see what their cost structure is, and who may be taking a chunk of whats left after fuel, salaries and leasing costs.


It probably wouldn't be worth waisting your pound, the info available on abreviated accounts is next to nothing unfortunatley, but you might get a small idea of whats going on.

David

[Scrooge]

quote:Originally posted by slinky09
quote:Originally posted by ukcobra
I also think with 4,500 Cabin Crew and 30+ planes, 68m profit is not much at all.


Not necessarily wanting to open up an old discussion, but as a private company, large profits are not that desirable anyway. And, we don't know whether the shareholders (i.e. SRB and SIA) have taken their cut in fees before profit rather than as dividends after. Since VA does not publish accounts, we just don't know lots of detail like how the cost base is changing, average yield per seat etc. to compare with other airlines.

Still, when BA, Air France and a host of US airlines made a loss in the last year, it's a great result for VS.


That's what I was hinting at.

quote:Originally posted by flyerdavid

If you take a look at the Registrar of Companies website you can search for company filings. For a small fee the Virgin Atlantic Airways Limited financial statements are publicly available (however only the year to Feb 08 is filed at the moment).


Oh, I did not know that, guess we have to wait until Feb 09 is filled and we can compare the two.

quote:Originally posted by locutus
After watching Pam Ann, she had a fact about AA:

quote:AMERICAN AIRLINES saved $40,000 in 1987 by eliminating one olive from each salad served in first class.

Small changes can save a lot of money I guess, they just need to be in the right places so people don't really notice them. I don't like olives, so if VS is listening, feel free to get rid of them all [:o)]


Agreed, but comparing AA to VS isn't really a good comparison, AA being so much larger, also comparing an olive to the cuts we have seen in the last couple of years really isn't so good either, but yes the economizes of scale really do come into effect with airlines.

quote:Originally posted by David
quote:Originally posted by ukcobra
Yup, the 2009 report is not available to order yet. The cost is very low. I'd be very interested to see what their cost structure is, and who may be taking a chunk of whats left after fuel, salaries and leasing costs.


It probably wouldn't be worth waisting your pound, the info available on abreviated accounts is next to nothing unfortunatley, but you might get a small idea of whats going on.

David


Beat me to it David [y]

quote:Originally posted by slinky09
quote:Originally posted by David
quote:Originally posted by ukcobra
Yup, the 2009 report is not available to order yet. The cost is very low. I'd be very interested to see what their cost structure is, and who may be taking a chunk of whats left after fuel, salaries and leasing costs.


It probably wouldn't be worth waisting your pound, the info available on abreviated accounts is next to nothing unfortunatley, but you might get a small idea of whats going on.

David


Beat me to it David [y]


VAA is a large company so if you download the 2008 financial statements you will see quite a lot of information in there. They are not eligible to file abbreviated accounts. Yes, they won't be as transparent as a big BA glossy set of accounts but there are some good quotes and nuggets of info in there.

[RichardMannion]

Lets see how the premium traffic loads pan out for the rest of the year. It's one thing to attract a customer (normally via a low price) but its a whole different ball game to retain that customer for repeat business; and this is where the cutbacks are going to come back to bite.

Some interesting comments on FT.com about Virgin's results for last year and this year.

Virgin's headline profit for 2008 was before a 32.5m provision for price-fixing:

http://www.ft.com/cms/s/0/c1d79142-49c8 ... .htmlquote:
The previous years figures to February 2008 were boosted by accounting changes and the exceptional release of net accumulated losses for its affiliate Virgin Nigeria.

The same figures also saw Virgin Atlantic make a 32.5m ($57m) provision in its accounts to cover costs arising from its role, with British Airways, in fixing fuel surcharges levied on fares for long-haul flights to and from the UK.
Also, Singapore Airlines seems to account for Virgin's fuel hedges differently:

http://ftalphaville.ft.com/blog/2009/05 ... -atlantic/
quote:Singapore Airlines CFO Mr Chan: Yes, in the fourth quarter the share of losses of the associated companies is about a hundred over million dollars. Thats largely coming out of our investment in Virgin Atlantic. As you know Virgin Atlantic is a company that is incorporated in the UK. So as a result the financial statements are actually prepared under UK GAAP because they are a private company. So they actually do not apply international FRSs. So we had to make some adjustments in relation to their hedges and because they do use proxy hedges there are some adjustments for ineffectiveness of hedge. So thats one of the main reasons for the weaker performance. But if you look at the full year you would notice that the share of associates is actually quite flat. So its really share of profits in the early part of the year.

Singapore Airlines CEO Mr Chew: I should emphasise that point that if you, what Hon Chew said about Virgin Atlantic, in the first half the share of profits from associates, a big part of it was attributable to Virgin Atlantic as well. So it was, to blame Virgin Atlantic for the second halfs dip in associated companies profits would not give you the complete picture. In fact, if we take the two halves then Virgin Atlantic contributed $0.4 million.

There is an excellent and I dare say much more accurate view of the results here in the Times Online. The FT also has a much more to the bone, less spinned view VS results.

The Times surmises that results are not really much more than last year and largely due to cost cutting. Does that resonate with anyone?

Below is a broker note on Virgin. I think Virgin's attempt at spinning has pretty much all unravelled now...

quote:
Virgin Atlantic underlying result very similar to BA.....


Note by mod - uncredited cut and paste edited.

Leo1977 - can you either post a link to the broker note, or at least credit where you have taken the material from please, as the broker no doubt owns copyright on the note.

Nick

whether its 'creative acounting' or a great publicty coupe at ba's expense it obviously has paid off in advertising for the airline. Lets just hope that Virgin use whatever money they have and stop the 'cuts' the wrong areas that many are saying may cost the airline deeply in the future!

Alex