Virgin Blue's money plane takes off

[Gerald A]

At least part of the whispering campaign against Virgin Blue at the Euromoney Seminar’s Australasia Airfinance Conference in Sydney has fallen over.
Contrary to the rumors, finance for the first of its seven Boeing 777-300ERs for its V Australia long haul carrier has come through in an operating lease with the world’s major jet lessor ILFC, but not until after it had been built, painted and parked in Seattle with some of the seats installed.

And there are finance options in place for the following two nearly-ready 777s, which will become a triple 7 unit trying to break the grip Qantas has on the US routes from the middle of December.

http://www.businessspectator.com.au/...T?OpenDocument

Scott

Maybe thats why the plastic is or was, around the jet engines on VH-VGA, all the seats not installed, plus a delivery date some time in November.

[Andrew M]

From the linked article

"Virgin only has a few years of opportunity to break into the trans-Pacific market with the 777s before the expansion of the Qantas A380 fleet leaves it with uncompetitive per-seat costs compared to the larger aircraft. Air treaty reforms will then throw all routes open to all comers. "

This is by no means factual is it ?

[Tony G]

Originally Posted by Gerald A

http://www.businessspectator.com.au/...T?OpenDocument

Scott

Maybe thats why the plastic is or was, around the jet engines on VH-VGA, all the seats not installed, plus a delivery date some time in November.

According to JP airline fleets only the first 777 is leased VGA (thats how i read it anyway)

[Scott Lindsell]

Originally Posted by Gerald A

http://www.businessspectator.com.au/...T?OpenDocument

Scott

Maybe thats why the plastic is or was, around the jet engines on VH-VGA, all the seats not installed, plus a delivery date some time in November.

That's an interesting snipet Gerry. Thanks for that. I knew they were having installation issues but it would seem some other financial ones too.
Thanks for posting!

[Andrew M]

I would have thought finance would have been sorted out long before the plane was basically finished

One would ASSUME that DJ/VA scraped this finance through at the last minute!

NB: I have no facts to back this ASSUMPTION ONLY up, it's just a punters viewpoint

[Andrew McLaughlin]

Originally Posted by Andrew M

I would have thought finance would have been sorted out long before the plane was basically finished

One would ASSUME that DJ/VA scraped this finance through at the last minute!

NB: I have no facts to back this ASSUMPTION ONLY up, it's just a punters viewpoint

Actually, the finance is usually settled very late in the process - better to start paying interest 2 months before flying than 6+ months out! It's like when you buy a house, you sign the mortgage when you're ready to withdraw the money to settle on the house, not when you exchange contracts on it.

Virgin will probably have made progress payments on the aircraft it will own when it signed an MoU to hold a production slot, another when the contract was signed, and another will be paid upon delivery.

For leases, an airline will usually pay deposit equal to a couple of months lease payments when the aircraft is ordered, a progress payment close to delivery, and then the first term payment (usually a month or a quarter) on delivery. Blue chip airlines (QF, BA, CX etc) may get more relaxed terms, while start ups may have tougher terms.

Cheers

[Radi K]

As I understand it;

VGA is 'wrapped up' because of ongoing B777 delays associated with a shortage of galley parts and now a Boeing staff strike. The seats wont be getting installed in Seattle at any rate anyway!

VGA is the only leased aircraft and only because it was the quickest 777 slot it could get.

As for the rest of 'financial speculation' .. I wouldn't read too much into it to be honest.

[Andrew McLaughlin]

Originally Posted by Radi K

As I understand it;

VGA is 'wrapped up' because of ongoing B777 delays associated with a shortage of galley parts...

That's correct.

...and now a Boeing staff strike. The seats wont be getting installed in Seattle at any rate anyway!

That's incorrect. The strike is by the machinists who fabricate and assemble the aircraft's structural components on the assembly lines, not the interior installers. The interiors ARE installed in Seattle unless they're a custom interior, e.g. for BBJs etc.

[D Chan]

Originally Posted by Andrew M

From the linked article

"Virgin only has a few years of opportunity to break into the trans-Pacific market with the 777s before the expansion of the Qantas A380 fleet leaves it with uncompetitive per-seat costs compared to the larger aircraft. Air treaty reforms will then throw all routes open to all comers. "

This is by no means factual is it ?

It's not factual because no one could predict what could happen in the future - and these things do tend to get a bit political, but nevertheless it is a possibility

[Shameel Kumar]

So we've heard a delivery date of mid-November for VA's first bird.... will 1 month be enough of a timeframe for DJ/VA to get things all ready for VA's inaugural flight on Dec. 15th?

I'm not being skeptical, just wondering if 1 month is enough for the airline to get familiar enough with the new aircraft type and new longhaul route?