ok i will go first,vba got LUCKY.....vba were about to go bust...

ok i will go first,

vba got LUCKY.....vba were about to go bust but ansett knocked on the administrators door first.

this once in a lifetime opportunity allowed vba to continue operating and set their sights on filling the gap left by ansett too quickly.

instead of being civil with qantas they set about being an agitator which isn't what you need to do when you are in a duopoly situation.

the reason it's a duoploly is because vba has never competed with qantas and jetstar on the same routes. vba has only ever competed with one or the other on their routes and even the recent arrival of tiger hasn't dented this duopoly because of tigers current lack of capacity.

so for the past 7 years vba have had the opportunity to establish a first class domestic operation with low overheads and high returns. this would have allowed them to get very cash rich.

instead, they pursued an aggressive expansion campaign and moved from their low cost base to a higher cost base at a time when the oil price was climbing.

now they find themselves in an environment where they have no free cash, incraesing debt, an increasing capacity, a declining demand, high oil prices and purchase and leasing agreements that wont enable them to reduce their capacity.

if ya cant reduce capacity and ya cant raise prices then ya are stuffed.

lets get this straight, vba cant blame oil prices for their predicament because its akin to a gambler blaming the horses that he backed for his problems because they didn't win.

vba bet the house on an expansion plan in the face of increasing oil prices and a slowing us economy.

so, NO NO NO, management may not have their heads screwed on.

take a look at their balance sheet.

cheers