macq research

This notes are some parts of Macquarie Private Wealth


What a turnaround!
 Just three weeks after guiding the market to the lower end of its previously stated FY10 $80-
$120m PBT range, VBA has revised its FY10 guidance to $20-$40m, a substantial downgrade
implying 2H10 has gone from an expected break-even to a $40-$60m loss.
 How is this possible? We struggle to comprehend just how much conditions have deteriorated in
the past three weeks since prior guidance an implied $40-$60m swing on the final six weeks
expected revenues of ~$300m seems excessive. We suspect previous revised guidance could
only have been overly optimistic in factoring in a strong rebound at the back of June.
 Still tough for V Australia. Certainly V Australia continues to lose money, with economy class
return fares on the US route recently falling back below the ~$1,000 level. Although inbound
demand from the US is improving, VBAs disproportionately low inbound market share relative to
its competitors means it would not be seeing this benefit.