Ord minnett had the following report this morning and another...

Ord minnett had the following report this morning and another for qan to hold


Virgin Blue (VBA ? A$0.71), Buy
February stats show that loads remain strong
􀂃 February stats show that Domestic and International loads continue to improve on pcp and as such are likely to be supporting
improvement in yields. We are not given monthly yield data for VBA, however, we suspect that the Domestic yields are likely
to roughly mimic those of Qantas Domestic which grew 3% on pcp for the month of February. The Domestic load factor for
February was 84.1%, an increase of 2.8ppt on pcp. This is higher than the mean load factor over the past 12 months of
81.8%. The increase on pcp reflects a slight increase in demand (passengers up 1.6% on pcp, RPKs up 1.0% on pcp) and a
reduction in capacity (domestic ASKs down 2.4%). We note that capacity was still being increased in the pcp, with domestic
capacity reductions commencing in June 2009.
􀂃 The International load factor for February was 74.5%, up 3.7ppt on pcp. However, it is difficult to compare international stats
with the pcp due to the launch of the longer haul V Australia services (27 February 2009) and subsequent expansion of the V
Australia routes. This growth is reflected in the 127% increase in international capacity compared to the pcp. As shown at the
1H10 result, the load on V Australia services has improved considerably since its launch (trough of ~60% in May/June 2009
to ~88% in December 2009), which we suspect is likely to support a rationalising of yields on the transpacific routes.
􀂃 Overall Group performance was strongly influenced by the roll-out of V Australia. Passengers increased 4.4% on pcp,
capacity increased 25.0% on pcp, and the load factor increased 1.4ppt to 80.4% for the month of February.