Originally Posted by B757200ER

VX is a good company with a good product, but has competition on every single route it flies. What they need to do is stop growing, and create their niche with 50 jets, not 100+. Otherwise, the bleeding red ink will continue.

Originally Posted by ShyGuy

What airline hasn't deferred planes in the last few years? Pretty much all of them have.

Originally Posted by ShyGuy

And that's exactly what they're doing. The news sucks for those who came here expecting the quick movement and/or quick upgrade. I just wanted to get the heck out of my last airline, so I really don't mind the growth deferrals. What airline hasn't deferred planes in the last few years? Pretty much all of them have.

Originally Posted by Two-percent

Dear Teammates,

Later this morning, we will release our third quarter financial results along with an announcement of slowed growth plans and, specifically, an agreement with Airbus to restructure a portion of our current aircraft order. I wanted to share the news with you first before it hits the airwaves.

For the third quarter, we will report an operating profit of a $15.8 million and a 4% operating margin. Despite the continued pressure of fuel costs and 73% capacity growth over the past two years, we reported an operating profit, improved unit costs, and an increase in average fares. As we wind down from a period of rapid growth and as our new markets mature, we continue to see improved top-line results, including forecasting an operating profit for the fourth quarter of 2012, our company’s first fourth quarter profit. Today we will also announce a restructured aircraft order that will slow some of our future growth. We will reduce our current aircraft order from 30 A320 aircraft to ten aircraft, now slated to arrive in 2015-16. We will also defer our 30 Airbus A320neo aircraft from their current 2016 initial delivery date until 2020.

So what does this mean for the Company?

First, with current industry revenue environment and oil trends, this move to defer growth will immediately improve our financial results and provide a stronger foundation for the Company. Our fuel costs from the time we signed the original Airbus order to the summer of 2012 increased by $200 million above our original projections. For the past several years, we needed to grow to achieve a network size of some scale. However given oil costs, industry trends and the fact that we now have a network of sufficient scale, serving most of the top markets from both SFO and LAX, slower growth is a smart business decision that will improve our financial results and help keep your jobs secure. The shift from 30% year-over-year annual ASM growth to a more conservative mid-single digit ASM growth rate annually will give us the breathing room we need to fully mature all our markets and move to Full Year operational profit in 2013.
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Second, this move to slow growth makes our foundation more stable. There will be no layoffs or furloughs and slower growth ensures our survival over the long-haul. It will, however, represent a change in some of the ways we do business. It will shift our focus from the breakneck pace of expansion we’ve experienced for the past two plus years to the task of how we build a better airline – for our guests and each other. Slowed growth will also allow us to offer some work/life options we couldn’t offer before given the previous pace of growth and will allow us to redirect resources into innovation and improvement of our current product.

Although, you may hear speculation to the contrary – this ability to slow growth is not a retreat or a sign of things to come. We’re at the size now where we can react to the market and adjust long-term growth plans if needed. In addition to improving our profitability, this allows decision allows us to improve our balance sheet, reducing debt by hundreds of millions of dollars. Our investors, Board and guests have confidence in our business model – and our margins within our mature markets clearly show that once people try flying on us – they come back, particularly, higher-yield business travelers. This is a credit to the business model and to the hard work of all of you.

I look forward to discussing the news in more detail with all of you at today’s All Hands.

Thanks

David

Originally Posted by Bolo

All you have to do is look at AA pilot group and their rock star status!

Originally Posted by Columbia

Problem with VX is that they haven't yet achieved economies of scale. Aircraft will get older and require more MX as will the labor group. They absolutely need to grow to survive. Alaska, AA, UAL, and DAL will now go after them and hard to rid the west coast market of the unneeded capacity that VX has brought created. With their huge debt load, no one will find anything attractive in buying them.

Originally Posted by gloopy

Whatever happens though, can they please for the love of Katy Perry please please stop this "guest" idiocy? Every "new" company has to reinvent the lexicon, I get it, young hip and fresh and all that junk but come on.