Select Page

Is Alaska Airlines paying too much for Virgin America?

Is Alaska Airlines paying too much for Virgin America?

I hope this little view from downunder provides an interesting perspective on the announced purchase of Virgin America by Alaskan Airlines.

On the same day that Moody’s announces a potential downgrading of  Virgin Australia credit rating, we presume because of its recent capital raising, and the announced potential sale of up to 26% of its stock by Air New Zealand – this interesting factoid appeared in an article in the Sydney Morning Herald:

Virgin Australia has a market value of $1.3 billion, less than half the Virgin America sales price, despite being a much larger airline than the US carrier in terms of its annual revenue and fleet size.

In Australian dollar terms, Virgin America reported $2 billion of revenue last year compared with Virgin Australia at $4.7 billion.

The first sentence figures are in US$ from what I can tell.

Let me make that a little plainer:

Turnover – Virgin AUS makes twice as much as Virgin USA

  • Virgin AUS makes AU$4.7 billion
  • Virgin USA makes AU$2 billion

Market value – Virgin AUS is vlaued at about half or Virgin USA

  • Virgin AUS valued at AU$1.71 billion
  • Virgin USA valued at AU$3.42 billion

So that means Virgin Australia at more than twice the income of its USA cousin, but is worth roughly half as much?

WTF?

And I thought maths was never my strong point. Alaska, you sure you got this right?

Leave a reply

Your email address will not be published. Required fields are marked *

Subscribe

Categories

Previously . . .

Subscribe to the Newsletter

Join our mailing list to receive regular updates about 2PAXfly.

Reviews, deals, offers, and most of all opinion will be in your inbox.

We won't spam you, and we won't share your details with others.

Newsletter Regularity

You have Successfully Subscribed!