Virgin Blue Holdings Limited SWOT Analysis

consummate(a) grisly Holdings special(a) swot up AnalysisAbout the fraternity everlasting(a) no-good Holdings Limited, an Australia-based compevery, is affect in the airline patience. The companys pieces include capacious and short hauls. The company owns a fleet comprising of 68 Boeing 737-700 800 series a enormous with Embraer E-170 and E-190 aircrafts. consummate(a) Blue Airlines functions approx 2100 courses per week to 24 national cities and centers and 8 outside(a) places including ports in Figi, brand-new Zealand, Tonga, Vanuatu, the Cook Island and Samoa. pure(a) Blue had been established in the year 2000 as wholly owned subsidiary of everlasting(a) Group. In 2002 Virgin, along with Partrick invested in the airline field. In the year 2008, Virgin Blue Holdings Limited came into existence and floated on the exchange for selling the keepings of Virgin Group. Virgin Blue Holdings main operation is in the airline trade in Australia, while it operates in air tran sportation and schedule sector also.SWOT Analysis Of Virgin Blue Holding Limited(S)trengthsMotivated focussing The management of the Virgin Blue Holding Limited is high-pitchedly make and continuously involved in value improvement process. A make team ensures giving its best to earn super pull aheads.Innovation The collective direct strategy of this company is innovation. This helps the company in preparing the niche segment for itself. excessively helps the company in having a upper hand everywhere competitor.Young staff Strength of Virgin Holding Limited lies in their staff which is comprised of young people. This depart increase their work efficiency and productivity, and gum olibanum lead to superior profit making.(W)eaknessesCapital Intensive Business Lines Virgin Blue Holdings business is highly a capital intensive business thus requiring managing of heavy investment and maintenance cost. The point to reach breakeven all overly is thus, longer than early(a)wise. Low return on investment The airline industry is highly volatile and cyclical in nature and usually seduce low return on investment.(O)pportunitiesNiche merchandise Instead of targeting the bulk to fly economy and certain business class crowd, the company targets the bookman and this segment has high growth opportunities.Less competitive market a nonher(prenominal) opportunity for the company is that this market is less competitive market and has high growth scope, and thus it would enable them to get the movers advantage and becoming market leader thereby earning super profit.Richard Branson Richard Branson passion for aircraft also helps in elaborateness of business.(T)hreatsExisting player Existing competitor nooky act as a threat for Virgin Blue and impact their market sh atomic number 18. Also there is a threat from the entry of new player.Air flight safety Another concern for airline industry is safety. This is the most greens sector for terrorist attack and any much(pr enominal) event can terminuss their business and brand to a greater extent.Key audit risks in general the audit risks are of three typesInherent RisksControl RisksDetection RisksThe chase are the key Audit risks-Revenue Recognition (Detection Risk) Identifying significant ratios such as Accounts receivables/Sales or Inventory/Cost of Goods Sold is important are these are predictive of negative events.Account affected favorableness Ratios.Expense Recognition (Detection Risk) Deferred long-term expense and exaggerated depreciation a lot distorts balance sheet. Checking of these ratios such as Selling GA Expenses to Operating Expenses YoY land and also comparing them with industry standards.Account affected Profitability Ratios.Asset-Liability evaluation (Detection Risk) Liquidity, Asset Turnover, Net Income/Equity, Leverage, Good lead, etc may be comparable with peer mathematical group and previous years.Account affected Asset Turnover Ratios and Liquidity Ratios.Directors ho lding position of Officers (Control Risk) As directors have fiduciary responsibilities towards the shareholders, they should not have positions that are subjected to conflict of interest.Account affected Dividend payments and other policies related to shareholders.The CEO and moderate are clear up (Control Risk) The roles of the CEO and Chairman are performed by separate people as the chairman would then be able to award the shareholders interest offend.Account affected Dividend payments and other policies related to shareholders.Stepping down of Virgins long term CEO Brett GodfreyEarlier in 2010 virgin long term CEO Brett Godfrey stepped down and was replaced by John Brochette. Due to change in CEO, the listeners need to properly emphasize or assess the following points transform in corporate governance Stepping down of the existing CEO can lead to corporate governance issues in organization. If the new CEO is not as effective, then it leads to bureaucracy and account manipula tion issues in an organization. The meeter needs to evaluate this area carefully.Accountability of board of director The auditor should make sure that same practices of accountability and displace is maintained in organization. There should not be any misappropriation or vituperate of funds available.Analysis of share holding pose change The auditor needs to analyze if there is any change in the shareholding pattern due to stepping down of the CEO. This will help in evaluating the existing reenforcement structure of the company and help in evaluating welfare of shareholder by maximization shareholders wealth. The auditor should properly investigate where the funds are world divested.Current Financial Information of Virgin Blue Holding LimitedNet profit after income tax for 6 month period, terminate 31/12/2009 was $62.5 million and that reflects $163.9 million more compared to the corresponding 6 month term ended 31/12/2008.The net profit of the period is made up ofIn these 6 months to 31/12/2009, the underlying OPs profit before tax went up by 34% and got profit of $80.1million.Basic EPS for the 6 months period ended 31/12/2009 had a profit of 3.3cents/share.Business segmentsVirgin Group has 2 segments, set forth below that are Groups business segment. The business segment offers different run and products, and managed separately as they need different types of aircraft. For each business segment, the k directledgeable management reports are reviewed on monthly by the board. The summary describes trading operations in each segmentShort haul Operations utilize short haul fleet by Boeing 737 aircraft Embraer 190 and 170 aircraft. This includes Australian, New Zealand, Trans-Tasman and Pacific Island flying.Long haul Operations that use Boeing 777 fleet. This predominantly comprises of Trans-Pacific flying.Partnerships of Virgin Blue Holdings LimitedEtihad signed a partnership with Virgin Blue Holdings LimitedAll Virgin Holding services will now be available also to the Etihad customers, by opening up of 44 destinations in Asia, Australia, Pacific Islands, New Zealand, and Los Angles. The code share apprehension will come to effect right from October. As result of this deal, Virgin Australia is to survive as first Australian carrier operator to operate at the Middle East since 1991.Together with V Australia and Eithad Virgin Blue will be able to fly twenty seven flights in amidst Abu Dhabi Australia which will include the services between Abu Dhabi-Sydney, Melbourne Brisbane.Etihad management said that Australia is a very important market place for us we are dexterous that after this collaboration we will be able to serve our social occasion better. We currently fly about 450,000 people a year to Australasia, we pretend this deal will add about 100,000 to that figure. With this collaboration we will be in a position to serve the USA Europe trips better from Australia, that will give us a distinct advantage over the other competitors, improves the sustainability comfort of travel.The agreement would joing the Blue Group and Etihad frequent peak programs, thus allowing the customers to earn burn miles in all of these airlines that are involved in deal.Partnership of Virgin Blue V Australia with Virgin the States for Frequent FlyVirgin Blue with its long-haul airline, V Australia has partnered with Virgin the States to give benefits to loyalty customers to get some points when they take flight on sister airlines. This simply means that people travelling through any of these 3 flights will earn some credit that will be deducted under frequent travelling program. This partnership has applied from April, 2010.This exchange agreement will enable Virgin Blue or V Australias pep pill customer to earn Velocity points vice-versa through any of the 3 flights. Virgin Blue is presenting this as benefits to its guests a act of Customer relationship management.Virgin Blue team says that their motto is that people from whole USA other parts of the world plan their tours with our developing airline family. Virgin no-good is famous for its customer service, product innovation, great design high level of facilities. Virgin Blue has got Best National Airline for 3rd unbent year at the Australian National Travel Industry Awards.