Auditing and Assurance Services – Virgin Blue Holdings Limited consolidated group

Published: 2020-05-26 06:26:04
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Virgin Blue Holdings Limited, an Australia-based company, is involves in the air hose industry. The company ‘s sections include long and short draw. The company owns a fleet comprising of 68 Boeing 737-700 & A ; 800 series along with Embraer E-170 and E-190 aircrafts. Virgin Blue Airlines maps approx 2100 flights per hebdomad to 24 national metropoliss and centres and 8 international topographic points including ports in Figi, New Zealand, Tonga, Vanuatu, the Cook Island and Samoa.
Virgin blue had been established in the twelvemonth 2000 as entirely owned subordinate of Virgin Group. In 2002 Virgin, along with Partrick invested in the air hose field. In the twelvemonth 2008, Virgin Blue Holdings Limited came into being and floated on the exchange for selling the retentions of Virgin Group. Virgin Blue Holdings ‘ chief operation is in the air hose concern in Australia, while it operates in air transit and agenda sector besides.
SWOT Analysis Of Virgin Blue Holding Limited
Strengths:
Motivated direction: The direction of the Virgin Blue Holding Limited is extremely motivated and continuously involved in value betterment procedure. A motivated squad ensures giving it ‘s best to gain ace net incomes.
Invention: The corporate degree scheme of this company is invention. This helps the company in fixing the niche section for itself. Besides helps the company in holding a upper manus over rival.
Young staff: Strength of Virgin Holding Limited lies in their staff which is comprised of immature people. This will increase their work efficiency and productiveness, and therefore take to superior net income devising.
Failing:
Capital Intensive Business Lines: – Virgin Blue Holdings concern is extremely a capital intensive concern therefore necessitating managing of heavy investing and care cost. The point to make breakeven excessively is therefore, longer than otherwise.
Low return on investing: The air hose industry is extremely volatile and cyclical in nature and normally have low return on investing.
Opportunities:
Niche market: Alternatively of aiming the multitudes to wing economic system and certain concern category crowd, the company targets the pupil and this section has high growing chances.
Less competitory market: Another chance for the company is that this market is less competitory market and has high growing range, and therefore it would enable them to acquire the mover ‘s advantage and going market leader thereby gaining ace net income.
Richard Branson: Richard Branson passion for aircraft besides helps in enlargement of concern.
Menace:
Existing participant: Existing rival can move as a menace for Virgin Blue and impact their market portion. Besides there is a menace from the entry of new participant.
Air flight safety: Another concern for air hose industry is safety. This is the most common sector for terrorist onslaught and any such event can damage their concern and trade name to a greater extent.
Key audit hazards:
Advanced flight engagement: This is a major audit hazards that hearers face. Though the company receives the ticket sum on the same twenty-four hours as the ticket is booked, this dealing is non reflected in the books until the flight is schedule to run. Hence, this may take incorrect analysis of the fiscal place of Virgin Blue Holding Limited.
Cross currency hazard: Another aspect that makes hearer analysis ineffective is transverse currency payment. Gross is reported in books on the footing of gross acknowledgment rule, but in future when the payment become due so this will extremely blow up or deflate the history of the company. This will hold deceptive consequences in reading of the fiscal statement of company.
Fuel fudging hazard: Airline company normally enter into future fuel contracts to fudge their hazard against fuel monetary value. These hazards are extremely bad and are outside the fiscal book of the air hose company. This hazard made appraisal by hearer undependable.
Lease figure for plus: Alternatively of purchasing the assets, leasing of assets is done and therefore it is easy for them to pull strings fiscal figure which will do the analysis by hearer ineffective.
Cost of operation: The Company normally manipulates operational cost. This inflates or deflates the company net income consequently and therefore leads to misdirecting analysis by hearer.
Steping down of Virgin ‘s long term CEO Brett Godfrey:
Earlier in 2010 virgin long term CEO Brett Godfrey stepped down and was replaced by John Brochette. Due to alter in CEO, the hearers need to properly stress or measure the undermentioned points:
Change in corporate administration: Steping down of the bing CEO can take to corporate administration issues in organisation. If the new CEO is non as effectual, so it leads to bureaucratism and history use issues in an organisation. The hearer needs to measure this country carefully.
Accountability of board of manager: The hearer should do certain that same patterns of answerability and displace is maintained in organisation. There should non be any embezzlement or abuse of financess available.
Analysis of portion keeping pattern alteration: The hearer needs to analyse if there is any alteration in the shareholding form due to stepping down of the CEO. This will assist in measuring the bing support construction of the company and aid in measuring public assistance of stockholder by maximization stockholders wealth. The hearer should decently look into where the financess are being divested.
Current Financial Information of Virgin Blue Holding Limited:
Net net income after income revenue enhancement for 6 month period, ended 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 net income of the period is made up of:
In these 6 months to 31/12/2009, the implicit in OPs net income before revenue enhancement went up by 34 % and got net income of $ 80.1million.
Basic EPS for the 6 months period ended 31/12/2009 had a net income of 3.3cents/share.
Business sections
Virgin Group has 2 sections, described below that are Group ‘s concern section. The concern section offers different services and merchandises, and managed individually as they need different types of aircraft. For each concern section, the internal direction studies are reviewed on monthly by the board. The drumhead describes operations in each section:
aˆ? Short draw – Operationss utilizing short draw fleet by Boeing 737 aircraft & A ; Embraer 190 and 170 aircraft. This includes Australian, New Zealand, Trans-Tasman and Pacific Island winging.
aˆ? Long draw – Operationss that use Boeing 777 fleet. This preponderantly comprises of Trans-Pacific winging.
Partnerships of Virgin Blue Holdings Limited:
Etihad signed a partnership with Virgin Blue Holdings Limited:
All Virgin Holding services will now be available besides to the Etihad clients, by opening up of 44 finishs in Asia, Australia, Pacific Islands, New Zealand, and Los Angles.A The codification portion understanding will come to consequence right from October. As consequence of this trade, Virgin Australia is to go as first Australian bearer operator to run at the Middle East since 1991.
Together with V Australia and Eithad Virgin Blue will be able to wing twenty seven flights in between Abu Dhabi & A ; Australia which will include the services between Abu Dhabi-Sydney, Melbourne & A ; Brisbane.
Etihad direction said that Australia is a really of import market topographic point for us & A ; we are happy that after this coaction we will be able to function our intent better. We presently fly about 450,000 people a twelvemonth to Australasia, we think this trade will add approximately 100,000 to that figure. With this coaction we will be in a place to function the USA & A ; Europe trips better from Australia, that will give us a distinguishable advantage over the other rivals, improves the sustainability & A ; comfort of travel.
The understanding would joing the Blue Group and Etihad frequent flyer plans, therefore leting the clients to gain & A ; burn ” stat mis in all of these air hoses that are involved in trade.
Partnership of Virgin Blue & A ; V Australia with Virgin America for Frequent Fly:
Virgin Blue with its long-haul air hose, V Australia has partnered with Virgin America to give benefits to trueness clients to acquire some points when they take flight on sister air hoses. This merely means that people going through any of these 3 flights will gain some recognition that will be deducted under frequent going plan. This partnership has applied from April, 2010.
This exchange understanding will enable Virgin Blue or V Australia ‘s Velocity client to gain Velocity points & A ; vice-versa through any of the 3 flights. Virgin Blue is showing this as benefits to its invitees & A ; a act of Customer relationship direction.
Virgin Blue squad says that their slogan is that people from whole USA & A ; other parts of the universe program their Tourss with our developing air hose household. Virgin blue is celebrated for its client service, merchandise invention, great design & A ; high degree of installations. Virgin Blue has got Best National Airline for 3rd back-to-back twelvemonth at the Australian National Travel Industry Awards.

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