5 ms·

Quite a few of these articles have come out over the past few months. This one has glossed over exactly why they aren't making money. According to almost every

by omfg 14y ago

Quite a few of these articles have come out over the past few months. This one has glossed over exactly why they aren't making money. According to almost every other article it's because of aggressive expansion. New plane orders, updates to their on board systems next year, new routes, more planes on their pre-existing routes and on and on. This article has quite a bit more info: http://www.sfgate.com/business/article/Virgin-America-a-hit-but-losing-money-3762763.php http://www.sfgate.com/business/article/Virgin-America-a-hit-... Sounds like they are getting ready to slow down expenses next year and prep for an IPO. Not really sure what's made this particular article stick and make the rounds but it's conveniently short on info seemingly to make a more dramatic story.

pg 14y ago
Now this is a case where a dismissive top comment was actually useful-- in fact more informative than the article itself.
- sakai 14y ago
  Still working on that problem...
- Jonanin 14y ago
  And definitely a case where an automated "middlebrow dismissal" detection algorithm would fail. I looked into it and still don't think it is possible. What makes this comment different from the bad ones? It seems entirely dependent on the context of the article itself.
  - omfg 14y ago
    I'm not trying to dismiss this article per say. Usually I only chime in when something seems a bit off and I've found other info that might be useful to people reading said article. For instance, this article seems to have been spawned by the recent Businessweek article re: financial forecasts for the airline industry and specifically what it may do to VA: http://www.businessweek.com/news/2012-10-17/virgin-america-trims-flights-labor-cost-on-slower-winter http://www.businessweek.com/news/2012-10-17/virgin-america-t... The tone of this particular write-up sounded very doom and gloom when in actuality VA seems to be following the annual trends of the airline industry while also pursuing an aggressive growth strategy. Not unlike many extremely popular startups (whether it works out or not, well, that's still quite a few years away).
    - xianshou 14y ago
      "per se" (BTW, thank you for saving me the necessity of reading past the first page of the article.)
  - pg 14y ago
    One thing I learned from spam filtering is not to underestimate what a statistical filter can find. For example, the comment in question contains a url. I could easily imagine that turning out to be a valuable predictor. The defining quality of the middlebrow dismissal is that it's a cache dump of the writer's prejudices, and someone doing that doesn't even take the time to think, let alone look up urls; they're not even really writing to inform.
    - bravura 14y ago
      atpassos_ml told me an even cooler heuristic. He was doing some research on detecting which comments are authoritative based upon textual analysis (no username or social analysis). They made a complicated topic model, but found that the following heuristic is almost as good for automatically detecting authority in comments: Favor the person with the broadest vocabulary compared to other people in the thread. This was evaluated on Yelp and Goodreads. IIRC it may have also been tested on HN data. (reference: Alexandre Passos, Jacques Wainer, Aria Haghighi, What do you know? A topic-model approach to authority identification.) The problem with disclosing these heuristics as part of your filtering algorithm means that people will try and game the system. They'll include URLs and expanded vocabulary to get higher-ranked comments. And then we win. (Relevant: http://xkcd.com/810/ http://xkcd.com/810/)
      - Evbn 14y ago
        URLs and expansive vocabulary? That perfectly describes most spam I get, a viagra store link and a random Hemingway excerpt.
        ecuzzillo 14y ago
        Sure, but spam is already reasonably under control here; post-spam-filter, those things could be predictive, along with other things nobody thinks of.
    - waterlesscloud 14y ago
      Funny, I've been mentally building a model the last few days and thinking that URLs that are frequently referenced in comments are likely to be good indicators of middlebrow dismissals. Thinking specifically of links to the various "laws" of internet discussion, logical fallacies, and so on. But also potentially looking at things like the urls that get linked into regular discussions such as weight loss or political topics. That might go beyond the immediate scope, but comments with those links might have other factors similar to middlebrow dismissals, so they might be worth building into the model. Trying to catch something like this post would be interesting to add. Maybe an anti-indicator if the link adds value. Then you get into figuring the value of the content of the link. Maybe compare it to the content of the original link, which you would want to be similar, but not too similar. Yeah, that might get involved.
  - paulsutter 14y ago
    There's no need to analyze the text. The answer will be in _who_ is doing the upvoting and downvoting. I wouldn't even look at the author, just the voters. Google's Pagerank didn't have to look at the page contents to understand which pages are higher quality. At Quantcast, we categorize related content based on who is visiting, no need to look at the content itself. The best way to find out is to open up the HN data, in either a closed or open research project. I'd help fund a closed Kaggle competition with NDAs if that's whats wanted. Just consider it a way to learn what works. pg himself would be the final arbiter and likely implementor of what works.
rdl 14y ago
I never see high fares on Virgin flights, and they're often not full. It's pretty easy to gauge the profitability of an airline by fares sold and number of fares, and return on capital and fixed costs by how many flights are done with each plane in a month. For a while, Virgin was doing $69-89 flights from SFO to SEA, etc., which is probably below the point where even a 100% full aircraft is profitable. I don't think they're anywhere near as efficient on plane utilization as Southwest, due to network. The other way to make money is to make small amounts on each (full) plane, but fly a lot of flights with those planes.
jvm 14y ago
> According to almost every other article it's because of aggressive expansion According to the numbers, they lose a ton of money on their existing flights: http://crankyflier.com/2012/07/05/virgin-america-posts-terrible-first-quarter-loss-has-one-year-to-prove-itself/ http://crankyflier.com/2012/07/05/virgin-america-posts-terri... So I think the gist of the article posted is about right, even if they didn't back it up with the relevant facts: VA's equilibrium fares don't meet their operating costs.
JumpCrisscross 14y ago
Aggressive, strategically mis-placed, expansion. Other airlines, e.g. Spirit, are expanding profitably on their ultra low-cost carrier (ULCC) model. The airline industry is being commoditised - Virgin America is trying to move against that trend [1]. What is happening is more fundamental than ill-timed expansion; it's a rejection of Virgin America's core hypothesis (U.S. air travellers will trade low prices and a bit of convenience for a delightful experience). An analogy could be Verizon trying to swim against the global trend towards carriers becoming dumb pipes. The new routes Virgin America is opening are losing money; Virgin America is presently rolling back select routes [2]. This lends is more consistent with a bad strategy versus 'unlucky exposure to unforseeable systemic factors' hypothesis. Further evaluating the specific factors to Virgin America versus expansion-related woes hypothesis, one notes that Spirit Airlines (NASDAQ:SAVE) spent 3.6% (44.2%) of revenues (operating cash flow) on capital expenditures in 2011. Delta spent 0.1% (8.2%). Average CAPEX/Revenues spread between Spirit and Delta from 2008 to 2011 was 3.5% (Delta has been out-spending Spirit in 2012). Spirit is generally profitable. Virgin is betting on a strong consumer or business travel spending recovery in the U.S. If that happens , temporarily depressing costs will work out fine if it can stay solvent long enough to be proven right. If the recent shifts are structural changes, however, they're out of luck. [1] http://www.economist.com/blogs/gulliver/2012/10/virgin-america http://www.economist.com/blogs/gulliver/2012/10/virgin-ameri... [2] http://www.businessweek.com/news/2012-10-17/virgin-america-trims-flights-labor-cost-on-slower-winter http://www.businessweek.com/news/2012-10-17/virgin-america-t... [3] http://www.sec.gov/Archives/edgar/data/1498710/000149871012000076/save-2012930x10q.htm http://www.sec.gov/Archives/edgar/data/1498710/0001498710120... Spirit Airlines Q3 10-Q Filing
- marvin 14y ago
  Great point. There's a counterpoint to this "reverse commoditization" in my home country: Norwegian. Norwegian aggressively pushes for newer planes, lower fuel costs, lower staff costs, less bureaucracy, less legacy processes and less overhead in every step of the chain. They don't take it to the extremes that Ryanair does, but the more nuanced approach seems to piss passengers off less. Norwegian consistently kicks its competitors' asses (one of them state-owned), because rising fuel prices is pushing margins for all airlines. Having a small edge here means everything when you're competing on price, which is what passengers go for.

by omfg 14y ago

pg 14y ago

Now this is a case where a dismissive top comment was actually useful-- in fact more informative than the article itself.

sakai 14y ago
Still working on that problem...
Jonanin 14y ago
And definitely a case where an automated "middlebrow dismissal" detection algorithm would fail. I looked into it and still don't think it is possible. What makes this comment different from the bad ones? It seems entirely dependent on the context of the article itself.
- omfg 14y ago
  I'm not trying to dismiss this article per say. Usually I only chime in when something seems a bit off and I've found other info that might be useful to people reading said article. For instance, this article seems to have been spawned by the recent Businessweek article re: financial forecasts for the airline industry and specifically what it may do to VA: http://www.businessweek.com/news/2012-10-17/virgin-america-trims-flights-labor-cost-on-slower-winter http://www.businessweek.com/news/2012-10-17/virgin-america-t... The tone of this particular write-up sounded very doom and gloom when in actuality VA seems to be following the annual trends of the airline industry while also pursuing an aggressive growth strategy. Not unlike many extremely popular startups (whether it works out or not, well, that's still quite a few years away).
  - xianshou 14y ago
    "per se" (BTW, thank you for saving me the necessity of reading past the first page of the article.)
- pg 14y ago
  One thing I learned from spam filtering is not to underestimate what a statistical filter can find. For example, the comment in question contains a url. I could easily imagine that turning out to be a valuable predictor. The defining quality of the middlebrow dismissal is that it's a cache dump of the writer's prejudices, and someone doing that doesn't even take the time to think, let alone look up urls; they're not even really writing to inform.
  - bravura 14y ago
    atpassos_ml told me an even cooler heuristic. He was doing some research on detecting which comments are authoritative based upon textual analysis (no username or social analysis). They made a complicated topic model, but found that the following heuristic is almost as good for automatically detecting authority in comments: Favor the person with the broadest vocabulary compared to other people in the thread. This was evaluated on Yelp and Goodreads. IIRC it may have also been tested on HN data. (reference: Alexandre Passos, Jacques Wainer, Aria Haghighi, What do you know? A topic-model approach to authority identification.) The problem with disclosing these heuristics as part of your filtering algorithm means that people will try and game the system. They'll include URLs and expanded vocabulary to get higher-ranked comments. And then we win. (Relevant: http://xkcd.com/810/ http://xkcd.com/810/)
    - Evbn 14y ago
      URLs and expansive vocabulary? That perfectly describes most spam I get, a viagra store link and a random Hemingway excerpt.
      - ecuzzillo 14y ago
        Sure, but spam is already reasonably under control here; post-spam-filter, those things could be predictive, along with other things nobody thinks of.
  - waterlesscloud 14y ago
    Funny, I've been mentally building a model the last few days and thinking that URLs that are frequently referenced in comments are likely to be good indicators of middlebrow dismissals. Thinking specifically of links to the various "laws" of internet discussion, logical fallacies, and so on. But also potentially looking at things like the urls that get linked into regular discussions such as weight loss or political topics. That might go beyond the immediate scope, but comments with those links might have other factors similar to middlebrow dismissals, so they might be worth building into the model. Trying to catch something like this post would be interesting to add. Maybe an anti-indicator if the link adds value. Then you get into figuring the value of the content of the link. Maybe compare it to the content of the original link, which you would want to be similar, but not too similar. Yeah, that might get involved.
- paulsutter 14y ago
  There's no need to analyze the text. The answer will be in _who_ is doing the upvoting and downvoting. I wouldn't even look at the author, just the voters. Google's Pagerank didn't have to look at the page contents to understand which pages are higher quality. At Quantcast, we categorize related content based on who is visiting, no need to look at the content itself. The best way to find out is to open up the HN data, in either a closed or open research project. I'd help fund a closed Kaggle competition with NDAs if that's whats wanted. Just consider it a way to learn what works. pg himself would be the final arbiter and likely implementor of what works.

rdl 14y ago

I never see high fares on Virgin flights, and they're often not full. It's pretty easy to gauge the profitability of an airline by fares sold and number of fares, and return on capital and fixed costs by how many flights are done with each plane in a month. For a while, Virgin was doing $69-89 flights from SFO to SEA, etc., which is probably below the point where even a 100% full aircraft is profitable. I don't think they're anywhere near as efficient on plane utilization as Southwest, due to network. The other way to make money is to make small amounts on each (full) plane, but fly a lot of flights with those planes.

jvm 14y ago

> According to almost every other article it's because of aggressive expansion According to the numbers, they lose a ton of money on their existing flights: http://crankyflier.com/2012/07/05/virgin-america-posts-terrible-first-quarter-loss-has-one-year-to-prove-itself/ http://crankyflier.com/2012/07/05/virgin-america-posts-terri... So I think the gist of the article posted is about right, even if they didn't back it up with the relevant facts: VA's equilibrium fares don't meet their operating costs.

JumpCrisscross 14y ago

Aggressive, strategically mis-placed, expansion. Other airlines, e.g. Spirit, are expanding profitably on their ultra low-cost carrier (ULCC) model. The airline industry is being commoditised - Virgin America is trying to move against that trend [1]. What is happening is more fundamental than ill-timed expansion; it's a rejection of Virgin America's core hypothesis (U.S. air travellers will trade low prices and a bit of convenience for a delightful experience). An analogy could be Verizon trying to swim against the global trend towards carriers becoming dumb pipes. The new routes Virgin America is opening are losing money; Virgin America is presently rolling back select routes [2]. This lends is more consistent with a bad strategy versus 'unlucky exposure to unforseeable systemic factors' hypothesis. Further evaluating the specific factors to Virgin America versus expansion-related woes hypothesis, one notes that Spirit Airlines (NASDAQ:SAVE) spent 3.6% (44.2%) of revenues (operating cash flow) on capital expenditures in 2011. Delta spent 0.1% (8.2%). Average CAPEX/Revenues spread between Spirit and Delta from 2008 to 2011 was 3.5% (Delta has been out-spending Spirit in 2012). Spirit is generally profitable. Virgin is betting on a strong consumer or business travel spending recovery in the U.S. If that happens , temporarily depressing costs will work out fine if it can stay solvent long enough to be proven right. If the recent shifts are structural changes, however, they're out of luck. [1] http://www.economist.com/blogs/gulliver/2012/10/virgin-america http://www.economist.com/blogs/gulliver/2012/10/virgin-ameri... [2] http://www.businessweek.com/news/2012-10-17/virgin-america-trims-flights-labor-cost-on-slower-winter http://www.businessweek.com/news/2012-10-17/virgin-america-t... [3] http://www.sec.gov/Archives/edgar/data/1498710/000149871012000076/save-2012930x10q.htm http://www.sec.gov/Archives/edgar/data/1498710/0001498710120... Spirit Airlines Q3 10-Q Filing

marvin 14y ago
Great point. There's a counterpoint to this "reverse commoditization" in my home country: Norwegian. Norwegian aggressively pushes for newer planes, lower fuel costs, lower staff costs, less bureaucracy, less legacy processes and less overhead in every step of the chain. They don't take it to the extremes that Ryanair does, but the more nuanced approach seems to piss passengers off less. Norwegian consistently kicks its competitors' asses (one of them state-owned), because rising fuel prices is pushing margins for all airlines. Having a small edge here means everything when you're competing on price, which is what passengers go for.