Virgin Atlantic International ?
Thread Starter
Join Date: Jan 2015
Location: Centre of Universe
Posts: 370
Likes: 0
Received 0 Likes
on
0 Posts
Virgin Atlantic International ?
Join Date: Aug 2013
Location: London
Posts: 837
Likes: 0
Received 0 Likes
on
0 Posts
There's stuff about this on the Virgin Atlamtic thread
http://www.pprune.org/airlines-airpo...lantic-42.html
http://www.pprune.org/airlines-airpo...lantic-42.html
Join Date: Dec 2011
Location: Middlesex (under the flightpath)
Posts: 1,946
Likes: 0
Received 0 Likes
on
0 Posts
Virgin Atlantic International ?
Different (worse) terms and conditions for staff (like BA "mixed fleet")?
Preparation for a sale/the closing of the LGW operation?
The DL tail wagging the VS dog?
Some of the above?
All of the above?
None of the above?
Preparation for a sale/the closing of the LGW operation?
The DL tail wagging the VS dog?
Some of the above?
All of the above?
None of the above?
Join Date: Oct 2015
Location: Lincoln
Posts: 1
Likes: 0
Received 0 Likes
on
0 Posts
None of the above.
This is simply a way for Virgin to secure jobs and investors by very cleverly securing assets to a company that is linked to VAL but not in it's integrity. So if there was another 911 type event, funding would be available to tied them over unlike the last time it happened. Virgin does not own many of it's aircraft so has little or no collateral to satisfy investors to give up their hard earned cash. By setting up this company with certain asserts tied to it, money can be borrowd relatively as cheap as leasing the aircraft. That is about as much as I will discuss on this as it is company sensitive but as a company pilot, I feel a lot more secure with this very clever business plan. It may not appear this way to the outsiders but believe me this is a very shrewd move that many companies employ. It means that all your eggs are not in one..... You get the picture.
I'm not Skipness, but from what I can see, this is my take on the story so far assuming it really is about being able to raise funds when times are tough.
It sounds like they're putting all the valuable assets (i.e. aircraft) which can be mortgaged into a a separate company from the one that actually takes commercial responsibility for the day-to-day flying of passengers.
The company holding the aircraft becomes essentially a leasing company with a customer who is very unlikely to go elsewhere. In the event of a 9/11 scenario, the aircraft can be put up as collateral - essentially mortgaged to raise emergency cash. Because the lease company is legally separate from the core airline, creditors of the core airline cannot come after the lease company to pursue any debts and thus lenders are happier about lending money to the leasing company.
This all works, as long as the core airline can show that they sold the aircraft to the leasing company at fair market value - i.e. they did not sell the aircraft for a nominal £1 which bankruptcy courts don't like. How the leasing company managed to raise the cash and how much they raised is likely to be rather sensitive.
I'm not familiar with the details, but it all rather gives the impression of an airline that is financially stressed, is taking on various legal constraints that will make day-to-day operations more fiddly, and expects to struggle to raise cash at some point in the future. Secures the airline against the immediate after-effects of 9/11 type events but doesn't say much for the long-term growth prospects of the airline. When the time comes in five or ten years for the airline group to raise cash to renew an ageing fleet of aircraft, banks are likely to be rather more nervous than they would be otherwise.
It sounds like they're putting all the valuable assets (i.e. aircraft) which can be mortgaged into a a separate company from the one that actually takes commercial responsibility for the day-to-day flying of passengers.
The company holding the aircraft becomes essentially a leasing company with a customer who is very unlikely to go elsewhere. In the event of a 9/11 scenario, the aircraft can be put up as collateral - essentially mortgaged to raise emergency cash. Because the lease company is legally separate from the core airline, creditors of the core airline cannot come after the lease company to pursue any debts and thus lenders are happier about lending money to the leasing company.
This all works, as long as the core airline can show that they sold the aircraft to the leasing company at fair market value - i.e. they did not sell the aircraft for a nominal £1 which bankruptcy courts don't like. How the leasing company managed to raise the cash and how much they raised is likely to be rather sensitive.
I'm not familiar with the details, but it all rather gives the impression of an airline that is financially stressed, is taking on various legal constraints that will make day-to-day operations more fiddly, and expects to struggle to raise cash at some point in the future. Secures the airline against the immediate after-effects of 9/11 type events but doesn't say much for the long-term growth prospects of the airline. When the time comes in five or ten years for the airline group to raise cash to renew an ageing fleet of aircraft, banks are likely to be rather more nervous than they would be otherwise.
Join Date: Aug 2002
Location: London (Babylon-on-Thames)
Age: 42
Posts: 6,168
Likes: 0
Received 0 Likes
on
0 Posts
wheres Skipness Two Alpha (or whatever the ID is now) when we need him...
Nice to know you noticed.
It's allegedly similar to what BA did with the two LCY based A318s, operate a shell company with it's own AOC and using mainline staff, handling and engineering. Something for the finance wizards to explain properly?
