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Virgin Group "Shake Up" Tiger to International routes

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Virgin Group "Shake Up" Tiger to International routes

Old 7th Aug 2015, 00:53
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Virgin Group "Shake Up" Tiger to International routes

https://au.news.yahoo.com/thewest/bu...utes-to-tiger/

Was expected that Tiger take over some international routes, so that has come to plan, great news for them to expand!

Interesting to note that those redeployed 737-800's are heading to the trans tasman route on what I believe is already a heavily contested market. Will we see them go back into places such as Dunedin?

Interesting....
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Old 7th Aug 2015, 05:39
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If Qantas announced that they were offloading routes to Jetstar to increase profitability the protests would be deafening!
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Old 7th Aug 2015, 09:55
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Same from ginger beers now that Alliance is moving all heavy maintenance to Austria and shutting down some positions in BNE...
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Old 7th Aug 2015, 13:14
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Ollie Onion,

Given it has been happening constantly for more than a decade I hardly think the "protests would be defending" as we are all pretty well used to it by now.

Of far more relevance though is the fact that the offloaded flying will still be flown by Virgin pilots. You wouldn't have heard any complaining if the Qantas guys were allowed to fly their own planes on their old routes under their usual award even after the jets got a new paint job.

Looks like their are 2 ways of skinning a cat and one way avoids infuriating your employees, but that tends not to be path Qantas choose. I'm glad to see Virgin have take the other path.
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Old 8th Aug 2015, 00:16
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Someone can confirm if this is wrong but looks like the flights are now on the TigerAir website

Perth - Bali from $89
Adelaide - Bali from $99
Melbourne - Bali from $129
Saw some much cheaper return flights while looking around, $90 for Melbourne, $47 for Perth
Also when searching the flights i found:
Melbourne
TT 1: Melbourne 10:05 AM - Denpasar (Bali) 01:30 PM
TT 8: Denpasar (Bali) 09:10 PM - Melbourne 04:45 AM +1 day
Adelaide
TT 17:Adelaide 12:25 PM - Denpasar (Bali) 04:20 PM
TT 10: Denpasar (Bali) 12:20 AM - Adelaide 06:45 AM
Perth
TT 19: Perth 07:30 PM - Denpasar (Bali) 11:10 PM
TT 18: Denpasar (Bali) 02:40 - Perth 06:30 PM
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Old 8th Aug 2015, 00:39
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could VA pilots be new guys on lower pay though ?
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Old 8th Aug 2015, 00:43
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When I first saw those fares I thought they were for the taxi to the airport.
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Old 8th Aug 2015, 00:49
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taxi is more & Uber is 10% more from today, thanks to very dodgy ATO. Uber will challenger ATO & win(as ATO is being totally inconsistent & has been got at by old taxi industry), but will 10% come off Uber prices when that happens ?
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Old 8th Aug 2015, 00:52
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In all Fairness Ollie Onion, I don't believe Virgin made any claims about not handing off business to Tiger...
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Old 8th Aug 2015, 01:16
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Nice how Jetstar is now doing $119 flights from Melbourne - Bali in April/May next year!
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Old 8th Aug 2015, 02:02
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I thought Tigerair was 100% owned by Virgin Australia (VAH). VAH is a majority foreign owned company (owned by AirNZ, Etihad and Singapore). So how does a majority foreign owned company operate international services out of Australia utilising Australian rights?
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Old 8th Aug 2015, 02:03
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So what will this mean for outside employment and career progression in VA?

More DEC F/O's for TT, or perhaps early commands for lower ranked VA pilots, ALA QF/JQ MOU's?

Anyone heard anything? Might be some stress on the way for regional managers!
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Old 8th Aug 2015, 03:18
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Keith M


What's the difference between VA ownership & TT ownership in terms of flying internationally from OZ.
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Old 8th Aug 2015, 07:17
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What is known as VA is actually 2 entities – VAH and VAIH. VAIH was created while VAH was a majority domestic owned airline. The whole purpose of the creation of VAIH was to comply with the air navigation act and allow more foreign investment in the domestic part of Virgin.


The proposal with tigerair is materially different (to the VAH and VAIH split) in that it already is majority foreign owned right now, and cannot pretend that it wants to set up a holding company to hive off its international business and remain majority Australian. For tigerair to operate internationally, the major shareholders (NZ, EY and SQ – or collectively VAH) need to divest themselves of enough shares to local (read Australian) shareholders so the tigerair business is at least 51% owned by Australians.

Background on the VAH / VAIH split:
Virgin Australia Announces Proposed New Structure
23/02/2012
________________________________________
Virgin Australia Holdings (VAH) today announced a proposed new structure of its business designed to ensure ongoing compliance with the Air Navigation Act (ANA) which limits foreign ownership of Australian international airlines to 49%.

The proposed structure involves securing majority Australian ownership in VAH’s international airlines by changing the shareholding and governance structure of the international airlines to ensure compliance with the ANA. The proposed new structure will facilitate overseas institutional investment in the domestic business, which will improve the liquidity of VAH and in turn enhance shareholder value.

There will be no change from an operational perspective for staff and consumers as both the domestic and international businesses will continue to operate as an integrated airline under one brand.
The proposed new structure involves creating a new unlisted entity Virgin Australia International Holdings Pty Ltd (VAIH) which will hold VAH’s international airlines. VAIH will:

o be owned by existing VAH shareholders and have a majority independent board of directors;

o be comprehensively serviced and funded by VAH, and therefore will not involve any visible changes from a consumer perspective; and

o mean business as usual from a staff perspective in terms of the day to day running of the airline.

VAH became subject to the 49% foreign ownership cap of the ANA after launching its international operations in 2004. Foreign ownership has traditionally been well below the cap, however over the past 12 months it has been sitting only marginally below 49% and therefore Virgin Australia has been evaluating options to ensure ongoing compliance.

The VAH Board of Directors and management believe that the proposed new structure is the best option for Virgin Australia and its stakeholders to ensure long-term growth and access to capital for its business.

Foreign investors should note that the foreign ownership levels of VAH are sitting only marginally below the 49% cap. If foreign investors acquire shares in VAH before the Ex-Date for the in-specie dividend and as a result foreign ownership in VAH exceeds 49%, those shareholders may be required to dispose of their interest in VAIH shares under the cure mechanism in the VAIH Constitution.

Subject to the satisfaction or waiver of certain conditions, it is intended that dividend will be determined on 16th March 2012, with implementation by the end of March 2012.

Proposed new structure – Overview

The proposed new structure involves the creation of a new entity VAIH which will hold the international airlines of VAH and (subject to satisfaction or waiver of certain conditions) will be effected through the determination and payment of an In Specie Dividend to VAH shareholders who have acquired their VAH shares prior to the proposed Ex-Date, 21 March, on a 1:1 ratio. The In Specie Dividend effectively gives each shareholder a beneficial interest, in the VAIH shares and these shares will be administered by a Trust.

VAIH will be governed by a separate independent Board of Directors, with majority independents, including an independent Chairman*.

VAIH shares cannot be traded and only sold under limited circumstances. Shareholders who are not permitted to hold shares in an unlisted entity can for a period of 60 days from Distribution Date sell their interests in VAIH shares to a person nominated and approved by VAH (Subject to VAH and foreign persons not holding more than 49% of VAIH).

Under the proposed new structure VAIH will enter into a long term service agreement and long term loan agreement with VAH. VAH will provide VAIH with a range of services, including the provision of aircraft, fully trained crew, maintenance, and back office services. VAIH will be charged a management fee for these services andthere will be no change for staff or the day to day running of the airline.

VAIH’s loan and future working capital requirements will be comprehensively funded by VAH.

The VAH Board of Directors proposes to assign a nominal value to VAIH shares ($0.000001 per share) on the implementation date. Under the proposed new structure VAIH will have an approximately nil equity position on implementation date, as VAH have decided to recapitalise the balance sheet of VAIH prior to implementation to ensure it has sufficient assets to cover liabilities on day 1.

The proposed new structure is to be effected by the In Specie Dividend. That dividend will only be determined and distributed by VAH if the following conditions are satisfied or waived by VAH:

o no legal action exists which would prohibit the implementation of the proposed new structure, including no event or occurrence which would have a material adverse effect on the ability of the international entities to continue to operate their operations; and

o where required the consent of key stakeholders are secured.

If these conditions are not satisfied and VAH decides not to proceed with the dividend, VAH will notify the market immediately.

The proposed timing for implementation is as follows:

o 23rd February 2012 - Announcementof intention to determine In Specie Dividend, subject to conditions

o 23rd February 2012 - Information Statement lodged with ASX

o 16th March 2012 - Determination and announcement of In-Specie Dividend (subject to satisfaction or waiver of conditions)- market will be notified in advance should this date change

o 21st March 2012 Ex-Date - third business day after determination and announcement of In Specie Dividend (shareholders who acquire shares in VAH after this date will not be eligible for shares in VAIH)

o 27th March 2012 Record Date - seventh business day after determination and announcement of In Specie Dividend

o 28th March 2012 (target) - Distribution and Implementation Date – market will be notified in advance should this date change

*Proposed VAIH Board of Directors:

o Graham Bradley (Chairman and Non-Executive Director) – Currently Chairman of HSBC Bank Australia, Stockland Corporation, Anglo American Australia and Po Valley Energy.

o Anthony Shepherd (Non-Executive Director) – Currently President of the Business Council of Australia, Chairman of Transfield Services and a Director of Victorian Rail Track (VicTrack).

o Lindsay Tanner (Non-Executive Director) - former Federal Minister for Finance and Deregulation who has extensive experience in aviation industry issues. Since leaving politics in 2010, he has worked as a special advisor at Lazard Australia and as adjunct professor at VictoriaUniversity.

o Neil Chatfield (Non - Executive Director) - Virgin Australia Chairman.

o John Borghetti (Non - Executive Director) - Virgin Australia CEO and Managing Director.
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