I'm nominating this one for post of the year. S&P have said that the balance sheet can handle it, even with around A$1.1bn in debt due over the 2020 fiscal year. Yes, VA are paying a pretty penny to bring Velocity completely back in-house, but loyalty programs are more lucrative than the airlines attached to the side of them, so the board will see this as a big win. Selling points to banks raises cash and is highly profitable, especially when you control the redemption conditions. This will help add to their cash flow and gives them a lot more flexibility to run the program how they see fit in the future.
And that certain WA operator...yeah they screwed themselves for years and years with that one after they got hoodwinked into paying exorbitant leases on the ATRs that are sitting in storage in Nelson. Mind you, they seem to have done their best to gut what was left of the operator in the meantime, so much so it became better to cosy up with Alliance. But hey, hindsight is 20/20, right?
Agreed, great post. Some of the arm chair expert comments on here are unbelievable. Why do pilots think they understand how to run or manage a mulit-million dollar business any more than they think executives known how to fly a multi-million dollar aircraft? Most pilots can barely make basic investments without losing money yet for some reason we see comments on these forums over and over and over like there is an intrinsic understanding of the complexities of business. Reading a lot of these comments is as laughable as watching a bunch of 4 year olds discuss how to they're going to manage a 4 hour simulator session. Stick to what you know, admit when things are beyond your understanding and if you can't do that, read up on the Dunning-Kruger effect!