PPRuNe Forums - View Single Post - "Virgin Australia Mk II could launch in as little as three months"
Old 25th Apr 2020, 23:22
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Dale Hardale
 
Join Date: Jan 2006
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Perth and Adelaide both blocking virgin aircraft......

Welcome to the realities of complex voluntary administrations - this is not unexpected and will be probably be resolved through the individual aircraft lessors and the airports. If any of the affected aircraft are owned by Virgin, then the airports will have to deal directly with the administrators. In the case of leased aircraft, it will mean that these aircraft are effectively removed from the Virgin fleet as of now.

Either way, it goes to show that "alice in wonderland" perceptions of a nice smooth transition from Virgin to a restructured operation on the other side are in no way connected to the reality of what's happening.

As said above, actions such as these 2 airports have taken are significant trigger points and can initiate a run of creditor claims and refusal of supply, which will mean the only option is receivership and sale of assets at effectively fire sale prices.

One of the main reasons the administrators were talking up this "fantastic" restructure was the value of the frequent flyer program. This value will be zero if receivership goes ahead. There is also some doubt that it is fully funded.

Additionally the $ 6.8 billion debt is expected to rise even further as creditor lists and claims are finalised. This is significantly more than the touted $ 5 billion.

This is all a huge problem for the administrators who will have to act quickly to get the best out of a terrible situation.
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