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Old 25th May 2020, 12:50
  #1271 (permalink)  
MickG0105
 
Join Date: May 2016
Location: Sunshine Coast
Posts: 226
Originally Posted by galdian View Post
Mick

Thanks, clear info and stuff to think about, appreciated.

Q: probably pertains to "ownership" but when AN went down everyones FF points disappeared, no longer any value.

If there's no VA2 do all the velocity points disappear??
Suppose simply the Q is difference between AN Frequent Flyers and VA Velocity, why there'd be a difference.

Pass! on the VA2 question. Disappointing but a measured response.

Cheers
Back in the AN days the whole frequent flyer/loyalty thing was nowhere near as sophisticated as it is today. As such I am pretty sure that there was no separate business entity back then for the FF business. The points were issued as a form of unearned revenue and held on the AN balance sheet. And if I recall correctly while you could earn points by other than flying (payments using Diners Card for instance) you could only redeem the points for flights back then.

Velocity is a business in its own right with multiple revenue streams (loyalty partners who buy points to award to their customers) and a range of opportunities to expend points (Velocity shop) that is not exclusively restricted to the airline. That said, Velocity's fate is likely closely intertwined with VA. I'm struggling to picture how it might survive as a stand alone business if VA went down the gurgler but I'd need to see what percentage of points earned and redeemed involved VA. I guess that it could ensconce itself with whatever emerges from the ashes as a turn key FF partner.

On the VA Mk.II question, I think that the only bidder that is interested in keeping the Virgin brand and retaining as much of the pre-administration business as possible is BGH and only because of the union tie up with AustralianSuper and the Temasek connection. I don't think that they'll be able to make the numbers work though. Neither Cyrus, Indigo or Bain would have even a passing interest in the Qantas Mini-Me model being hawked by Scurrah and Strawbridge although I'm sure that they're happy to feign same to stay engaged and get further and better information.

Realistically, without a deep pocketed partner, neither Cyrus nor Indigo could afford to buy into anything other than a very lean mean core route domestic machine and even that would stretch their balance sheets. Bain could write the requisite cheque for something grander but I suspect that they will have already frightened the unions (hence the 'let's make flying fun' soft sell - that's not for customers, that's an attempt at assuaging the unions).

And apart from those permutations and combinations of the bidders and their preferences, there's that rapidly unravelling thread attached to the sword that is the sales process - Deloitte are fast running out of money. It's not often that you see a sales process go belly-up because the auctioneer had to fold his tent. And that puts the parties who think that they'd rather pick over a liquidation in the box seat. It wouldn't be hard to simply run the clock down.

For all of those reasons I think that it's currently just too hard to say yea or nay.

Last edited by MickG0105; 25th May 2020 at 12:52. Reason: Tidy up
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