Originally Posted by
galdian
Mick I think is suggesting Cyrus don't have the financial power required to accomplish the above.
Does anyone - apart from (maybe) someone who sees assets to be stripped?
Apologies Mick If I've misunderstood or misquoted you, from what I see what you say is just fair common sense, well imparted with no malice intended to anyone.
Spot on, that is what I'm suggesting. Cyrus are not a big player.
Back of the napkin, it's going to take $5 billion give or take a few hundred million to resurrect VA as a Qantas Mini-Me (full service domestic + international + LCC). If that's Cyrus's plan they will need a deep pocketed partner.
Same same with Indigo, they're about the same size as Cyrus. That said, Indigo wouldn't be buying into the Qantas Mini-Me delusion - Bill Franke hasn't been successful in the industry for 35 years for no good reason. They would have their eyes on something like a $2.5 - 3 billion cash and debt deal with fleet of about 50 narrow bodies and half the current workforce flying domestic and trans-Tasman. That's not going to get a tick from the unions though.
Bain and BGH/AusSuper/Temasek are the only ones currently in the race that can fund the Qantas Mini-Me delusion. Bain would know that that model won't make money for a couple of years, at best, and their preference will be for something leaner and meaner. Enter the unions. Lean and mean is a hard sell to them hence Bain's 'let's make flying fun again' - that was a pitch to the employees, not the customers.
BGH might just be dumb enough to try the Delusion but as they'll need to turn to AusSuper for probably half the funding I think they'll struggle to make a bankable investment case. Who knows though, stranger things have happened when super funds want to get creative.
The further complicating factor is that everything has to happen at the speed of heat because Deloitte probably only has 30 days of runway left.
Although the real rub in these proceedings is that you've got VA's management and the unions being confronted by real airline/business people for the first time in over a decade, possibly ever. It's classical clash of cultures stuff - on one side a bunch who've repeatedly rewarded failing to succeed, people who believe that they were just one tweak of the business away from being great and on the other you've got a bunch with a totally antithetical approach; failing is never acceptable and they've got a suitcase of wire brushes of various grades that they're not afraid to use in order to avoid it. And the interactions between the two are being forced to play out in a contrived manner over a very compressed time frame.