Virgin Atlantic
Jobsagoodun.
Once again misinformation about the Flybe failure which was so prevelant on Flybe threads.
The Shares in Flybe were in aworthless shell cpmpany. The operating company was acquired by Connect Airways for free.
Connect Airways was only 30% owned by Virgin, so they wer'nt in total control Criticism of Branson in this respect is unwarranted
Once again misinformation about the Flybe failure which was so prevelant on Flybe threads.
The Shares in Flybe were in aworthless shell cpmpany. The operating company was acquired by Connect Airways for free.
Connect Airways was only 30% owned by Virgin, so they wer'nt in total control Criticism of Branson in this respect is unwarranted
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bean - I'm not talking about shareholders of Flybe Group plc. That's water under the bridge so my reference to Flybe is in relation to the failure of the business in March 2020 and who the shareholders were at this time.
When Flybe failed, it did so because the shareholders of Connect Airways (Cyrus, Stobart and Virgin) were unwilling, or unable to provide funding to keep it going. In the face of Covid-19, VS decided to save their own business which whilst unfortunate for Flybe and its employees, is not unsurprising. Unfortunately, VS now finds itself in a reversal of roles with DL being unwilling to commit further and thus it is now up to Branson to decide the fate of VS.
If VS meet the criteria that makes them eligible for Government support as Easyjet have done, then I believe that they should receive this funding, but in my view it should only be an option if the existing shareholders of VS contribute match funding (raised by whatever mechanism) too.
When Flybe failed, it did so because the shareholders of Connect Airways (Cyrus, Stobart and Virgin) were unwilling, or unable to provide funding to keep it going. In the face of Covid-19, VS decided to save their own business which whilst unfortunate for Flybe and its employees, is not unsurprising. Unfortunately, VS now finds itself in a reversal of roles with DL being unwilling to commit further and thus it is now up to Branson to decide the fate of VS.
If VS meet the criteria that makes them eligible for Government support as Easyjet have done, then I believe that they should receive this funding, but in my view it should only be an option if the existing shareholders of VS contribute match funding (raised by whatever mechanism) too.
Last edited by JobsaGoodun; 24th Apr 2020 at 13:20.
Post correction, the statement still stands . Ezy have published public accounts which show profits in every single one of the last 20 years. You can even use the IPO prospectus from 2000 to see the profits back to 1998.
Look at page 40
https://corporate.easyjet.com/~/medi...prospectus.pdf
If we're making a clinical decision in respect of funding then the decision for Government should be relatively straightforward.
For monies provided in commercial terms, whether from the bank or the Government...
1) What can the funds be secured against in order to protect the lender?
2) What is the ability for the borrower to repay the funds.
When Flybe failed, it did so because it's shareholders (which included VS) were either unable or unwilling to inject more funds into the business. In turning to Westminster for help, the Government eventually chose not to lend with reports at the time suggesting that there was nothing to anchor the loans against. Flybe had already sold off/mortgaged its available assets just to get to as far as it did. Whilst it's clear that keeping VS in business ensures employment for a great many people, who will then continue to contribute income tax etc. this shouldn't be taken into consideration, just as it wasn't when Flybe failed.
Personally, if VS has sufficient assets, be they owned aircraft, engines, aircraft spares, property/real estate etc that they can use as collateral for a loan, then I see no reason for them not to have access to funds from Westminster. Personally, I would prefer it if the level of investment coming from Government were match funded by equity raised by the current shareholders as I think there is a need that both SRB and Delta to have skin in the game to avoid the taxpayer taking all the risk.
With DL have already stated that they are either unable, or unwilling to inject more funds into the business it's down to SRB. First and foremost he's a businessman and a shrewd one at that - ask any previous Flybe shareholder....but I'm not sure which side of the fence he'll fall.
It's pretty clear that VS is the baby of the Virgin Group, hell he sold Virgin Records to keep it afloat (and recently demonstrated his love of the business again by choosing not to cede control via the recent AF/KLM deal), however if he sees more long term value in putting the business into administration and then establishing a phoenix from the wreckage, I wouldn't put it past him to take this route.
Much as I'd like to buy the #virginfamily guff, I'm not wholly convinced. Business is business after all.
I doubt you'll find many Flybe employees enjoyed a warm and fuzzy feeling having supposedly been 'loved' by Virgin.
For monies provided in commercial terms, whether from the bank or the Government...
1) What can the funds be secured against in order to protect the lender?
2) What is the ability for the borrower to repay the funds.
When Flybe failed, it did so because it's shareholders (which included VS) were either unable or unwilling to inject more funds into the business. In turning to Westminster for help, the Government eventually chose not to lend with reports at the time suggesting that there was nothing to anchor the loans against. Flybe had already sold off/mortgaged its available assets just to get to as far as it did. Whilst it's clear that keeping VS in business ensures employment for a great many people, who will then continue to contribute income tax etc. this shouldn't be taken into consideration, just as it wasn't when Flybe failed.
Personally, if VS has sufficient assets, be they owned aircraft, engines, aircraft spares, property/real estate etc that they can use as collateral for a loan, then I see no reason for them not to have access to funds from Westminster. Personally, I would prefer it if the level of investment coming from Government were match funded by equity raised by the current shareholders as I think there is a need that both SRB and Delta to have skin in the game to avoid the taxpayer taking all the risk.
With DL have already stated that they are either unable, or unwilling to inject more funds into the business it's down to SRB. First and foremost he's a businessman and a shrewd one at that - ask any previous Flybe shareholder....but I'm not sure which side of the fence he'll fall.
It's pretty clear that VS is the baby of the Virgin Group, hell he sold Virgin Records to keep it afloat (and recently demonstrated his love of the business again by choosing not to cede control via the recent AF/KLM deal), however if he sees more long term value in putting the business into administration and then establishing a phoenix from the wreckage, I wouldn't put it past him to take this route.
Much as I'd like to buy the #virginfamily guff, I'm not wholly convinced. Business is business after all.
I doubt you'll find many Flybe employees enjoyed a warm and fuzzy feeling having supposedly been 'loved' by Virgin.
If business is walking dead, as it appears to be in being unable to generate a profit, in probably the most benign environment the airline industry had from 2015-2019 then it has bugger all chance of being able to do so from 2020 onwards.
Virgin model was a good one when introduced but sell by date was a while ago. There is no reason for Govt money to be pumped into a loss making business when if there are other options it could eaily do.
What is the USP (Unique selling point) of VS ? I cannot find a single one that cannot be done by someone else who is doing it profitably.
SRB and his media acolytes will shout scream and abuse to get their funding deal but my concern is whether there is a strong business behind the whole lot or a house of sand.
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Agree, it was very much of its time a d always seemed a little left field which helped the image. In recent years it has just becomd ssme old same old. Maybe a relaunch with a strong usp might work.
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Good post.
If business is walking dead, as it appears to be in being unable to generate a profit, in probably the most benign environment the airline industry had from 2015-2019 then it has bugger all chance of being able to do so from 2020 onwards.
Virgin model was a good one when introduced but sell by date was a while ago. There is no reason for Govt money to be pumped into a loss making business when if there are other options it could eaily do.
What is the USP (Unique selling point) of VS ? I cannot find a single one that cannot be done by someone else who is doing it profitably.
SRB and his media acolytes will shout scream and abuse to get their funding deal but my concern is whether there is a strong business behind the whole lot or a house of sand.
If business is walking dead, as it appears to be in being unable to generate a profit, in probably the most benign environment the airline industry had from 2015-2019 then it has bugger all chance of being able to do so from 2020 onwards.
Virgin model was a good one when introduced but sell by date was a while ago. There is no reason for Govt money to be pumped into a loss making business when if there are other options it could eaily do.
What is the USP (Unique selling point) of VS ? I cannot find a single one that cannot be done by someone else who is doing it profitably.
SRB and his media acolytes will shout scream and abuse to get their funding deal but my concern is whether there is a strong business behind the whole lot or a house of sand.
VS net promoter scores continue to rise as investment is made into the product. Can the same be said for BA at the moment? Virgin's USP is the crew first and foremost, and the onboard experience. But I'm probably saying this to someone who only ever flies Ryanair 🙄
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Fat A1bert,
Whilst I’m sure the majority on this forum wish to see VS pull through the challenge before them, the industry is littered with those that were ‘nearly’ profitable, or ‘moving in the right direction’.
What matters most is where the business is now. The promise of profitability does not equal profitability so it can’t be a reason for government support.
In the end, if existing shareholders believe in their business plan delivering profit, they should be confident to invest themselves. If not, then personally, I’m not convinced as to why it should be expected that the taxpayer should bear the risk.
Whilst I’m sure the majority on this forum wish to see VS pull through the challenge before them, the industry is littered with those that were ‘nearly’ profitable, or ‘moving in the right direction’.
What matters most is where the business is now. The promise of profitability does not equal profitability so it can’t be a reason for government support.
In the end, if existing shareholders believe in their business plan delivering profit, they should be confident to invest themselves. If not, then personally, I’m not convinced as to why it should be expected that the taxpayer should bear the risk.
Last edited by JobsaGoodun; 25th Apr 2020 at 18:27.
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I'd say that Virgin Atlantic like the majority of businesses around the world are on their knees. While it may not have been the most profitable of airlines historically, i'd reckon that Covid-19 apart, they'd still trade comfortably as a going concern for many, many years. Compare that to the like of Thomas Cook, Monarch or Flybe who all died of "natural causes".
Governments around the world are injecting cash into their home based in order to keep them trading as it's not always possible (even if they wanted to) for existing shareholders to stump up. Should Virgin Atlantic go then the only winners I can see are the shareholders of IAG and, should they survive, Norwegian (which would be somewhat ironic).
I also don't see how Virgin can carry a £600 million loan, so hopefully some sort of equity/loan combination can be agreed.
Governments around the world are injecting cash into their home based in order to keep them trading as it's not always possible (even if they wanted to) for existing shareholders to stump up. Should Virgin Atlantic go then the only winners I can see are the shareholders of IAG and, should they survive, Norwegian (which would be somewhat ironic).
I also don't see how Virgin can carry a £600 million loan, so hopefully some sort of equity/loan combination can be agreed.
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Easy pickings for IAG or Lufthansa post Administration. Rather hoping that Virgin survive, but when your owners are not interested, what hope is there?
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https://www.telegraph.co.uk/business...box=1587846955
SRB now racing to find external investment to raise funds, or to sell Atlantic by the end of May according to the Telegraph.
SRB now racing to find external investment to raise funds, or to sell Atlantic by the end of May according to the Telegraph.
Last edited by JobsaGoodun; 25th Apr 2020 at 22:19.
Do us a favour...go download the past two annual reports. Note in particular that, despite two years of losses, things are very definitely moving in the right direction. VS has been disproportionately affected by the Trent 1000 issue the past few years, almost half of the entire fleet are 787s and at any time up to four have been grounded. That comes at a cost. Rather than farm out work to airlines their passengers had never heard of (BA, erm.. Air Belgium anyone? 🙄 ), the management proactively secured leases on four A330-200s, that comes at a cost, but ensures the product is worth the price for the customer.
VS net promoter scores continue to rise as investment is made into the product. Can the same be said for BA at the moment? Virgin's USP is the crew first and foremost, and the onboard experience. But I'm probably saying this to someone who only ever flies Ryanair 🙄
VS net promoter scores continue to rise as investment is made into the product. Can the same be said for BA at the moment? Virgin's USP is the crew first and foremost, and the onboard experience. But I'm probably saying this to someone who only ever flies Ryanair 🙄
As for snide cheap shot, have flown T/A on all operators going back to Pan Am and TWA, Virgin is tired and what was once innovative is now no better than what anybody else is offering. The difference is that others making money.
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TWA and Pan Am. Amazing. As an industry enthusiast I'll take your view lightly. A trend toward profitability would be considered by any potential investor. The matter is then how long it will take the investor to see returns on their investment.
Paxing All Over The World
As I have said before, this is no normal recession. If we lose competition - we lose a lot more than just another carrier. The rules of the 20th century market economy no longer apply.
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I remember Virgin starting when I had my first job as a travel agent around the same time as People Express , both Gatwick to Newark. In those days they both offered a fresh lower prices option to New York, compared to BA Pan Am and TWA. Subsequently I flew with them on an educational visit to Miami and enjoyed the flight, I remember being offered Ice Cream while watching the film ( only one then ) , great innovation. Before this trip the last time I'd been to the US was on a Laker DC10 !
Many years later when I was working in a different industry all together, I flew Heathrow to Delhi and to Hong Kong. Both flights were nothing special at all, and felt a bit stale. Personally they would not be my first choice of carriers, not when there is choice to where they operate.
Many years later when I was working in a different industry all together, I flew Heathrow to Delhi and to Hong Kong. Both flights were nothing special at all, and felt a bit stale. Personally they would not be my first choice of carriers, not when there is choice to where they operate.
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Do us a favour...go download the past two annual reports. Note in particular that, despite two years of losses, things are very definitely moving in the right direction. VS has been disproportionately affected by the Trent 1000 issue the past few years, almost half of the entire fleet are 787s and at any time up to four have been grounded. That comes at a cost. Rather than farm out work to airlines their passengers had never heard of (BA, erm.. Air Belgium anyone? 🙄 ), the management proactively secured leases on four A330-200s, that comes at a cost, but ensures the product is worth the price for the customer.
VS net promoter scores continue to rise as investment is made into the product. Can the same be said for BA at the moment? Virgin's USP is the crew first and foremost, and the onboard experience. But I'm probably saying this to someone who only ever flies Ryanair 🙄
VS net promoter scores continue to rise as investment is made into the product. Can the same be said for BA at the moment? Virgin's USP is the crew first and foremost, and the onboard experience. But I'm probably saying this to someone who only ever flies Ryanair 🙄
It’s all very well Virgin’s priority being the crew and onboard experience (strange given the stories in the media about the meals on Virgin being so poor they referred to the crime scene cookie) but that doesn’t pay the way.
Last edited by BA318; 26th Apr 2020 at 22:10.
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Virgin Atlantic Holdings
Unless they break off Virgin holidays beforehand, it too would fall should the airline.
