Who wants to buy Virgin Blue?

[Thylacine]

Who wants to buy Virgin Blue?
Ben Sandilands on Crikey.com.au writes:


The chances of something much bigger than a change in control of Virgin Blue occurring by year’s end are rising after its founding CEO Brett Godfrey told reporters at yesterday’s AGM that he wouldn’t stick around under the"‘wrong" owners.

Toll Holdings has 62 per cent of VBA. And it has been candid for some time about not being long term if the right price comes along. But most of the questions about who might provide the right price are being asked of the wrong suspects.

In recent days both Singapore Airlines and Emirates have reaffirmed their disinterest. Yet no one has been able to get a response so far from Temasek Holdings, the superannuation investment arm of the Singapore Government, which owns 54 per cent of Singapore Airlines, 11 per cent of Tiger Airways (in turn 49 per cent owned by Singapore Airlines) and for that matter 19 per cent of Jetstar Asia, which is almost half owned by Qantas.

Temasek is a sector investor, and somewhat like the late Sir Peter Abeles with trucking companies, appears unconcerned at owning all or part of competing companies that may or may not go for each other’s throats as long as the outcomes look good.

Similarly, the entities to keep in view in Dubai include Dubai World, the holding company for the business and project portfolio of the UAE, or perhaps even more sharply focus on its Istithmar division, which specialises in higher risk opportunities including aerospace services and even airlines.

Dubai World and Temasek have an enormous advantage over Emirates or Singapore Airlines. Because they aren’t airlines they are allowed to own up to 100 per cent of a domestic Australian airline and 49.9 per cent of any international services it might operate.

And there is another opportunity for airline investment and rationalisation in this region which has long taunted Qantas (and once burned Singapore Airlines for more than $700 million) in the form of Air New Zealand, which is well run, profitable, and majority owned by the New Zealand government, which like Toll, doesn’t see itself as a long term airline investor.

The effective joint ownership or control of Air New Zealand and Virgin Blue (and its own NZ subsidiary Pacific Blue) mightn’t pass the regulatory hurdles over which Qantas stumbled when it went for the Kiwi carrier, but it is awfully tempting in airline terms. And there is the outside chance, which is driving some of the rumours, that Air New Zealand might even persuade Wellington that it should buy the Toll stake.

Finally there is Richard Branson, who is sitting on 26 per cent of VBA, has signed up for 20 per cent of AirAsiaX, and is disagreeing with Singapore Airlines over the price at which he might buy back the 49 per cent of Virgin Atlantic he sold it at the end of 1999.

There are doubts as to whether Branson has the money or inclination to buy back full ownership of Virgin Atlantic plus take out Toll, but it would be rash to second guess what he might do, including sell or enlarge his stake, as a potential new controlling stakeholder for Virgin Blue comes out of the shadows.

Place your bets. Who would be the best owner as far as future employment prospects are concerned?

[Centaurus]

CFMEU maybe... after all, if VB went under there would be plenty of jobs as brickies labourers

[Flight Me]

Air New Zealand, Ouch:}

[Howard Hughes]

Don't get Buster started...:E

[2p!ssed2drive]

Flight Me -

That took guts :E I have a cheeky smile though....

[Pundit]

Surely Qantas would not object to Air New Zealand buying into DJ.

The removal of DJ as competion would be a cert.

Does Helen know she is in for another bail out?

[A Yak From Yemen]

On the topic of VB, anyone who had interviews in Sept/Oct for Embraer heard yes or no yet............anyone.........:cool:

[Buster Hyman]

Branson won't buy in again. Unless he can buy it for a song & sell it at a huge mark up.

ANZ? The commercial branch of the RNZAF? I doubt it!

SQ? Tiger will do their plans justice I reckon.

My inside sources have indicated that the letters WGAF will go a long way in resolving this.....:oh:

[Howard Hughes]

On the topic of VB, anyone who had interviews in Sept/Oct for Embraer heard yes or no yet............anyone.........
YES!
A colleague has the nod...:ok:

[Toluene Diisocyanate]

Know of at least 2 Easterns pilots that have a nod but no start dates and several being reference checked at this moment.
Best of British to all.:ok:
More interviews next month! Yippee!:ok:



See youse!:}

[wirgin blew]

Surely the Aust Govt wouldn't let ANZ anywhere near VB. There are plenty of staff at DJ who remember what happened last time.

:=

[Kiwiguy]

On the other hand Air NZ did buy into Ansett Australia once upon a time. Things are about to get very gnarly in the NZ market with DJ's launch and someone is going to fall over.

Be rather amusing if Air NZ became a white knight investor for DJ.

[emu787]

Temasek, the Singapore government owned investment company, triggered the military COUP in Thailand when they got a Thai passport holder who has lived in Malaysia for 40 years to buy the equivalent of telstra from the Thai Prime minister, Thaksin. Thaksin is now awaiting extradition from UK to face very serious fraud charges......will the Prime Minister of Australia allow this Singapore government owned entity to do business dealings of the same magnitude in Australia when they have a track record like what happened in Thailand ????????

Surely they knew they were breaking the Thai Corporte Laws!!

[Friendly Pelican]

Well done, Emu!

You've put your finger on the common thread between so many different, apparently isolated incidents.

I watched with horror as AN imploded. Despite living here in NZ, I had many friends from an earlier life who lost their jobs in that fiasco. I was just as embarrassed as a knee-jerk anti-Kiwi flavour developed here on PPRuNe, even among those with whom I had debated in a comradely manner previously. (That's you Buster! :ok:)

I offer to the audience that NZ were not the incompetent interlopers that it has suited others to portray them.

Despite appearances at the time, I'm firmly of the opinion that NZ/AN could have, should have, worked. I hold that opinion to this day, and feel that an NZ/DJ alliance would not only be a superb option for both airlines, but would give a certain degree of closure to personalities who fought hard on the way down. (GT was a dad at my daughters' school. No- one deserves to have the lights put out the way he had. I hear he's lost 20-odd kilos recently: great to hear! Even better that he may now have the sweetest of all opportunities: the one to say:'I told you so'.)

I believe that both airlines were victims of a Singapore-centric d!ck size competition.

At the time of NZ's acquisition of AN, NZ's largest shareholder was Brierley Investments, an originally-NZ but by that time Singapore-domiciled company. Brierley's overwhelming shareholder was one Temasek investments. That's right, the same Temasek who owned SQ, and who were sniffing around AN effectively delayed the implementation of NZ's recovery plan for AN.

Why? As I observed before, It all comes down to d!ck size; and these guys were playing a game where the airlines concerned weren't actually the issue!

As I said, what then eventuated at the airlines was a cross between Greek tragedy and French farce. I copped attitude which not only did I not deserve, but neither did my airline or country. By the same token, I can empathise with the raw nerves which AN's demise left among its 'family'.

The final indignity was that New Zealand's Labour government, who would seek to portray themselves as internationalists, took the isolationist option to rescue only NZ and not AN. Six years after the events in question, both NZ and AN (now in its DJ embodiment) are financially healthy, but without the strategic upside that a unitary organisation would have afforded. (Watch this space as the international industry comes to town.)

I don't profess to have a crystal ball; but I do know that history offers us lessons which, if left unheeded, we are doomed to repeat.

I studied Latin for six years: my last reading was Aeneid II - the fall of Troy. In that book, a Trojan looks askance at the Horse which has been left behind and says:'Timeo Danaos, et dona ferentes'.

In the context of Australasia's aviation market, Laocoon's message could not be more apposite: I mistrust the Singaporeans, even when they bring us gifts.

[Buster Hyman]

even among those with whom I had debated in a comradely manner previously. (That's you Buster! :ok:)
Whackety-whack, whack, whack!!!:eek:

Hmmm...probably a little true, but when I vented, it was mostly at the "suits" that couldn't even organise a queue at Centrelink!:rolleyes: (Or, so I thought....):ooh:

[Skystar320]

Friendly Pelican

You seen fixed on the dick size Frendly Pelican, you sure your not hiding the fact that you have a problem with your size?

Other than that - quite an argumentative post on teh AN - NZ debacle, Tesmark should have brough into AN instead of NX

[B A Lert]

If his throwing money around is anything to go by, perhaps John Howard may make an offer!!:E:E

[blow.n.gasket]

Oh dear me ,I didn't know that Stan Howard owned Virgin and they needed bailing out.:}

[salamundi]

Hi!
I know of five guys. All interviewed in September. Three on the Embraer starting in feb and the other two starting very soon on the 737 (Ansett!)

[KaptinZZ]

With Tiger starting soon, what is the future for DJ?

The Tiger market share has to come from somewhere, and Tiger owners have deep pockets; Qf/Jetstar have the next deepest, and DJ not very deep, so something has to give.

It's unfortunate but therre is going to be some pain not too far down the track for some employees, and maybe Dj owners are looking desperately to unload before the price sags.

[Slasher]

FP wrote I mistrust the Singaporeans, even when they bring us gifts.

Too true and a very valuble maxim to live by. The point about Temasek and SQ is theyve never EVER been pioneers or risk-takers. Temasek wouldntve embarked on Tiger Aust if they didnt believe there was potentialy serious money in it and eventual benefits like the SQ long-time aim of gettin Pacific routes.

The menage-a-trois of 89 set the legal industrial precident for future AWAs. The ACTU knew it even if the average unwashed yob didnt. The surprising thing it took so long for IR laws to be changed to the draconian level it is now. Coupled with the Libs IR laws the timing was good with SerfChoice ensureing low salarys. I seen Tiger Aust AWA contract - it stinks. Even if Labor gets in and dumps SerfChoice its cleverley claused in such a way that very little in the AWA can be changed for the better. But no-one held a gun to anyones head to join TA so whatever industrialy-related crap that goes on in there now or later doesnt interest me in the slightest unless it slops over to VB.

I had a good look - Tiger apears to have HUGE financial backing with deep pockets and the players are prepared to very very patientley wait for the bucks and off-shoot benefits to start rolling in. Its entering the market to the thunderus applause of the public, which is generaly the way people react to short-sited optamism. Im not against mobs making ventures into aviation markets but Temasek is another bloodey thing alltogether. Once the stratagy of glits glammer and novelty wears off and TA has orchastrated a fully-secure market foothold in 2-3 years time will the pain start to bite. I reckon in the end TA will eventualy cause a drag-down of the salary and conditions at VB and others asuming it/they last that long. Shame if you ask me (and you didnt).

[Short_Circuit]

Lets face it, SQ wants into Aus with domestic connections ie TA, screw Aussie airlines into oblivion (bankroll TA) and take over the big money
Aus – USA routes. :=
S_cct

[KaptinZZ]

Slasher, TA are paying more than VB, so it will be difficult to see them dragging VB's T&C down. If you'd said that VB was putting pressure on QF T&C's, and responsible for Jet* T&C's being so poor, then I'd agree.

And let's not use this as another thread of how we wuz wronged in '89, whoever 'we' may be.

The T&C of QF and AN post '89 didn't drag any conditions down; they increased them, and I'll be saying no more on '89. That's already been done to death.

My view is that TA will generate a small increase in the market, but take business from VB, and some from the QF companies, but it will be VB that suffers most.

Regarding SQ not being risk takers, isn't that the way to go? I would have thought so.

Short Circuit, that's business and it's never been any different.

[coaldemon]

I think you will find that Jetstar will be the ones that have the most to lose with Tiger. As for TA paying more, the terms I have heard are very conditional for TA and I would be surprised if they actually end up getting more than VB drivers.