Virgin Australia : 315 Million Loss - How long can they survive?

[PammyAnderson]

Another disaster result. How long can this company survive? Losses in nearly every part of the business.
How can an airline in a country that is part of a duopoly not make money?

——-———————————————————-
From the Age:

Virgin Australia has reported a $315 million full-year loss as soft demand, higher fuel costs and unfavourable currency movements made the task of turning it around an even bigger challenge for its new boss.

The result is an improvement on last year's $653 million loss, but is still the airline's third-worst performance. Virgin Airways has now posted seven straight years of losses adding up to $1.9 billion.

The company said it would make 750 corporate and head office roles redundant by the end of the current financial year to save $75 million in costs.

In May, Virgin warned that on an underlying level, which strips out some one-off costs, earnings would fall by at least $100 million and swing to a loss of $35.6 million, or lower. The result came in worse than that, with an underlying loss of $71.2 million.

Virgin's chief executive Paul Scurrah, who was brought in in March to replace long-time boss John Borghetti (https://www.smh.com.au/business/companies/virgin-australia-s-new-boss-says-he-ll-take-on-qantas-reverse-losses-20190206-p50w2w.html), said the result showed the airline must "improve" its financial performance.

"While we have continued to grow revenue and have a strong loyal customer base, we need to make changes to our costs to ensure we see financial benefit from the growth in our business," he said

[777Nine]

To answer your question about why they can't make money in a duoply is simple: poor management which resulted in poor decisions being made which led to poor results.

[The Bullwinkle]

Finally, a CEO that knows what he’s doing!
The fact that there’s 750 oxygen thieves in head office sipping lattes whilst trying to justify their made up positions is reprehensible.
The fact that Paul Scurrah has realised this just demonstrates that he does have a handle on where all the waste is actually occurring.
And if there’s 750 excess staff in head office, I shudder to think how many people that they actually have up there!
It’s about time Virgin had a CEO that’s focussed on the core business and not all the peripheral bull****.
Great to see one good decision being made after 10 years of poor decisions.
Maybe, just maybe, Virgin will be able to survive after the immense damage that has been done during the last disastrous decade.

[wheels_down]

What on earth are all these people doing?

[Icarus2001]

Virgin Australia has reported a $315 million full-year loss as soft demand, higher fuel costs and unfavourable currency movements made the task of turning it around an even bigger challenge for its new boss.

The exact same conditions that Qantas operated in profitably.

Does anyone know the total staff at VA? 750 not required, just wow.

[vhtae]

Totally spot on and agree. The perception that they’ve been top heavy has finally been acknowledged. I think now they have a CEO to fix the rot.

Finally, a CEO that knows what he’s doing!
The fact that there’s 750 oxygen thieves in head office sipping lattes whilst trying to justify their made up positions is reprehensible.
The fact that Paul Scurrah has realised this just demonstrates that he does have a handle on where all the waste is actually occurring.
And if there’s 750 excess staff in head office, I shudder to think how many people that they actually have up there!
It’s about time Virgin had a CEO that’s focussed on the core business and not all the peripheral bull****.
Great to see one good decision being made after 10 years of poor decisions.
Maybe, just maybe, Virgin will be able to survive after the immense damage that has been done during the last disastrous decade.

[Oakape]

Virgin Airways has now posted seven straight years of losses adding up to $1.9 billion.

Isn't that approximately what QF lost in ONE year a little while back? And they seem to be doing ok now.

[Ken Borough]

750 staff to go will just be the start of the blood-letting. Also to go should be their International fleet of A330s and B777s: niche operations are all well and good but they don’t pay their way in price sensitive and very competitive markets.

The new CEO has inherited a 24 carat poisoned chalice. Lucky bloke!!

[aviator777]

The exact same conditions that Qantas operated in profitably.

Does anyone know the total staff at VA? 750 not required, just wow.

10,151 in the 2018 Annual Report

[Octane]

It's not really a duopoly, the subsidised/ funded Jetstar makes it very difficult..

[dr dre]

I’ve seen this happen from time to time. Management make a big announcement about large job cuts as a way of “tightening their belts” because investors like to see companies cut costs. But after the layoffs those jobs slowly come back, except with new names and reduced conditions, and eventually the top heavy layers of office dwellers reappear.

[John Citizen]

It's not really a duopoly, the subsidised/ funded Jetstar makes it very difficult..


excuses excuses..

Isn't virgin also subsidised ?

Etihad Airways (21%)
Nanshan Group (22.4%)
Singapore Airlines (19.8%)
HNA Group (8%)

Haven't so many other airlines subsidised/funded Virgin heavily ?

[George Glass]

One of life’s great mysteries; why do people keep investing in airlines?

[dragon man]

750 staff to go will just be the start of the blood-letting. Also to go should be their International fleet of A330s and B777s: niche operations are all well and good but they don’t pay their way in price sensitive and very competitive markets.

The new CEO has inherited a 24 carat poisoned chalice. Lucky bloke!!

If I flew international I would be worried, unlike domestic here it’s a cut throat market. Plan for the worst hope for best, hope he can turn it around the last thing Australia needs is Qantas operating domestically on its own. Good luck.

[arkmark]

Virgin has so much baggage from Borghetti, that I doubt it can survive. How many types does it have in it's fleet across it's way too numerous businesses?
I think they have even more types than Ansett did before it went under.
Sky West ....... dead weight.
Tiger Air ........ dead weight ...... a low cost carrier operated by a low cost carrier .......
Overpaid executives .......
Poor decisions like the Per-DPS / ADL-DPS disaster that was beyond incompetent
Serving soup to business class PAX as though it is a meal .......

It's a superior airline to Qantas all day long, but Borghettie's poor management has killed the goose that laid the golden egg.

[arkmark]

Two factors have seen Qantas "look" good.
1. ****star isn't gobbling up so much cash flow now
2. Selling assets to make your bottom line look good

[What The]

Why don’t people just see this for what it is?
New CEO joins.
Tanks the profit first year and has large writedowns to clear the decks.
Announces large job cuts but doesn’t disparage the previous management funnily enough.
Moves on some upper level managers to bring his own team in to share the spoils.
Miraculously returns the business to profit and is handsomely rewarded for doing so.
Wash, Rinse, Repeat.

The level of corruption, incompetence and greed amongst Australian corporates is breathtaking and the rest of Australia is too busy working to live to be able to give a ****.

[Paragraph377]

Virgins issues run deep. Legacy issues created by legacy management a long time ago, with resolution of those issues having never been resolved. Il Deuce did very little for his $46m in earnings didn’t he? Issues, where does one start:

Start with the day the airline floated itself on the stock market. A lemon of an investment that has never been worthy of investing in.
Then there is the egotistical fools like Godfrey, Borghetti and an assortment of bottom feeding executive management. Some of the ‘mid-tier managers’ have been there since the beginning of the airlines life. Get rid of them! Some have never worked for another business or organisation. Time to go.
Ground handling: some of it is contracted out, time for the rest of it to be contracted out. A waste of money employing staff on the actual VA payroll. Take load controllers, duty managers, operational management, training also. Contract it out.
VA still has a half baked structure with a supposed business class and economy class. It’s not. It’s no comparison to its competition Qantas. For all its faults, Qantas has a defined structure of what is economy and what is business. The jets interiors reflect that. Virgin is an all economy layout with a couple of piddly differences up the front of the cabin. Not a true business class. I can’t believe these muppets still haven’t got it right after all this time.
‘Specialists’’: Anyone with ‘specialist’ in their job title should be dispatched to the unemployment line. Created positions for people on ‘mates rates’ or for loyalists who do nothing other than lick management’s kyber’s and drink latte’s all day. Specialists - gooone.
Multiple fleet type: The day they branched out from 737’s was another historical day in which they started to bleed money. Ansett part 2 if you ask me. Peter Ables killed Ansett the day he stood foot in Toulouse. VA management have done no better.
Airline acquisitions: oh Lordy, where does one start. Another series of poor executive decision making buying non-profitable or barely-profitable lemons at the wrong time. VA is still paying the price.
How about a decent finance team? VA have blundered on fuel hedge costs endlessly over the past 19 years and still can’t get it right. And a general head office culture consisting of overpaid almost bureaucrat style employees who act as if they are in the public service.

As has been pointed out, VA is part of a duopoly yet has never hammered home true value or been a viable investment for the average punter. It’s history of losing money is astonishing, and without numerous buy-ins and ‘bailouts’ its a miracle this lemon of an airline is still in existence. Besides, why fly VA or QF International when ANZ offers a far better service in every aspect of an airline - it’s modern aircraft, seats, lounges and customer service. Can’t be matched.

Without a doubt, this story is to be con’t........

[PPRuNeUser0184]

Besides, why fly VA or QF International when ANZ offers a far better service in every aspect of an airline - it’s modern aircraft, seats, lounges and customer service. Can’t be matched.

Without a doubt, this story is to be con’t........









Having recently flown AirNZ a number of times internationally, in my opinion QF international and domestic offer a far superior service in all aspects. The AirNZ boiled lollies are good though so I guess they got that right. Each to their own though....

[Ken Borough]

Paragraph 377,

When will you tell us what you really think? :} :ok:

[thefeatheredone]

Virgins issues run deep. Legacy issues created by legacy management a long time ago, with resolution of those issues having never been resolved. Il Deuce did very little for his $46m in earnings didn’t he? Issues, where does one start:

Start with the day the airline floated itself on the stock market. A lemon of an investment that has never been worthy of investing in.
Then there is the egotistical fools like Godfrey, Borghetti and an assortment of bottom feeding executive management. Some of the ‘mid-tier managers’ have been there since the beginning of the airlines life. Get rid of them! Some have never worked for another business or organisation. Time to go.
Ground handling: some of it is contracted out, time for the rest of it to be contracted out. A waste of money employing staff on the actual VA payroll. Take load controllers, duty managers, operational management, training also. Contract it out.
VA still has a half baked structure with a supposed business class and economy class. It’s not. It’s no comparison to its competition Qantas. For all its faults, Qantas has a defined structure of what is economy and what is business. The jets interiors reflect that. Virgin is an all economy layout with a couple of piddly differences up the front of the cabin. Not a true business class. I can’t believe these muppets still haven’t got it right after all this time.
‘Specialists’’: Anyone with ‘specialist’ in their job title should be dispatched to the unemployment line. Created positions for people on ‘mates rates’ or for loyalists who do nothing other than lick management’s kyber’s and drink latte’s all day. Specialists - gooone.
Multiple fleet type: The day they branched out from 737’s was another historical day in which they started to bleed money. Ansett part 2 if you ask me. Peter Ables killed Ansett the day he stood foot in Toulouse. VA management have done no better.
Airline acquisitions: oh Lordy, where does one start. Another series of poor executive decision making buying non-profitable or barely-profitable lemons at the wrong time. VA is still paying the price.
How about a decent finance team? VA have blundered on fuel hedge costs endlessly over the past 19 years and still can’t get it right. And a general head office culture consisting of overpaid almost bureaucrat style employees who act as if they are in the public service.

As has been pointed out, VA is part of a duopoly yet has never hammered home true value or been a viable investment for the average punter. It’s history of losing money is astonishing, and without numerous buy-ins and ‘bailouts’ its a miracle this lemon of an airline is still in existence. Besides, why fly VA or QF International when ANZ offers a far better service in every aspect of an airline - it’s modern aircraft, seats, lounges and customer service. Can’t be matched.

Without a doubt, this story is to be con’t........



Didn’t today’s announcement go at least some of the way towards acknowledging almost all of the above?
Lots of ground to cover, and there are 750 people who won’t agree with me, but it’s good to finally hear that something is happening that is relevant to the issues.

[Chris2303]

"‘Specialists’’: Anyone with ‘specialist’ in their job title should be dispatched to the unemployment line."

I know the word "specialist" isn't used but aren't pilots, reservations agents, operations personnel, loaders, "technicians"/engineers all specialists in their fields?

[JustinHeywood]

The level of corruption, incompetence and greed amongst Australian corporates is breathtaking and the rest of Australia is too busy working to live to be able to give a ****.

You’re on to something there. Long suffering small investors and taxpayers often naively believe that the ‘top end of town’ must have skills and abilities that justifies their multi-million dollar pay days.
Unfortunately, too often their skills are in networking and self-promotion.

[Superman1]

750 people being moved on will only touch the surface of waste.

Like a previous poster mentioned VA is exactly like the public service, ridiculously over staffed and everyone in the office by 930 and gone by 1430 to beat the traffic back to the gold or sunny coast... add to that it’s based in BNE which has a very limited talent pool compared to Sydney and Melbourne hence why as also mentioned quite accurately many in management there have never worked elsewhere, likely never flown JQ or QF just living in their own glorified bubble..

Good to see however the new CEO is telling it how it is and not trying to put a BS spin on the situation and talk about how amazing they are and everything was fine like the predecessor who couldn’t see past his own hubris.

I do hope PS can clean up the mess he has been left.

[mates rates]

Don’t they still have a fleet of EJets and ATR’s in moth balls they are paying leasing fees on?

[flying-spike]

“‘Specialists’’: Anyone with ‘specialist’ in their job title should be dispatched to the unemployment line. Created positions for people on ‘mates rates’ or for loyalists who do nothing other than lick management’s kyber’s and drink latte’s all day. Specialists -

There have been glimmers of hope in the past when the used car salesmen and their pets, purveyors of the Virgin flair, were dispatched. Perhaps the process needs to be repeated and maybe target the owners of “sucked mango” haircuts, man-buns and anybody drinking Kale smoothies or decaf.

[ebt]

How long can they survive? Looking at the financials, for while longer yet. They had $1.7 billion in the bank at the end of June, but do have just over $1 billion in debt repayments due in 2020. But the operations are making decent cash flow, and given they pay off the last of the aircraft that were under the EENs next year, their unencumbered asset base should rise. If they can pull off the labour and supply chain savings of $75 million and $50 million, then it becomes easier. Get the network right and optimise it for cash generation rather than dick measuring, and it'll be a doddle.

I realise that real people are going to lose their jobs here, so I'm not trying to be trite. But Scurrah is right to take the approach he has so that a lot more than 750 people will keep their jobs over the long term, and the public of Australia get a choice of two well-funded airlines to fly on.

[cooperplace]

IIRC some years ago Toll GAVE AWAY their shares in Virgin. It shows how highly they valued it.

[vhtae]

Having recently flown AirNZ a number of times internationally, in my opinion QF international and domestic offer a far superior service in all aspects. The AirNZ boiled lollies are good though so I guess they got that right. Each to their own though....

Yes let’s not forget the boiled lollies before pushback... lol

[Capt_SNAFU]

It is in the best interest of QF to keep Virgin going. The CFO has said so himself. Better to have a competitor that you know and can handle, (happy for them to make money just not so much that effects QF core business) than some new competitor that you don't know.

[AerialPerspective]

To answer your question about why they can't make money in a duoply is simple: poor management which resulted in poor decisions being made which led to poor results.

Yes and yet another line of excuses yet again "it's the market", "it's the currency", "it's the tooth fairy"... whatever... despite what people think of the competition they just announced a nearly $900M profit. There needs to be a top to mid level clean out at this organisation and I mean a CLEAN OUT... not a "right-sizing" and the rest of the BS... they mumble this garbage language every time they publicly announce anything yet they can't run the fundamental business profitably.

Wouldn't blame the new bloke as he's only been there 5 mins but in any other serious business this would bring on a massacre level of redundancies and targeted at those that don't contribute or are incompetent. It's gone beyond a joke now. For all it's glorified reputation I'm stunned SQ hasn't pulled the plug - you'd think any other company the storming out the door of it's major shareholder in Air NZ a few years ago would have had the then CEO's head on the chopping block the next day but no, he stayed and continued to be paid bonuses. If it weren't so serious it would be sickening.

[AerialPerspective]

The exact same conditions that Qantas operated in profitably.

Does anyone know the total staff at VA? 750 not required, just wow.

One of the reports said that the 750 was approximately 7.5% of the total staff so I'd say from that, around the 10,000 mark.

[AerialPerspective]

Isn't that approximately what QF lost in ONE year a little while back? And they seem to be doing ok now.

No. It's different because QF made substantial profits before and after that... it was a write down with the underlying loss being something like $646M if I recall correctly. Add up all of QF's losses and profits over the last 10 years and it's in positive territory, do the same for Virgin and it's well and truly negative. Also, someone needs to tell the paper it's Virgin Australia Airlines not Virgin 'Airways'.

[AerialPerspective]

If I flew international I would be worried, unlike domestic here it’s a cut throat market. Plan for the worst hope for best, hope he can turn it around the last thing Australia needs is Qantas operating domestically on its own. Good luck.

I doubt that will happen. If Qantas were to be in that position I wouldn't at all be surprised if NZ started a low cost domestic operation or even one of the US carriers.

[Servo]

Ground handling: some of it is contracted out, time for the rest of it to be contracted out. A waste of money employing staff on the actual VA payroll. Take load controllers, duty managers, operational management, training also. Contract it out.

I think it should be the opposite. Every contract company throughout the network is useless. Never enough staff, running between aircraft, even serving the opposition at the same time. Always new people, with little to no training and no idea.

I do not consider OTP a priority but get into the Gold Coast 10 minutes early and nearly always leave 10 minutes late.

I feel for the 750 staff, not nice to lose your job. A lot of us on here have been there. BUT, I have no doubt there are a LOT of people doing sweet f^&ck all day in and day out. One thing the airline has always been good at, is creating positions for people that do not really make any difference to the operation one bit.

Paul has certainly been given a poisoned chalice. I hope he can come through with the goods.

[AerialPerspective]

Why don’t people just see this for what it is?
New CEO joins.
Tanks the profit first year and has large writedowns to clear the decks.
Announces large job cuts but doesn’t disparage the previous management funnily enough.
Moves on some upper level managers to bring his own team in to share the spoils.
Miraculously returns the business to profit and is handsomely rewarded for doing so.
Wash, Rinse, Repeat.

The level of corruption, incompetence and greed amongst Australian corporates is breathtaking and the rest of Australia is too busy working to live to be able to give a ****.

That would be plausible and probably correct in most other businesses, but this one has been incompetently managed and not made a profit for YEARS... it's not like he came in and rang alarm bells and allowed it to tank as you say, it was at the bottom of the Marianas Trench gasping for the last breath of oxygen from it's International Airline Consortium SCUBA tank before PS arrived.

[wondrousbitofrough]

I think it should be the opposite. Every contract company throughout the network is useless. Never enough staff, running between aircraft, even serving the opposition at the same time. Always new people, with little to no training and no idea.


You forgot 'charging a small fortune when costs could be kept in-house'....

[Roj approved]

Why don’t people just see this for what it is?
New CEO joins.
Tanks the profit first year and has large writedowns to clear the decks.
Announces large job cuts but doesn’t disparage the previous management funnily enough.
Moves on some upper level managers to bring his own team in to share the spoils.
Miraculously returns the business to profit and is handsomely rewarded for doing so.
Wash, Rinse, Repeat.

The level of corruption, incompetence and greed amongst Australian corporates is breathtaking and the rest of Australia is too busy working to live to be able to give a ****.

Sooo true, watch it lose money until all the major EBA's are signed for no increase, then a miraculous turn around

[AerialPerspective]

If I were Delta, I'd step in and offer to put the owners out of their misery and offer a low price for the whole outfit. I'd insist it were NOT on a transmission of business basis so that I could throw away anything of no value and just keep the core... Order a bunch of decals for temporary application to the remaining aircraft and then re-employ those I wanted on new conditions. Re-brand the whole thing Delta Australia, keep the colours for cheaper transition and get rid of the archaic reservations system and deploy Delta's IT platform, offshore all the maintenance to the United States to Delta's technical division other than daily maintenance and get rid of every aeroplane that doesn't exist in the parent DL fleet already. LAX would be gone, absorbed into DL, HKG gone, a fleet of 737-800s and get rid of Tiger, just merge any part of value into mainline. Contract out everything except for front line supervision, back office, etc. Load Control as it would presumably now be in the Delta system could be done remotely from Atlanta. Reservations similarly could be done by a combination of res office here and out of hours switched through to the USA (just like QF did with Tulsa and Hammersmith in the 80s and 90s).
I'm no big fan of the Americans as a nation at the moment, but their companies know how to clean a place out and re-set the priorities to making money, particularly in somewhere like Oz where they only have one major competitor.

[Ken Borough]

Someone commented that some employees are classified as "specialist". In the Australian context, that seems odd but how odd is it to have a General Manager Customer Journey? Believe it or not, that position exists at Tiger!

[AerialPerspective]

Someone commented that some employees are classified as "specialist". In the Australian context, that seems odd but how odd is it to have a General Manager Customer Journey? Believe it or not, that position exists at Tiger!

I've never heard the term specialist except in government departments like the ATO, etc. Yes, GM Customer Journey, what a load of old cobblers. I reckon I know who should go first... the so-called 'People Team'... an over bloated group of control freaks that take millennia to make decisions, dictate every single dot point and full stop of every letter ever written and at least under the previous leader had most management afraid to look sideways without consulting them... absolutely ZERO commercial savvy and the BS-management-speak central distribution centre of the entire outfit. Glorified name for the 'Human Remains' department. There's probably several million saved right there.

[ADawg]

The first out the door should be the HR department. Considering all the BS candidates are subjected to during the recruitment process at considerable expense, it would seem all of that nonsense has failed to secure the best fit to manage this company. Fail.

[VH-FTS]

Sooo true, watch it lose money until all the major EBA's are signed for no increase, then a miraculous turn around

So you’re one of those w@nkers that thinks everything an airline does is to screw over the pilot group. Give yourself an uppercut champ.

[AerialPerspective]

The first out the door should be the HR department. Considering all the BS candidates are subjected to during the recruitment process at considerable expense, it would seem all of that nonsense has failed to secure the best fit to manage this company. Fail.

It goes deeper than that... I suspect that they have been at the root of recruiting the sort of people that if, by a miracle, someone has gotten through the gauntlet to actually obtain a position that they are well qualified for and have a proven track record of being adept at, this weaselly group of what can only be called a club set about undermining it and managers generally get led down the path by these no hopers, hence any expertise that - pardon the pun - 'lands' in the company is quickly sought out and eliminated... I've known more than a few people very well qualified and respected who've been parachuted into this toxic place and given the big A not long after because of I don't know, people of low intellect and total ineptitude are threatened by them or something and orchestrate their demise... often the people doing the orchestrating preside over total disasters in their own areas but that is never brought to book... at the very least the human remains department seem to have been the enablers of stupid people getting jobs who then undermine anyone who tries to get the place running in the right direction.
What's worse is that from what I'm told, they've all arrived with some HR degree but not one day of experience or understanding of (some would say even the capacity to develop an understanding of) the airline business or the special circumstances that shift and operational and/or crew operate in.

[das Uber Soldat]

The first out the door should be the HR department. Considering all the BS candidates are subjected to during the recruitment process at considerable expense, it would seem all of that nonsense has failed to secure the best fit to manage this company. Fail.
Hah, tell me about it. Telling them to stick their offer up their ass was a fabulous experience. Having interviewed for and been accepted by every major in the country, that lot were by far the worst to deal with during the interview process.

[NumptyAussie]

Hah, tell me about it. Telling them to stick their offer up their ass was a fabulous experience. Having interviewed for and been accepted by every major in the country, that lot were by far the worst to deal with during the interview process.

how many "majors" are in the country?

[LKinnon]

Wonder if the lengthy and painful Virgin pilot recruitment process will get better or worse now?

[das Uber Soldat]

how many "majors" are in the country?
4 give or take?

[JoeTripodi]

Yeah their pilot recruitment process is a joke run by failed pilot HR nobodies.
Also enjoyed turning down their crappy offer.

[Arthur D]

New guy comes in, clears the decks in the hope of setting himself up for a stellar future.
Standard CEO performance.

My only surprise is that, given Scurrah’s predecessors performance, he didn’t clear more of the decks.
750 staff is less than 10%. AJ cleared more than that in 2013 and that was from a profitable company.

Was he handed a hospital pass - possibly, but its a public company so caveat emptor. Surely he is smart enough to figure that out.

I forsee a period of pain and anguish for staff and shareholders alike.

Good Luck!

[vee1-rotate]

If I were Delta, I'd step in and offer to put the owners out of their misery and offer a low price for the whole outfit. I'd insist it were NOT on a transmission of business basis so that I could throw away anything of no value and just keep the core... Order a bunch of decals for temporary application to the remaining aircraft and then re-employ those I wanted on new conditions. Re-brand the whole thing Delta Australia, keep the colours for cheaper transition and get rid of the archaic reservations system and deploy Delta's IT platform, offshore all the maintenance to the United States to Delta's technical division other than daily maintenance and get rid of every aeroplane that doesn't exist in the parent DL fleet already. LAX would be gone, absorbed into DL, HKG gone, a fleet of 737-800s and get rid of Tiger, just merge any part of value into mainline. Contract out everything except for front line supervision, back office, etc. Load Control as it would presumably now be in the Delta system could be done remotely from Atlanta. Reservations similarly could be done by a combination of res office here and out of hours switched through to the USA (just like QF did with Tulsa and Hammersmith in the 80s and 90s).
I'm no big fan of the Americans as a nation at the moment, but their companies know how to clean a place out and re-set the priorities to making money, particularly in somewhere like Oz where they only have one major competitor.

lol..............

[havick]

If I were Delta, I'd step in and offer to put the owners out of their misery and offer a low price for the whole outfit. I'd insist it were NOT on a transmission of business basis so that I could throw away anything of no value and just keep the core... Order a bunch of decals for temporary application to the remaining aircraft and then re-employ those I wanted on new conditions. Re-brand the whole thing Delta Australia, keep the colours for cheaper transition and get rid of the archaic reservations system and deploy Delta's IT platform, offshore all the maintenance to the United States to Delta's technical division other than daily maintenance and get rid of every aeroplane that doesn't exist in the parent DL fleet already. LAX would be gone, absorbed into DL, HKG gone, a fleet of 737-800s and get rid of Tiger, just merge any part of value into mainline. Contract out everything except for front line supervision, back office, etc. Load Control as it would presumably now be in the Delta system could be done remotely from Atlanta. Reservations similarly could be done by a combination of res office here and out of hours switched through to the USA (just like QF did with Tulsa and Hammersmith in the 80s and 90s).
I'm no big fan of the Americans as a nation at the moment, but their companies know how to clean a place out and re-set the priorities to making money, particularly in somewhere like Oz where they only have one major competitor.

haha I hope you’re joking. You do realize that virgin Australia is smaller than most regionals in the USA? Any US carrier would have zero interested in a failing business.

[bangbounceboeing]

Wonder if it’s the A330 operation or the B777 operation which will likely be culled ��

[Berealgetreal]

Word on the street is pilots not affected. Maybe a trimming on HK who knows. “How valueable is the slot?” is the question I guess. I hope they can make it work.

[Colonel_Klink]

Quite a number of interesting things came out of yesterday’s announcement.....

Firstly, people here probably should show a little more empathy to the fact that 750 people will be losing their jobs over the next 12 months. That will certainly be tough on the families that are involved. 750 jobs may only represent 7.5% of the workforce - but the fact is that is a significant number or head office staff. I personally don’t know how cutting those 750 jobs won’t have an impact on day to day operations of the airline. Will flight planners, load controllers, crew controllers, rostering staff be safe? And how will this affect things like the PBS and already problematic rosters that have the troops up and about? Having said all of that - there is definitely a glut of staff in the Village and in the other ‘Head Office’ overlooking Circular Quay.

It is good to see PS making the hard decisions - they certainly need to be made to ensure that this place survives. However there is something fundamentally wrong with the culture at Virgin and this relates to operational staff as well as the office staff. Some examples:
- Single runway operations in Sydney last week, 5 paxing cabin crew but no CS due to disrupt. Not one single cabin crew was happy to act up as CS - flight cancelled and 170 people now stuck in Sydney.
- A ludicrous situation where cabin crew can’t operate a MEL PER MEL return. I’m sick and tired of heading to PH and whilst I sit around for 2 hours before coming home, that all of the cabin crew get off or go to the hotel. Or the even more stupid case of the return operating cabin crew paxing over, and the operating cabin crew over paxing home.
- VA has training managers for every fleet. It has standards managers for every fleet. It has a manager who oversees the training managers and standards managers. It has a fleet manager for every fleet. It has a manager who oversees all the fleet managers. It has base managers in every base. It has a manager to oversee the base managers. It has a manager to oversee all the EBAs. And it finally has a GMFO who oversees all the managers who oversee the managers. (Confused yet?). When a Standards Manager of a fleet of 5 or 6 aeroplanes is on Check Captain pay plus 20% (give or take) one has to wonder if those roles are safe in this right sizing. One also has to wonder why when you have all these managers in training and standard, why you have Training FOs and Check and Training Captains writing sim profiles on admin days?
- You have the situation where managers aren’t using the staff car park and instead use Short Term car parks at a cost of I’d suggest $5k a year.
- This one I might cop some stick for - but when Sydney goes down to one runway, that is not the Company’s fault. When you hear multiple crews getting on to AMCO and telling them to tell crewing that they won’t be extending, you have to wonder. Now sometimes crew are legitimately tired, and they should get off the aircraft no questions asked. But when people decide at the start of the day before it all turns to crap that they won’t be extending, then perhaps that’s part of the culture issue too. Who does the ‘screw the company’ attitude really hurt? Ultimately every time you put a limit on FDPs in an EBA the Company will roster towards that. People forget that those increased FDPs were as a result of getting 23 days off in 56.
- There is a CHC base of over 50 pilots despite their only being 1-2 departures a day from that port.

Those are just some of the cultural and systemic issues surrounding this place. Unfortunately I think the pilots have become immune to this place losing money hand over fist - and that’s a problem. The new CEO has a massive task ahead of him, I hope for the sake of a lot of guys and girls careers, and the subsequent effect on families, that he gets it right.

[juliusg]

Quite a number of interesting things came out of yesterday’s announcement.....

Firstly, people here probably should show a little more empathy to the fact that 750 people will be losing their jobs over the next 12 months. That will certainly be tough on the families that are involved. 750 jobs may only represent 7.5% of the workforce - but the fact is that is a significant number or head office staff. I personally don’t know how cutting those 750 jobs won’t have an impact on day to day operations of the airline. Will flight planners, load controllers, crew controllers, rostering staff be safe? And how will this affect things like the PBS and already problematic rosters that have the troops up and about? Having said all of that - there is definitely a glut of staff in the Village and in the other ‘Head Office’ overlooking Circular Quay.

It is good to see PS making the hard decisions - they certainly need to be made to ensure that this place survives. However there is something fundamentally wrong with the culture at Virgin and this relates to operational staff as well as the office staff. Some examples:
- Single runway operations in Sydney last week, 5 paxing cabin crew but no CS due to disrupt. Not one single cabin crew was happy to act up as CS - flight cancelled and 170 people now stuck in Sydney.
- A ludicrous situation where cabin crew can’t operate a MEL PER MEL return. I’m sick and tired of heading to PH and whilst I sit around for 2 hours before coming home, that all of the cabin crew get off or go to the hotel. Or the even more stupid case of the return operating cabin crew paxing over, and the operating cabin crew over paxing home.
- VA has training managers for every fleet. It has standards managers for every fleet. It has a manager who oversees the training managers and standards managers. It has a fleet manager for every fleet. It has a manager who oversees all the fleet managers. It has base managers in every base. It has a manager to oversee the base managers. It has a manager to oversee all the EBAs. And it finally has a GMFO who oversees all the managers who oversee the managers. (Confused yet?). When a Standards Manager of a fleet of 5 or 6 aeroplanes is on Check Captain pay plus 20% (give or take) one has to wonder if those roles are safe in this right sizing. One also has to wonder why when you have all these managers in training and standard, why you have Training FOs and Check and Training Captains writing sim profiles on admin days?
- You have the situation where managers aren’t using the staff car park and instead use Short Term car parks at a cost of I’d suggest $5k a year.
- This one I might cop some stick for - but when Sydney goes down to one runway, that is not the Company’s fault. When you hear multiple crews getting on to AMCO and telling them to tell crewing that they won’t be extending, you have to wonder. Now sometimes crew are legitimately tired, and they should get off the aircraft no questions asked. But when people decide at the start of the day before it all turns to crap that they won’t be extending, then perhaps that’s part of the culture issue too. Who does the ‘screw the company’ attitude really hurt? Ultimately every time you put a limit on FDPs in an EBA the Company will roster towards that. People forget that those increased FDPs were as a result of getting 23 days off in 56.
- There is a CHC base of over 50 pilots despite their only being 1-2 departures a day from that port.

Those are just some of the cultural and systemic issues surrounding this place. Unfortunately I think the pilots have become immune to this place losing money hand over fist - and that’s a problem. The new CEO has a massive task ahead of him, I hope for the sake of a lot of guys and girls careers, and the subsequent effect on families, that he gets it right.

Colonel Klink is right on. Couple more points, lot of disparagement in these posts and some who clearly don't fly on VA. (I am VA and QF plat). The VA Business class exceeds QF every time in catering. Flew QF business yesterday Cairns-Sydney; one white, one red wine. That's a choice? No salad. Seeded sourdough or seeded sourdough. Fly VA business often interstate and USA & HK. VA can't be beaten in J. I suspect international will go as well as Tiger, since the results show a decent profit on domestic and 7% revenue growth. Get rid of the stuff that doesn't work, and possibly even ditch the Virgin branding as this costs millions each year too.

[Berealgetreal]

Golden opportunity about nine years ago. Branding, paint scheme the works. Wish Scurrah got the job back then. Imagine he did and JB took the top job at QF..

[fmcinop]

Wonder if it’s the A330 operation or the B777 operation which will likely be culled ��
The 777 is making money whilst the A330 has done nothing but bleed it from day one. My bet is the A330'w will depart the business within the next few years.

Unfortunately when they quote international performance that includes all international flying. VANZ, VAI 737, A330 and B777. VANZ, VAI 737 and the A330 are nothing more then a boat anchor. Shutdown the VAI 737 operation, merge VANZ into VAA and get rid of those A330's.

[mostlytossas]

Golden opportunity about nine years ago. Branding, paint scheme the works. Wish Scurrah got the job back then. Imagine he did and JB took the top job at QF..
How people all forget. When JB went to Virgin he was held up as the messiah! Very pleased you all were that you had stolen him away from Qantas after he missed out on the top job there.
Even Qantas people were crying in their beer that they had got the wrong bloke.
So if he had got the job you ask? My guess Qantas would be in much the same place as it is now and so would Virgin unless they didn't try to take on Qantas full on. Virgin just does not have the economy of scale Qantas does which really hurts when things get tough.

[krismiler]

Virgin started out as a low cost carrier and came close to going under, only being saved by the demise of Ansett. It then rapidly ramped up to fill the void, changed to a full service airline, and is now looking like Ansett did before the collapse. An unnecessary mix of aircraft types, bloated office structure, unprofitable routes and a series of "why on earth did they do that ? " decisions have all added up.

With the benefit of hindsight, they would probably have been better of had they stuck to the low cost formulae of one aircraft type and strict cost control. Qantas would have let them have 1/3 of the domestic market and everyone would have been happy. Customers would have been able to choose between a premium carrier or an Australian version of Southwest Air, with the appropriate price differential.

[PlasticFantastic]

Virgin started out as a low cost carrier and came close to going under, only being saved by the demise of Ansett. It then rapidly ramped up to fill the void, changed to a full service airline, and is now looking like Ansett did before the collapse. An unnecessary mix of aircraft types, bloated office structure, unprofitable routes and a series of "why on earth did they do that ? " decisions have all added up.

With the benefit of hindsight, they would probably have been better of had they stuck to the low cost formulae of one aircraft type and strict cost control. Qantas would have let them have 1/3 of the domestic market and everyone would have been happy. Customers would have been able to choose between a premium carrier or an Australian version of Southwest Air, with the appropriate price differential.
I'm not sure that's quite right. Qantas invested heavily in setting up Jetstar to 'pincer' Virgin Blue with an even lower cost product, leaving Qantas itself free to specialise as a full service carrier. JB's move to the current VA model was a response to the fact that VB was caught in the middle, and not winning.

The alternative wouldn't have been to leave VB as it was - it would have been to strip it back to a ULCC model, and JB's view at the time was that there wasn't space in Australia for two, full-size LCCs, and that they stood a better chance of taking corporate marketshare from Qantas.

That's not a defence of JB - I think he lost sight of the need for cost control - but I do think he was right that there wasn't space for multiple LCCs. SQ learnt that with Tiger (and then JB bought it...), and NZ seem to realise this - hence their complete disinterest in entering the domestic market (well, that and having been burnt by Ansett).

[smiling monkey]

It surely doesn't help when they are still paying for leases of E190 aircraft parked in Nashville, USA. How much is that costing them per year?

[Scooter Rassmussin]

To trade losses for so long is not really sustainable, unless the profits were deliberately sent back to the overseas owners , maybe they are holding the aircraft leases at exorbitant rate, hi interest rate loans etc .
has anyone pulled the financials apart to see where the money really went .

[Berealgetreal]

You are right many did see him as the Messiah, personally I listened and gave him the benefit of the doubt as with any new employee. I became concerned when he purchased Skywest as I knew Alliance or Network were the pick of the bunch. I was indeed shouted down and told by one colleague I should leave because I wasn’t singing from the same song sheet.

Regardless, when I met him I treated him with respect and would have had I run into him on his last day. It’s just my opinion that the new CEO would have done a better job had he been afforded the opportunity 9 years ago. Maybe I’m wrong.

I’ve always believed Qf did a better job as they had that economy of scale you mention plus years more experience. I recall paxing one time on a QF 330 in uniform last minute and couldn’t believe how well I was treated, it was incredible they couldn’t do enough for me despite me being the opposition. I also noted how clean, quiet and calm the atmosphere was in the Qf terminals, I was certainly envious as the opposite is true at Virgin.

Anyway, there are a lot of valid comments on here but some are a little gleeful and I think this is concerning. If Virgin collapsed it would no doubt be replaced be a very low condition competitor with serious clout.

[krismiler]

Qantas had a "line in the sand" that they wanted 2/3 of the market. With most of the growth being in low cost they needed Jetstar to avoid stagnating. If Virgin hadn't tried to take on QF head on at the premium end, there could have been a cosy duopoly with Virgin and Jetstar not competing too aggressively while mainline carried the full service/high fare pax.

If Qantas had been too aggressive, the ACCC might have become involved, a single domestic airline with no competition wouldn't have been acceptable and QF new this, hence they were willing to allow a competitor 1/3 of the market. Virgin could have been an Australian Southwest Air with Jetstar operating on routes were mainline couldn't compete with a low cost, such as SYD - OOL.

[Berealgetreal]

I think Virgin Blue had run its course, the execution and speed at which the conversion was done was a factor in my book.

[The Bullwinkle]

Colonel Klink
This one I might cop some stick for - but when Sydney goes down to one runway, that is not the Company’s fault. When you hear multiple crews getting on to AMCO and telling them to tell crewing that they won’t be extending, you have to wonder. Now sometimes crew are legitimately tired, and they should get off the aircraft no questions asked. But when people decide at the start of the day before it all turns to crap that they won’t be extending, then perhaps that’s part of the culture issue too. Who does the ‘screw the company’ attitude really hurt?

I will take you to task on this point as your reasoning that pilots won’t extend because they want to “screw the company” is false and malicious.

Virgin Australia has an approved FRMS (Fatigue Risk Management System) in place whereby experts have calculated what is safe and what is not.

If a pilot chooses to exercise discretion, they are in effect saying that they have a greater level of expertise in Fatigue Risk Management than those who designed and implemented the FRMS.

Now if an incident occurs whilst that pilot is operating with the 2 hour discretion period, the pilot is the only one who can be held accountable as he has made a conscious decision to operate outside of the approved FRMS. This could be interpreted as negligence.

And as you say, many pilots make their decision at the start of the day not to extend.

That is in fact the wisest thing to do, rather than making a decision to extend at the end of an already long day where stress and fatigue may impair ones judgement and decision making ability.

And in one well documented case where a pilot did the “company” thing and chose to extend only to incur further delays which took the duty period beyond the allowable 2 hours of discretion, the pilot was thrown to the wolves (CASA) with no support from the company.

The reason that I will always make the decision not to extend is to protect the company, not to screw the company.

And in doing so, I will also protect my passengers, my crew, my aircraft and my licence.

[gordonfvckingramsay]

Klink, all pilots are tired and the only way to counter the culture at the top is with an inverse culture at the bottom. I don’t extend because I’ve been extending/extended for a decade or more.

[davidclarke]

If VA were to wind up the Tiger operation, what would happen to the VA pilots that have transferred over Tiger operation? Would they be able to transfer back to VA or would the be given redundancies like the rest of the TT crew?

Seriously asking for a mate.

[-41]

It surely doesn't help when they are still paying for leases of E190 aircraft parked in Nashville, USA. How much is that costing them per year?
about a million per week - 47.4 million just in lease fees excluding other ancillary costs

[-41]

The 777 is making money whilst the A330 has done nothing but bleed it from day one. My bet is the A330'w will depart the business within the next few years.

Unfortunately when they quote international performance that includes all international flying. VANZ, VAI 737, A330 and B777. VANZ, VAI 737 and the A330 are nothing more then a boat anchor. Shutdown the VAI 737 operation, merge VANZ into VAA and get rid of those A330's.

Do you have a link to financials showing the 777 is operating with a profit?

[Snakecharma]

Do you have a link to suggest that it isn’t?

[wheels_down]

Pacific would be on and off profitability. The off season United are pulling back 3 weekly to Sydney and Melbourne so obvious over capacity exists.

PS reaffirmed then importance of USA and the impact it has on its corporate accounts on Sky Mews yesterday. Hong Kong was quoted as early days.

[wheels_down]

What about the yearly $45m annual bill for the parked Airbus props and embrear jets. How long does that actually go on for?

[deja vu]

Colonel Klink is right on. Couple more points, lot of disparagement in these posts and some who clearly don't fly on VA. (I am VA and QF plat). The VA Business class exceeds QF every time in catering. Flew QF business yesterday Cairns-Sydney; one white, one red wine. That's a choice? No salad. Seeded sourdough or seeded sourdough. Fly VA business often interstate and USA & HK. VA can't be beaten in J. I suspect international will go as well as Tiger, since the results show a decent profit on domestic and 7% revenue growth. Get rid of the stuff that doesn't work, and possibly even ditch the Virgin branding as this costs millions each year too.

OMG, could you imagine no salad for a 2-3 hour flight and only one choice of wine or bread roll, oh the humanity!

[SilverSleuth]

The 777 is not a big money making machine. Occasionally it may make a bit however if you look at what it brings compared to the cost of running it over the years it has existed, then it is obviously better to use that money somewhere else. At 5 airframes it is a token toy operation. I think, as others have said, they will give the pacific flying to partners in the next couple of years if not sooner.

[Berealgetreal]

the pilot was thrown to the wolves (CASA) with no support from the company.

I’ve asked about this and its scaremongering.

If you feel you can extend then do so if not get off.

The problems started in 2014 ish when a certain chap started sitting people at airports all day then flying them home at max duty -15 minutes. Rosters and crewing practices followed on the downhill slope to gain “efficiencies”. Crew responded with sick leave, inflexibility and not extending.

With SA now appointed permanently as COO I would expect practices to improve in the long term. There is no point pretending like we are still at Brighton Le Sands because we’re not. Certainly there’s room for improvement but it will take time.

Totally get the frustrations but I just say judge it on the day. Having a blanket angry policy just isn’t healthy.
Would they be able to transfer back to VA or would the be given redundancies like the rest of the TT crew?

Transfer back GDOJ would be my guess. It was all outlined in a company email and also in union newsletters. The company isn’t closing Tiger, if anything looking to fix things and have it around for the long term.

[machtuk]

Personally (and that's all this is) I reckon Virgin should roll TT into the one company (no more TT) & operate the whole fleet efficiently with less human 'boat anchors' in the system!
They can never match QF/JokeStar so why try? Best to give the public the option of basic service right thru to first/business class across the whole network under one umbrella, one name, well most of it.
When I have to fly Airlines (mostly fly my own plane where I can as I hate Airline paxing) I shop around like most of the population does, I want choice from the one booking site, that's what the general public want.
Remember the day when flying was beyond the working class public? Well when the LCC's entered the market people couldn't get enough of the cheap flights, they would sit on a wood splintered fruit crate if they could get it cheaper...…………...advance a few years & we have competition meaning those people who where once willing to sit on that wooden fruit box now expect full service, reliability & choice, there in lies the problem, the Airlines have made a rod for their own back!

[B772]

Will MM survive the chop ?

[-41]

Do you have a link to suggest that it isn’t?


definitely not, just curious to see the financial reporting showing 777 makes a profit or loss.

[Servo]

Will MM survive the chop ?
My understanding from the documents listed with the ASX is that MM will not be staying with the company as her position was removed by design. She will stay for a little while, whilst the new structure is implemented.

[cooperplace]

So are any domestic services likely to be cut? Or do they all make money?

[Buster Hyman]

Will MM survive the chop ?

Already gone, in a teary farewell too.

[1A_Please]

So are any domestic services likely to be cut? Or do they all make money?
It is likely some routes will either be cut or moved between VA and TT. Obviously we don't know what routes make what but regional routes are probably most likely to come under pressure. There is also the possibility of using Alliance for more of the marginal regional routes.

[Buster Hyman]

VA should go back to DJ. Pretty much what Machtuk said.

They established themselves in a LCC type role, and then got handed a nice wedge of the market after AN's collapse. Delusions of grandeur meant they felt they could step up & compete with QF, but their brand & market was already established. Go back to competing with Jetstar & when the bottom line looks better, perhaps look at re-entering the premium market in conjunction with a cashed up partner.

My 2c. (which is frighteningly close to their share price atm)

[smiling monkey]

about a million per week - 47.4 million just in lease fees excluding other ancillary costs

I bet the lessors are laughing all the way to the bank. Why not bring the Ejets back in some capacity and have either VARA or Tiger operate them, or even Cobham since they already have the pilots. That makes more sense than wet leasing Alliance's fokkers to do their thin regional routes.

[The Bullwinkle]

Already gone, in a teary farewell too.
Seriously!!!
The news just keeps getting better and better!

[G.A. Boy]

It will be a teary farewell when go Gibbs!

[The Bullwinkle]

It will be a teary farewell when go Gibbs!

I doubt that very much!
I’m sure they’ll all be having cake in the village that day! :ok:

[B772]

It has just been brought to my attention Paul Scurrah and Merren McArthur knew each other from Queensland Rail during the period 2010 - 2011. Merren may not have been up to the task required !

[34R]

I don't wish to add to the commentary here about what VA should or shouldn't be doing to return themselves to profitability..... it's not my area of expertise.

I do however, know a lot of good guys and girls who work there and it never a nice thing to go through. Amid all the negativity and bullish!t you must be hearing right now, I hope things settle down and sanity is restored.

[romeocharlie]

https://www.escape.com.au/travel-advice/tigerair-ceo-merren-mcarthurs-top-packing-hacks-tip-1-dont-forget-your-undies/news-story/2f9844e7bf6abd2b2d1570540dfaad6c

MM reveals her best packing tips - looks like she'll have to use them.

[Buster Hyman]

It has just been brought to my attention Paul Scurrah and Merren McArthur knew each other from Queensland Rail during the period 2010 - 2011. Merren may not have been up to the task required !

You think she was rail roaded....

[pinkpanther1]

You think she was rail roaded....

I see what you did there...... :D

[The name is Porter]

Hah, tell me about it. Telling them to stick their offer up their ass was a fabulous experience. Having interviewed for and been accepted by every major in the country, that lot were by far the worst to deal with during the interview process.

What a load of garbage. Accepted by them all eh? Must have been that PMI exam that got you in eh?

If that's how you rejected a job offer I'd reckon they're pretty happy you didn't accept. Clown.

[das Uber Soldat]

What a load of garbage. Accepted by them all eh? Must have been that PMI exam that got you in eh?

If that's how you rejected a job offer I'd reckon they're pretty happy you didn't accept. Clown.
Aw, I've got a new pet. He's gonna follow me everywhere. How cute.

I'm pretty sure VA is busy worrying about the catastrophic performance of their business, rather than the many candidates who decided to go elsewhere after dealing with the appalling recruitment process.

[AerialPerspective]

haha I hope you’re joking. You do realize that virgin Australia is smaller than most regionals in the USA? Any US carrier would have zero interested in a failing business.

Well, yes. It was largely tongue-in-cheek... but DL if they ever were interested could certainly do better than the mishmash of airline owners faffing about that have had not far off a decade to sort it out.

[AerialPerspective]

Colonel Klink is right on. Couple more points, lot of disparagement in these posts and some who clearly don't fly on VA. (I am VA and QF plat). The VA Business class exceeds QF every time in catering. Flew QF business yesterday Cairns-Sydney; one white, one red wine. That's a choice? No salad. Seeded sourdough or seeded sourdough. Fly VA business often interstate and USA & HK. VA can't be beaten in J. I suspect international will go as well as Tiger, since the results show a decent profit on domestic and 7% revenue growth. Get rid of the stuff that doesn't work, and possibly even ditch the Virgin branding as this costs millions each year too.

But Qantas makes a profit and Virgin doesn't. Obviously Virgin is spending too much on it's product up the front. An out of this world product is great, like AN International, but don't get used to it because it won't be around long if it's not sustainable... well, in Virgin it seems it will because it just goes on and on and on regardless of profit and keeps paying it's CEO bonuses on and on and on for crappy performance. I feel very sorry for the people who may lose their jobs, it is tragic and most of us have been through it... what's really terrible here is that it's become an airline run by people with not much competence at running an airline because despite the good product, the company is generally incompetent... can't get EBAs signed for years, can't negotiate, tosses people out who know what they're doing and replaces them with sycophants who use all the right management-speak words in every meeting... too much duplication, too much taking a simple process and putting sixteen steps in it, 3 spreadsheets to be updated, cobbled together joke IT solutions (a friend flew with them a while ago and said they checked in at the kiosk then got to the gate and weren't checked in... heard this from a few people although it hasn't happened to me)... these are very basic things that add complexity and layers that aren't necessary.

[AerialPerspective]

I'm not sure that's quite right. Qantas invested heavily in setting up Jetstar to 'pincer' Virgin Blue with an even lower cost product, leaving Qantas itself free to specialise as a full service carrier. JB's move to the current VA model was a response to the fact that VB was caught in the middle, and not winning.

The alternative wouldn't have been to leave VB as it was - it would have been to strip it back to a ULCC model, and JB's view at the time was that there wasn't space in Australia for two, full-size LCCs, and that they stood a better chance of taking corporate marketshare from Qantas.

That's not a defence of JB - I think he lost sight of the need for cost control - but I do think he was right that there wasn't space for multiple LCCs. SQ learnt that with Tiger (and then JB bought it...), and NZ seem to realise this - hence their complete disinterest in entering the domestic market (well, that and having been burnt by Ansett).

Sorry, but that's wrong. Jetstar was announced in 2003 and started operations in 2004 in May (25th to be exact). Ansett was LONG gone and Qantas had taken on some Ansett leases of 767s to get the capacity to cope with the absence of AN. DJ as they were then, also leased one or two ex AN 737s to take up the slack. Ansett exiting most definitely resulted in DJ's survival as it was rumoured to be weeks or a month or so away from pulling the pin (apparently RB has done this more than a few times with no regard for investors losses)... exit AN, ramp up DJ. Then for years DJ had no idea what it was once JQ started... could not decide whether it was low cost, premium or something in between. They should have gone downmarket, kept the 737s and cheerful image and they would have remained profitable. As it is they are too small to effectively compete with QF... even AN struggled with it's good but anaemic international network.

[AerialPerspective]

It surely doesn't help when they are still paying for leases of E190 aircraft parked in Nashville, USA. How much is that costing them per year?

PLUS ATRs costing leases but taped up against the fence somewhere and to top it off in this "How to Wreck a Business 101" is the fact they're PAYING another operator to fly the routes... even more laughingly, an operator now 20% owned by QF...

[AerialPerspective]

You are right many did see him as the Messiah, personally I listened and gave him the benefit of the doubt as with any new employee. I became concerned when he purchased Skywest as I knew Alliance or Network were the pick of the bunch. I was indeed shouted down and told by one colleague I should leave because I wasn’t singing from the same song sheet.

Regardless, when I met him I treated him with respect and would have had I run into him on his last day. It’s just my opinion that the new CEO would have done a better job had he been afforded the opportunity 9 years ago. Maybe I’m wrong.

I’ve always believed Qf did a better job as they had that economy of scale you mention plus years more experience. I recall paxing one time on a QF 330 in uniform last minute and couldn’t believe how well I was treated, it was incredible they couldn’t do enough for me despite me being the opposition. I also noted how clean, quiet and calm the atmosphere was in the Qf terminals, I was certainly envious as the opposite is true at Virgin.

Anyway, there are a lot of valid comments on here but some are a little gleeful and I think this is concerning. If Virgin collapsed it would no doubt be replaced be a very low condition competitor with serious clout.


This is a very wise and well written comment. I have been known to be critical of VA on most occasions because of the frustration of seeing what could be such a good airline be a winner but which has been mismanaged by a very ego driven CEO who seems (I say 'seems') to have used the time there to get back at QF for not giving him the job... that might seem petty but when you add everything up he's done it did appear that he was trying to create a bigger QF to say "so there"... if correct, hardly a sound basis to run an airline on and I once heard from one person at QF that he was called "mini me" in some QF quarters. I travel more on QF but also use VA at times... thing is the country needs two profitable and well run companies. At the moment it has, sadly, one well run (mostly) and profitable (certainly) company and one basket case. It would be an odds on bet that PS would have done a better job... but then as I've observed before, so would Norman Gunston or Mr Bean.

[The name is Porter]

Aw, I've got a new pet. He's gonna follow me everywhere. How cute.

Yeah, you have, and I will.

You're just so lovable, everything you say is aviation gold.

Now, back to the Instructor thread petal, pick up the pace.

[The Bullwinkle]

https://www.escape.com.au/travel-advice/tigerair-ceo-merren-mcarthurs-top-packing-hacks-tip-1-dont-forget-your-undies/news-story/2f9844e7bf6abd2b2d1570540dfaad6c

MM reveals her best packing tips - looks like she'll have to use them.

Pure Gold!!! :ok:

[coaldemon]

So who is going to be running Tiger if MM is gone? I didn't see any reference to that in the press releases.

[Cool banana]

https://cimg8.ibsrv.net/gimg/pprune.org-vbulletin/2000x1493/0dae6296_1515_4364_9952_b2a21c29376d_e843b6c9f486f86e3bc212b 10f527e4da60472b1.jpeg


Here the CEO trying to broadcast, confidence in the Airline, with an A330 model in the back ground with a missing engine? And then also having huge spotlight highlighting the fact displaying the airline is in disrepair,just like an rudderless ship, an engineless aircraft how symbolic reflects just how poorly managed this airline is, especially from staff within the Virgin Australia headquarters.

First to be shown the door should be the CEO PA and PR department for Blatantly exhibiting such levels of incompetence and a poor corporate image.

[The Bullwinkle]

Here the CEO trying to broadcast, confidence in the Airline, with an A330 model in the back ground with a missing engine? And then also having huge spotlight highlighting the fact displaying the airline is in disrepair,just like an rudderless ship, an engineless aircraft how symbolic reflects just how poorly managed this airline is, especially from staff within the Virgin Australia headquarters.

First to be shown the door should be the CEO PA and PR department for Blatantly exhibiting such levels of incompetence and a poor corporate image.


No, you’ve got it all wrong. It’s the accountants idea to save fuel and running costs.
Instantly achieving a 50% productivity improvement!

[RodH]

This all sounds a bit strange to me.
How is it that QF can make such a good profit and VA such a huge loss when one considers that both have about the same load factors , terminal costs, fleet costs etc. etc.( in proportion of course.)
Is it some very clever accounting methods used by QF?
One should remember this;
Qantas shocks with $2.8bn full-year loss, analysts call for management spill
By business reporter Michael Janda (https://www.abc.net.au/news/michael-janda/166854)
Updated 28 Aug 2014, 2:56pm
RELATED STORY: As it happened: Qantas posts record $2.84 billion loss (https://www.abc.net.au/news/2014-08-28/live-blog-qantas-announces-full-year-profit-results/5702174)
Qantas has shocked everyone with a record $2.84 billion headline loss, around three times as bad as expected.
It is a vicious negative turn from last financial year's wafer-thin $1 million profit.

And then the very next year it s this:
Qantas’ underlying profit before tax of $975 million was a turnaround of $1.6 billion compared with 2013/2014 – including the best second half performance in our history. I’m incredibly proud of our people, who have driven the Qantas Transformation program forward with passion, skill and determination. Without their hard work this outstanding result would not have been possible.
This massive turnaround strikes me as being a very clever bit of accounting !!
Some critics have said that VA have paid their Executives huge salaries and this makes a difference but what about the colossal salaries paid by QF to their top brass?, doesn't seem to have hurt their profit margins at all!!

There does not seems to be much logic in this huge difference between the profits/ losses between the two Airlines .
Sure there are inefficiencies in VA but surely not that much to make such a big difference.
Puzzling methinks ???


I would like to think a fair bit of this difference and VA's huge loss is a factor of Accounting to some degree.
It seems a bit like it to me.
One can only hope that VA does turn things around as I have found their product to be so much better than Qf.
It would be a shame to see VA slip back to a budget Airline and let QF have the cream of the travelling public to themselves.
We would not have the same high quality of service if there is no real competition.

[wheels_down]

There does not seems to be much logic in this huge difference between the profits/ losses between the two Airlines .
Sure there are inefficiencies in VA but surely not that much to make such a big difference.
Puzzling methinks ???
There is a big difference. Qantas ‘Group’ has double the aircraft as Virgin. Revenue is times 4. As is passengers. They have a loco as big as Virgin domestic itself. There is a half a billion dollar frequent flyer program. Has long term business contracts signed. Will always have the corporate edge due to International network.

The Virgin Domestic fleet has an EBITA of $400-$500m, these numbers are evident back in the early Virgin Blue days, which in return didn’t have all the extra baggage and reported global record profit margins. This is then eroded away to nothing by VA International, Tiger ongoing writedowns and poor fuel management.

A lot of cash on the domestic front once they wipe away the cost base.

[RodH]

There is a big difference. Qantas ‘Group’ has double the aircraft as Virgin. Revenue is times 4. As is passengers. They have a loco as big as Virgin domestic itself. There is a half a billion dollar frequent flyer program. Has long term business contracts signed. Will always have the corporate edge due to International network.

The Virgin Domestic fleet has an EBITA of $400-$500m, these numbers are evident back in the early Virgin Blue days, which in return didn’t have all the extra baggage and reported global record profit margins. This is then eroded away to nothing by VA International, Tiger ongoing writedowns and poor fuel management.

A lot of cash on the domestic front once they wipe away the cost base.
Sure QF has double the fleet etc. but as I said " ( in proportion of course.)
This is what puzzles me is the difference in revenue profit/ loss given the proportional size of the fleets etc.
Also Doesn't explain the unbelievable $1.6 billion QF magical turnaround in revenue / profit in 2015.

[LostWanderer]

Anyways like many TT pilots, exit strategy is well underway before the carpet is pulled out. I would advise your mate to do the same or stay in the most profitable/safe part of the group.

Not a TT/VA pilot but the couple of mates I have that were hired directly into TT are not feeling very confident about their future prospects at all right now. Already looking and applying elsewhere for what they feel is going to be an inevitable wind up of the operation before talk of redundancies start to heat up.
More senior VA guys who transferred in are hoping (possibly maybe) back to VA...others...not so lucky is what they are thinking. Hoping this worst case doesn't actually eventuate.

[-41]

If VA were to wind up the Tiger operation, what would happen to the VA pilots that have transferred over Tiger operation? Would they be able to transfer back to VA or would the be given redundancies like the rest of the TT crew?

Seriously asking for a mate.


from fair work. NB EA
80.10 To avoid doubt, a Pilot covered by this Agreement cannot be required to give up their position or base because of redundancies affecting a Virgin Australia Pilot group under another enterprise agreement (for example, in the Australian Wide Body Aircraft Operations or New Zealand based operations). A Pilot covered by this Agreement can only be made redundant if a position covered by this Agreement is made redundant.

[Buster Hyman]

I think I previously alluded to the fact that the TT EBA was just to keep them quiet while all this was going on in the background. "Gives us a dig at JQ & it won't cost too much in the long run as TT will go."

Sadly, there are some good crew (TC) there & I hope they get through this.

[davidclarke]

from fair work. NB EA
80.10 To avoid doubt, a Pilot covered by this Agreement cannot be required to give up their position or base because of redundancies affecting a Virgin Australia Pilot group under another enterprise agreement (for example, in the Australian Wide Body Aircraft Operations or New Zealand based operations). A Pilot covered by this Agreement can only be made redundant if a position covered by this Agreement is made redundant.

However pilots that transfer from VA to TT are covered by the TT agreement. Therefore if TT were to wind up it wouldn’t matter where they are on the list as their position is being made redundant? Correct?

[ANCDU]

I’m thinking that Tiger will be rebranded more than just folded up. That’s a big piece of the pie they are handing back to Jetstar if they fold it. More like a rebranding into a new Virgin Group aimed at where VB was originally positioned, with an integration for Tiger Pilots. This is a time for the unions to really stand up.

With the economy beginning to slow down I think it’s a good time for all pilots to take stock of where they are because the music is about to stop and I hope you get a comfy seat, because you are going to be in it for a while.

[LostWanderer]

definitely not, just curious to see the financial reporting showing 777 makes a profit or loss.


I noted in one of the many articles written now - I forget which one - that the US flying is very much under scrutiny for potential cancellation or winding back. With all media airline reporting who knows what the truth is...but it gave the impression that it may not be sticking around under the new route structure. How many pilots are employed on the 777 operation?

[-41]

However pilots that transfer from VA to TT are covered by the TT agreement. Therefore if TT were to wind up it wouldn’t matter where they are on the list as their position is being made redundant? Correct?

if there are no open positions anywhere in the VA group yes. How’s your crystal ball ? If any other loss making fleet is scaled back, plus domestic contraction there won’t be many spots left on the domestic list.

Has there been any public announcements with intention to dissolve TT ?
Using Virgin logic Loses of 45mil per year with only 13 aircraft can’t be too bad, the Ejets and Atrs lost more stationary in foreign countries.

[PoppaJo]

Cancel the cadet scheme!

[Buster Hyman]

Has there been any public announcements with intention to dissolve TT ?No, but the process of amalgamating it with VARA had started last year.

[The Bullwinkle]

https://centreforaviation.com/news/virgin-australia-acting-cco-and-tigerair-australia-ceo-agreed-to-lead-until-new-group-structure-933616

So has she left the building, or is she still haunting the place?

[PoppaJo]

She worked alongside PS at Q Rail for 3 years so they are not unknown to each other, its probably more a case of her aspiration for a gig in the mothership not the failing loco. She lost out for his job and now the reporting directors of Virgin. She was accountable for the $11m Pilot fallout and the worst OTP of any carrier in the history of reporting. Any outside candidate will have edge over this ugly baggage. Quite simply she is responsible for a large chunk of the $2billion lost on the last decade, more than a quarter of it.

Perfect fit over at QF I think.

[Arthur D]

VA has become AN MKIII.

AN could not make money whilst QF kicked ass.

Over a short period of time, VA has managed to take an LCC and bring costs to a level equivalent to a legacy carrier. An astounding feat, by any measure. Whilst ultimately management own this problem, it is employees who will suffer the consequences. Why is it that employees at DJ and VA continued to demand superior T’s and C’s, despite their employers increasingly parlous financial position? The most recent example of this being TT pilots, whose most recent EA has them at a higher cost than Jetstar pilots......... How is this possible when their airline is haemorrhaging financially? How can any employee not see that this type of behaviour ultimately kills the golden goose.

All it would take now would be for a well funded third airline to enter the market and VA would be done, 2001 all over again.....

[AerialPerspective]

VA has become AN MKIII.

AN could not make money whilst QF kicked ass.

Over a short period of time, VA has managed to take an LCC and bring costs to a level equivalent to a legacy carrier. An astounding feat, by any measure. Whilst ultimately management own this problem, it is employees who will suffer the consequences. Why is it that employees at DJ and VA continued to demand superior T’s and C’s, despite their employers increasingly parlous financial position? The most recent example of this being TT pilots, whose most recent EA has them at a higher cost than Jetstar pilots......... How is this possible when their airline is haemorrhaging financially? How can any employee not see that this type of behaviour ultimately kills the golden goose.

All it would take now would be for a well funded third airline to enter the market and VA would be done, 2001 all over again.....



Don't forget one of the ground EAs took forever to 'negotiate' but then was concluded quickly... (probably due to JWIN syndrome)... and it was supposed to reduce costs but added to them for no productivity benefit whatsoever... I assume others were similar... so what we have is a company with a) people making decisions with no real ability in airline operations; b) spending spree of airlines that fleets were then mothballed; c) said fleets' previous flying contracted out to a competitor; d) anyone with expertise who tells it how it is rather than the 'everything's brilliant' they want to hear being shoved out; e) inability to to negotiate roughly equal to the old wet paper bag analogy; and f) inability to get an aircraft they already operate onto a subsidiary AOC after two goes along with Bali, etc... more like Pan Am MKII or TWA MKII... no, sorry, I take that back... they were airlines... not sure what this is...

[AerialPerspective]

https://cimg8.ibsrv.net/gimg/pprune.org-vbulletin/2000x1493/0dae6296_1515_4364_9952_b2a21c29376d_e843b6c9f486f86e3bc212b 10f527e4da60472b1.jpeg


Here the CEO trying to broadcast, confidence in the Airline, with an A330 model in the back ground with a missing engine? And then also having huge spotlight highlighting the fact displaying the airline is in disrepair,just like an rudderless ship, an engineless aircraft how symbolic reflects just how poorly managed this airline is, especially from staff within the Virgin Australia headquarters.

First to be shown the door should be the CEO PA and PR department for Blatantly exhibiting such levels of incompetence and a poor corporate image.

Oh my goodness... you simply could NOT write this stuff... this is like the last multimillion dollar AN advertising campaign before the collapse (which the advertiser never got paid for... $20M or so...) featuring a song that included the line "I hope I die before I get old"... it's not quite in VW gassing monkey's territory but Jesus Wept...

[Berealgetreal]

How is this possible when their airline is haemorrhaging financially? How can any employee not see that this type of behaviour ultimately kills the golden goose.

All it would take now would be for a well funded third airline to enter the market and VA would be done, 2001 all over again.....



I guess they followed the “leader”.

[Berealgetreal]

Anyone voluntarily going to TT from their position in VA should have their head checked.

Just thought I’d add some context to those wondering why someone would go to VA to TT.

I can’t speak for all but there are a group of pilots that joined VB/A from about 2009-2012ish who haven’t had the career progression they expected. They joined VB/A and paid the 30k for the endorsement. Shortly after followed integration, purchase of Skywest, Tiger use of Alliance amongst a million other calculated manoeuvres by the Company to move flying away from VA metal to reduce costs (cheaper to hire Alliance than pay the lease costs for another B737). Obviously they did really need to reduce costs as the outgoings were/are no doubt very high.

Integration with Tiger came after GH handed Bali to TT as it was a “leisure” destination. A similar rationale was used regarding Skywest only doing mining work.

I’ll translate Bali “leisure”. After a few sherbets at the TT Bali party, a certain TT manager pointed out to a VA pilot that VA pilots aren’t flexible enough in that their EBA doesn’t allow a domestic sector after a redeye. In the end Indonesian government wasn’t worried about the second sector after the red eye and the rest is history.

Anyway I digress, the aforementioned pilots (09-12) have realised that if they want to progress their career at all, transferring to Tiger rather than jumping up and down on the spot will be their only means.

Ironically, all the scheming and planning to move flying away from VB/A metal in nearly all cases has proved to be extremely expensive. One of the big problems has also been hiring people that see VA B737 flight crew costs and at one stage passenger meals as their main means to reduce costs (economy of scale). Some of them enjoyed subtlety poking the bear (VA B737 pilot group). This has turned a previously flexible, happy group into a jaded, cynical, angry and inflexible mob. I’ve watched it happen first hand. The saddest thing is some of these pilots are so angry that even when someone (SA or PS) is genuinely trying to do the right thing by them (return morale) they haven’t the ability to see it for what it is, thinking rather that it’s some twisted plan to shaft them and their families. They battle on day by day with hate which in the end is unhealthy for all parties.

I hope the new chief can turn it around. Plenty of top people work at VA group from head office to the cockpit. You won’t meet a better bunch of people I swear. No doubt some tough times ahead.

On a side note, despite all of the above facts most of the aforementioned VA pilots still welcomed Tiger pilots when they were recently training on VA metal. The same would happen for VARA crew. There are high levels of professionalism on display of you look beyond the bar talk.

[TBM-Legend]

All it would take now would be for a well funded third airline to enter the market and VA would be done, 2001 all over again.....


the biggest challenge would be securing terminal space and gates. All the mainline ports are short of space now thanks to that monopoly...

[PPRuNeUser0198]

It's not all doom and gloom for Virgin. While its domestic EBIT has almost halved, largely because of the 2nd half of FY19 which saw an EBIT loss of A$43.3m, it is still trending in the right direction and it is still positive over the full year.

The big problem with the VA results was international EBIT, which was a loss of A$75.6m over FY19. Over the past 9 years, international EBIT has been positive on just 3 occasions, which compares to 6 for domestic. If we look at the FY19 loss at the PBT line, which was A$295.3m, over half of this was due to impairment losses on cash-generating units. You often see new CEOs declare these impairment losses in their first year as a one-off, leaving a cleaner slate for the following year. They usually come about because the written down value of aircraft assets on the balance sheet don't align with the market value of those assets with the difference requiring a write-off. Qantas did exactly the same thing in FY14 with a A$2.56b impairment.

The fuel cost per ASK outcomes are an interesting comparison between QF and VA. Virgin's fuel cost per ASK has increased by around 0.80 cents over the past 2 years while QF's has increased by just 0.50 cents. That is a big difference, perhaps reflecting different approaches to fuel and FX hedging.

[Berealgetreal]

No matter how you twist it QF know boats when it comes to hedging fuel.

As for International it’s easy to sit in a money machine 737 between ML and SY and say “just cut it” whilst imagining more fortunate senior colleagues having a heart attack the moment they get the email (twisted but true). Reality is a lot of business connections and on carriage depend on it. Cutting it would have some impact on domestic.

Often loss making parts of the business can be covered by the domestic operation, flyer scheme/catering or other ventures like at QF. Unfortunately, in either total desperation or incredible naivety a portion of Velocity was sold off to Afinity Partners. Velocity is truely the Golden Goose.

I think previous CEO’s might have had the horse or ego before the cart when it came to 777/330. Would have been better to have built upon the VB 737’s and at the right moment (B787 announcement) paid a fraction for one of these new generation widebodies (Airbus or Boeing). I’d say the way forward would have been 737-900 with layflat business and double the frequency on the transcon. Interestingly enough that’s what the Max 10 will be no doubt doing. The question will be if the travelling public will trust it? Finally did the new CEO strike a massive discount for B787’s in the renegotiation a few months back? Hope so.

[Arthur D]

Too high a cost base
costs rising faster than yield
declining market share
no cash
weak / split board
questionable ownership / shareholders
Strong and growing competitor
further pull back on routes
regional ‘experimentation’
Loss making international
new inexperienced airline ceo
new inexperienced exec team (or worse)

sound familiar??

too many similarities

VA is AN MkIII

[-41]

The numbers don’t look so great, ultimately Virgin will have to drop international to save it’s core.

The loss of on carriage flow / business accounts to domestic may be outweighed by the entire group going bust. There’s no investor riding in with deep pockets now. Tough times ahead

[Mr Google Head]

no cash


Apart from the $1.74B listed in the annual financials....?

[PlasticFantastic]

Apart from the $1.74B listed in the annual financials....?
But, it has about $1b in bonds coming due in the near future.

[PPRuNeUser0198]

Virgin did generate positive free cash of A$53.9m and has increased its cash balance to A$1.7b. Also appreciate that non-cash statuatory numbers have no impact on their business. We will see what their Better Business II program can generate in additonal free cash.

But, it has about $1b in bonds coming due in the near future.

You can refinance bonds either prior to, or at maturity. Virgin can meet its debt repayments.

What is worrying is that at the EBITDA level - VAI and TT are negative. This means they are loss making at the operating level, which isn't good. Without equity or debt financing - you're bankrupt. Virgin's overallEBITDA sits around 6-7%, which isn't great, and below their peer in Qantas.

What I did like seeking is with capacity growth, so too did rASK and yield for VAD and VAI. That's good. VAI marginally, but considering the large capacity growth, it is still impressive.

TT also saw yield and rASK growth - but that is likely the result of the reduction in capacity and not a good revenue / cost management strategy.

[Mr Google Head]

But, it has about $1b in bonds coming due in the near future.

they wont be able to refinance? People will stop buying tickets? Please. Some of the scaremongering here is a bit over the top.

[machtuk]

Too high a cost base
costs rising faster than yield
declining market share
no cash
weak / split board
questionable ownership / shareholders
Strong and growing competitor
further pull back on routes
regional ‘experimentation’
Loss making international
new inexperienced airline ceo
new inexperienced exec team (or worse)

sound familiar??

too many similarities

VA is AN MkIII


Sadly I have to agree, won't be long b4 there is a MAJOR shift in Australian aviation, it's only a matter of time!

[Lookleft]

What is the major shift in aviation to?

[Arthur D]

Apart from the $1.74B listed in the annual financials....?

I remember Gary Toomey crowing he had $1 Billion in cash..... and then it became $2 Billion ....... and then it became nothing.

As a public company, they can’t simply burn through shareholders cash in the vain hope of the weather changing......

[PPRuNeUser0198]

Aurthur - Virgin is cash flow positive. They're not burning through any cash stores. They don't need to. Depending on what they do for the bond that is maturing - they may either refinance it or use cash to fund it, but either way - the busines is generating free cash. They just need to increase that substantially.

[Icarus2001]

the busines is generating free cash. Yes but not a profit.

To put it another way they lost nearly $900,000 every day last financial year.

[-41]

Stop trying to confuse me with logic.

[Arthur D]

Aurthur - Virgin is cash flow positive. They're not burning through any cash stores. They don't need to. Depending on what they do for the bond that is maturing - they may either refinance it or use cash to fund it, but either way - the busines is generating free cash. They just need to increase that substantially.

T - airline businesses are very good cash cows. Nothing surprising there. Profitability on the other hand......

Lenders don’t lend, lessors don’t lease and shareholders don’t invest on free cash flow. With $1.9 Billion in sustained losses, VA is a poor story.

Ansett actually produced a profit in the last few years, more than I can say for VA

[Mr Google Head]

T - airline businesses are very good cash cows. Nothing surprising there. Profitability on the other hand......

Lenders don’t lend, lessors don’t lease and shareholders don’t invest on free cash flow. With $1.9 Billion in sustained losses, VA is a poor story.

Ansett actually produced a profit in the last few years, more than I can say for VA



why haven’t virgin just closed up then if Ansett made a profit before they collapsed? On the logic being put forward here? Surely a company not profiting can’t continue??? (This is sarcasm for anyone playing at home)

Companies don’t shut up shop when they’re not ‘profiting’ as murky as that word is these days.

they close up when they can’t pay the interest and wages and costs. With 1.74B cash and 6B revenue people think a loan extension is going to be the death of the company. Lol

[AerialPerspective]

why haven’t virgin just closed up then if Ansett made a profit before they collapsed? On the logic being put forward here? Surely a company not profiting can’t continue??? (This is sarcasm for anyone playing at home)

Companies don’t shut up shop when they’re not ‘profiting’ as murky as that word is these days.

they close up when they can’t pay the interest and wages and costs. With 1.74B cash and 6B revenue people think a loan extension is going to be the death of the company. Lol

Um. A little event called "9/11" which pushed them over the edge...

[AerialPerspective]

https://cimg8.ibsrv.net/gimg/pprune.org-vbulletin/2000x1493/0dae6296_1515_4364_9952_b2a21c29376d_e843b6c9f486f86e3bc212b 10f527e4da60472b1.jpeg


Here the CEO trying to broadcast, confidence in the Airline, with an A330 model in the back ground with a missing engine? And then also having huge spotlight highlighting the fact displaying the airline is in disrepair,just like an rudderless ship, an engineless aircraft how symbolic reflects just how poorly managed this airline is, especially from staff within the Virgin Australia headquarters.

First to be shown the door should be the CEO PA and PR department for Blatantly exhibiting such levels of incompetence and a poor corporate image.
It would only have been funnier if there was a model of an Alliance F100 in the background (or a QF 787)...

[Kittykat2704]

Every six months another rubbish forum pops up full of “experts” claiming the doom and gloom, and the certainty of demise within months ��.

They won’t pull out of the Tasman or pacific. Downsizing is required on Borghettis ridiculous extra capacity and routes put in post nz break up. Pulling out of the international market completely, will have flow on effects to the domestic model, giving even more of a monopoly to the competition, and when the business returns to profitability will limit it as they would be muscled out of the Tasman/pacific. Being east coast based but talking to colleagues that work within the VANZ contingent, load factors have steadily increased on all routes and a strategical frequency plan, particularly on the Sydney flights would see consistently adequate loads.

Theres still plenty of positives for the guys and gals at virgin. Here’s to looking forward to the next expert forum.

[The Bullwinkle]

Theres still plenty of positives for the guys and gals at virgin.That’s just the point.
Everybody at the “coal face” is actually starting to feel a bit more positive about the long term survival of Virgin after this recent announcement.

[PPRuNeUser0198]

T - airline businesses are very good cash cows. Nothing surprising there. Profitability on the other hand......

Lenders don’t lend, lessors don’t lease and shareholders don’t invest on free cash flow. With $1.9 Billion in sustained losses, VA is a poor story.

Actually Arthur - FCF is a very useful measure of a companies true profitability and is used by investors. It is hard to manipulate and tells a better story. It is about the 'here and now' versus the P+L which smoothes out cash over time and excludes non-cash expenses. And because it accounts for changes in working capital, it can provide insights into the value of the business and the health of its fundamental trends. It is a better metric to determine the short-term and long-term outlook of the business. Of course - it isn't perfect in every sense, and there are many other measures to consider like ROA, ROE, ROS, GPM, EBIT Margin etc.

What it does not show is the potential future costs and for poor prior decisions i.e. non-cash expense.

But I come back to your original post where my response was specifically targeted towards, and that is VA is not burning through cash. They have free cash remaining to do anything they like with e.g. share buyback, dividends, pay down debt, reinvest into product etc.

I don't have the documents to view, but I can't see that Ansett would have been cash flow positive otherwise it would have been able to continue trading. I am sure it ran out of cash.

[coaldemon]

Ansett ran out of cash. Once their market share went below 36% they couldn't keep their heads above water. If you look at the cash flows for VA though there was $250 from another debt raising and some asset sales. Problem with not being profitable is that the financial institutions such as banks, Investors and leasing companies require a higher risk premium. The more you borrow the more it costs. So if VA did indeed try to order 787's then the lease factor required by any of the main leasing companies would be above .75 I suspect replacing expensive leased A330's with more expensive B787's. Time will tell.

[Arthur D]

T- I can Google FCF as well.

Your straw man argument suggesting that all is good at VA because they have free cash is a distraction.

AN tried this argument too, as they say, money talks, BS walks.

To suggest their situation is anything short of parlous is at best wishful thinking. This is a business that has chewed nearly $2 Billion dollars of investors money without producing a return. It has brutally punished those poor shareholders who bought into the IPO.

This, in a market where their competitor just posted nearly $1 billion in profit from their domestic business alone! This off the back of consistent year on year profits. On a market share basis, VA’s share of the profits pie should have been at least a $300m PROFIT. Where is it? Clearly the issue is not the market.

To paraphrase Rod Eddington - it might be a great airline, but its a poor business. Problem is, unlike AN, this is not even a great airline.

But hey, you might be right, all of this will rapidly change, the new CEO will discover what clearly eluded previous management, the board and long suffering shareholders and voila....... profit.

[-41]

Reuters Jamie Freed, suggests otherwise

“Virgin has had negative free cash flow for the last 11 financial years, according to Refinitiv data, which has led it to rely heavily on funding from equity, debt and asset sales. It has a non-investment grade credit rating because of its high debt levels.”

surely a non investment grade credit rating will bring problems refinancing.

How long will the cash reserve last with a crisis that slows revenue, it’s not “doom and gloom” to proof the business to survive a crisis.

An expert named Herb Kelleher said you get two crisis’s per decade, that sort of “negativity” (or sky is falling mentality) helped southwest thru 11th Sept 2001 attacks. The “think small” model, works as evidenced with Southwests 46th consecutive year in profit.

[Berealgetreal]

I think unless you work in Finance it’s pretty hard to understand what the figures really mean. Certainly, anyone can see QF is in a much stronger position, they own everything and have lots of profitable ancillary businesses. QF vs VA group isn’t even a comparison. The only bit you could compare, as they look similar (I think), is the B737 operation.

My contacts say that over the past few years debt has been getting paid down. Again, I’m no expert. There was a lot of expense associated with the transformation of VB to VA and they would have had to borrow significantly to do this.

The group is obviously still finding its feet after 10 years of significant change. Obviously the likes of TT are inefficient at the moment as they’re half way between a paused fleet transition.

I think the new CEO is moving in the right direction. If it was an emergency the A330 would have been cut on the spot. Obviously he feels they can manoeuvre the company into a position without cutting a fleet, losing slots and cutting pilots.

I would have thought recent announcements would indicate he’s clearly get the priorities in order.

[coaldemon]

If they cut the A330 it would be a cost of $350 Million USD roughly looking at the time to run on the leases.

[Blueskymine]

It’d be interesting if someone got on the phone and offered the entire 777 fleet (and pilots during the establishment phase, and then seniority where it took them) to Qantas. They’d be able to cull the 747 operation early and use the VA 777s to get the sunrise operation up and running.

The 777s would also be ideal for Haneda and Joberg.

[Buster Hyman]

On a side note, despite all of the above facts most of the aforementioned VA pilots still welcomed Tiger pilots when they were recently training on VA metal. The same would happen for VARA crew. There are high levels of professionalism on display of you look beyond the bar talk.What a shame it wasn't the case within TT where the CA's converting to the 737 were being treated like dirt by some of the FO's!

[Berealgetreal]

Couple of “special” people we know of indeed. Bound to find that anywhere particularly in a big group.

Overall the guys are good and certainly there’s no us and them attitude in the flight deck. From what is see/hear over in the QF group there’s no comparison.

[AerialPerspective]

T- I can Google FCF as well.

Your straw man argument suggesting that all is good at VA because they have free cash is a distraction.

AN tried this argument too, as they say, money talks, BS walks.

To suggest their situation is anything short of parlous is at best wishful thinking. This is a business that has chewed nearly $2 Billion dollars of investors money without producing a return. It has brutally punished those poor shareholders who bought into the IPO.

This, in a market where their competitor just posted nearly $1 billion in profit from their domestic business alone! This off the back of consistent year on year profits. On a market share basis, VA’s share of the profits pie should have been at least a $300m PROFIT. Where is it? Clearly the issue is not the market.

To paraphrase Rod Eddington - it might be a great airline, but its a poor business. Problem is, unlike AN, this is not even a great airline.

But hey, you might be right, all of this will rapidly change, the new CEO will discover what clearly eluded previous management, the board and long suffering shareholders and voila....... profit.


Agree... this 'free cash flow' is just crap... it might be a positive sign for the airline... but at the end of the day, outgoings exceed incomings and that's not a 'negative result', it's not 'sub-optimal', it's not 'showing signs' of anything, it's a DAMN LOSS... another one making 7 in a row. I am worried about the many good people who work for this outfit who have been subject to continual losses and a cloud while the management kept talking about 'free cash flow' and 'net positives' and all the rest of the crap. They. Don't. Make. A. Profit. End of story. But it's worse than Ansett in one way... where would they be if the owners hadn't poured in so much cash. Bankrupt, that appears where.

[AerialPerspective]

It’d be interesting if someone got on the phone and offered the entire 777 fleet (and pilots during the establishment phase, and then seniority where it took them) to Qantas. They’d be able to cull the 747 operation early and use the VA 777s to get the sunrise operation up and running.

The 777s would also be ideal for Haneda and Joberg.

Except QF would have to modify them. QF would never have bought the 777 without a wide cargo door to take pallet based units. Another example of lack of guile in many of DJ/VA's decisions.

[Lookleft]

It’d be interesting if someone got on the phone and offered the entire 777 fleet (and pilots during the establishment phase, and then seniority where it took them) to Qantas. They’d be able to cull the 747 operation early and use the VA 777s to get the sunrise operation up and running. The 777s would also be ideal for Haneda and Joberg.

How much de javu is going on with this situation! Ansett was offered to QF for a dollar but Geoff Dixon didn't want a bar of it.

[morno]

It’d be interesting if someone got on the phone and offered the entire 777 fleet (and pilots during the establishment phase, and then seniority where it took them) to Qantas. They’d be able to cull the 747 operation early and use the VA 777s to get the sunrise operation up and running.

The 777s would also be ideal for Haneda and Joberg.

I doubt it. You think those 777’s would be able to fly those distances? I think you’re dreaming

[Snakecharma]

Ah, Morno, you do know how far the 777 can go don’t you? And know it went to J’Burg for years, and Haneda is just up the road?

[morno]

Ah, Morno, you do know how far the 777 can go don’t you? And know it went to J’Burg for years, and Haneda is just up the road?

I’m referring to the comment that they could kick off Sunrise with them. If the older 777’s can do those distances, why are QF waiting for Boeing (discounting Airbus at the moment) to get the 777X to do those distances?

[Rated De]

I’m referring to the comment that they could kick off Sunrise with them. If the older 777’s can do those distances, why are QF waiting for Boeing (discounting Airbus at the moment) to get the 777X to do those distances?

Share buy backs provide a far better return...for appropriately "incentivised" insiders.

[pinkpanther1]

On a side note, could someone explain the reasoning behind parking the ATR fleet and then getting Alliance to operate the flying? I understand the ATR leases were overly expensive, but surely its better to fly the aircraft rather than pay the lease while it's backed against a fence and simultaneously pay Alliance for their services.....??

[hoss]

They are unable to crew them, no takers! You can’t blame the new guys, knowing you could be stuck on the fleet for a long time. They will only allow 10% of the ATR pilots to transition to B737 per year. It was MD’s answer to stabilise the fleet. I think it may have backfired.

[VH-FTS]

They are unable to crew them, no takers! You can’t blame the new guys, knowing you could be stuck on the fleet for a long time. They will only allow 10% of the ATR pilots to transition to B737 per year. It was MD’s answer to stabilise the fleet. I think it may have backfired.

They offloaded the ATR flying to Alliance well before there was a crew shortage. Uncertainty about the fleet’s future kicked off the initial exodus from the ATR.

[Blueskymine]

I’m referring to the comment that they could kick off Sunrise with them. If the older 777’s can do those distances, why are QF waiting for Boeing (discounting Airbus at the moment) to get the 777X to do those distances?

I’m saying kick off sunrise with ex VA 777s as a way of getting the fleet established. Sims, crews, it (the 777) flying and then start introducing the new toys to the longer routes.

Right now the 787 is too small for Santiago, hasn’t got the etops for joburg (and is too small) and the Japanese don’t want the A380 in Haneda,

[Snakecharma]

Morno, reduce the pax load and the 777 will do east coast oz to New York or to London ok.

it will do it at 28-35000 ft but it will do it!

the pax load would be a fair bit lower than now and no freight, but it would be a way to dip the toe into the market I guess.

the A330-200 can and has done Europe to Melbourne direct, and can do it with about 35-40 punters. Obviously not enough to make a quid.

[Troo believer]

It’d be interesting if someone got on the phone and offered the entire 777 fleet (and pilots during the establishment phase, and then seniority where it took them) to Qantas. They’d be able to cull the 747 operation early and use the VA 777s to get the sunrise operation up and running.

The 777s would also be ideal for Haneda and Joberg.
That’s the most ridiculous proposition I’ve ever heard. It would never happen I’m afraid. Wishful thinking on a grand scale.

[Berealgetreal]

Industrial unrest and disengagement on even a grander scale..

[Blueskymine]

Industrial unrest and disengagement on even a grander scale..

Redundancy or a job. That’d be what it would boil down to.

VA will probably offload their Longhaul jets. It’s just a question of when.

Qantas is expanding in that space. With probably/possibly the equipment VA are using.

Qantas has done this in the past. Ansett 767 Pilots worked in previous rank for a period in the Qantas uniform. They then had to apply for their jobs and join the company on the bottom of the list. I’d imagine with a 2-3 year contract for the EIS phase, and number on the bottom of the list, once they lost their 777 seat, they’d still find suitable seats with a reasonable income elsewhere in the fleet. Year 3 pay as an A380 SO would probably pay the same as a VA 777 FO. (With overtime). A QF 737 FO would be close if you’re working and chasing hours.

At the end end of the day, if QF got the whole shebang cheap, it’d be a great way to kick it off. And help out a mate. If it were done sensibly, I’m sure the crews and unions would support it too.

[Bleve]

Qantas is expanding in that space. With probably/possibly the equipment VA are using.

Qantas' Project Sunrise is about flying SYD-LHR and SYD-JFK direct (ie non-stop for about 20 hours). Are you sure VA's B777's can do that with a viable commercial load? If so why are QF going through the process of getting Airbus and Boeing to offer proposals on how to do it?

[Harbour Dweller]

Year 3 pay as an A380 SO would probably pay the same as a VA 777 FO. (With overtime).

Maybe not when you consider there are a large number of VAA B777 FO's being remunerated to Captain salaries.

http://vipa.asn.au/wp-content/uploads/2015/09/Virgin-Australia-Long-Haul-International-Pilots-Agreement.pdf
EXISTING FIRST OFFICERS
Clause 54.1 Virgin Australia expects that all 38 existing First Officers will obtain a command position within the Virgin Australia Group by 30 June 2016. If this does not occur, Virgin Australia will pay each of the remaining 38 First Officers at that time the applicable Captain’s rates (starting at the entry level rate). For any relevant First Officers, these payments will be made from the first full pay period after 30 June 2016 until such time as they obtain a command.

[Lookleft]

Qantas has done this in the past. Ansett 767 Pilots worked in previous rank for a period in the Qantas uniform. They then had to apply for their jobs and join the company on the bottom of the list. I’d imagine with a 2-3 year contract for the EIS phase, and number on the bottom of the list, once they lost their 777 seat, they’d still find suitable seats with a reasonable income elsewhere in the fleet. Year 3 pay as an A380 SO would probably pay the same as a VA 777 FO. (With overtime). A QF 737 FO would be close if you’re working and chasing hours.

BSM this was a unique event and it was only because there was a massive vacuum to be filled they also did it on the 737 fleet. QF did not do it out of the goodness of their heart it was done for purely commercial purposes. If they needed to fill a VA shaped hole in the international market then they have plenty of Group pilots and airframes who would do the job. Most Ansett pilots who joined QF were processed in the usual way. The one advantage they were given was that their applications were processed ahead of other applicants.

[KRUSTY 34]

Maybe not when you consider there are a large number of VAA B777 FO's being remunerated to Captain salaries.

http://vipa.asn.au/wp-content/uploads/2015/09/Virgin-Australia-Long-Haul-International-Pilots-Agreement.pdfEXISTING FIRST OFFICERS
Clause 54.1 Virgin Australia expects that all 38 existing First Officers will obtain a command position within the Virgin Australia Group by 30 June 2016. If this does not occur, Virgin Australia will pay each of the remaining 38 First Officers at that time the applicable Captain’s rates (starting at the entry level rate). For any relevant First Officers, these payments will be
made from the first full pay period after 30 June 2016 until such time as they obtain a command.


Crikey! Sweet deal.

[donkey767]

I love reading the comments on this thread. Here’s me thinking everyone on here was a pilot - clearly 90% of you are successful CFO’s who all hold an MBA from Harvard!

[non_state_actor]

Crikey! Sweet deal.

Amazing what you can get when you have leverage in a negotiation.

[Capt Colonial]

Some time ago a few mates over at Virgin told me that the rear cargo door hinders Virgin Australia’s ability to release, sell or lease back their B-777.

Virgin's decision on ordering the aircraft from Boeing was apparently to opt for smaller rear cargo doors which means (or so I am told) that the 777s cannot take standard international freight pallets.

I assume, if true, this makes them less appealing to other Airlines and Aircraft Leasing companies. Maybe not too suitable for what Qantas is looking to achieve in Project Sunrise?

Certainly, freight features as a supplementary form of income to offset weak passenger loads on flights between Australia and International destinations by carrying large cargo.

Is this true and another factor in Virgins current fiscal stress?

[Blueskymine]

Qantas' Project Sunrise is about flying SYD-LHR and SYD-JFK direct (ie non-stop for about 20 hours). Are you sure VA's B777's can do that with a viable commercial load? If so why are QF going through the process of getting Airbus and Boeing to offer proposals on how to do it?

Never said it was for the project sunrise routes. I said it would be ideal to kick off the program. Put it onto existing 747 routes as they go. Gear up for when the long range ones come and establish the crewing with sims, crews etc etc

[Rated De]

I love reading the comments on this thread. Here’s me thinking everyone on here was a pilot - clearly 90% of you are successful CFO’s who all hold an MBA from Harvard!


Putting a great deal of value on cookie cutter post graduate programs is, at least in part responsible for the problems many businesses face.
Some of the best ideas originate from the people who actually do the job, but operationally most employees are hamstrung by "cost leadership" management and over arching HR.

[morno]

Never said it was for the project sunrise routes. I said it would be ideal to kick off the program. Put it onto existing 747 routes as they go. Gear up for when the long range ones come and establish the crewing with sims, crews etc etc

Yeah I think you’re dreaming. I don’t think QF need some ****ty old 777’s with no provision for cargo to go onto some routes that would be very freight heavy I imagine (refer old comments about the amount of freight coming out of, or it might have been into, Jo’Burg). Operationally, I doubt they would gain any benefit out of training crews earlier than they need them. It’s just another aircraft.

[Snakecharma]

just to clarify - the small cargo door is a pain in the arse, BUT the 777 still carries a lot of freight.

[Blueskymine]

Yeah I think you’re dreaming. I don’t think QF need some ****ty old 777’s with no provision for cargo to go onto some routes that would be very freight heavy I imagine (refer old comments about the amount of freight coming out of, or it might have been into, Jo’Burg). Operationally, I doubt they would gain any benefit out of training crews earlier than they need them. It’s just another aircraft.

So I suppose some ****ty old 747s are better then?

The 777 with no freight and the loads that QF fly on those routes would probably be ahead just on fuel burn.

PS They can still carry a shedload of freight without the cargo door

[AerialPerspective]

Some time ago a few mates over at Virgin told me that the rear cargo door hinders Virgin Australia’s ability to release, sell or lease back their B-777.

Virgin's decision on ordering the aircraft from Boeing was apparently to opt for smaller rear cargo doors which means (or so I am told) that the 777s cannot take standard international freight pallets.

I assume, if true, this makes them less appealing to other Airlines and Aircraft Leasing companies. Maybe not too suitable for what Qantas is looking to achieve in Project Sunrise?

Certainly, freight features as a supplementary form of income to offset weak passenger loads on flights between Australia and International destinations by carrying large cargo.

Is this true and another factor in Virgins current fiscal stress?

It is true about the cargo doors... it's inconceivable that an experienced airline, as opposed to one where the decision were mainly made by people with no industry experience back then, would make such a dumb decision. It's almost like specifically ordering a 747 but asking them to put small doors on it. Stupid doesn't begin to explain it but lack of knowledge and/or incompetence does. Goodness knows what they do when they bring in a pallet from PER on an A330 going to LAX... must have to pay additional to have it unloaded and re-stowed in compatible ULDs. Dumb.

[AerialPerspective]

Putting a great deal of value on cookie cutter post graduate programs is, at least in part responsible for the problems many businesses face.
Some of the best ideas originate from the people who actually do the job, but operationally most employees are hamstrung by "cost leadership" management and over arching HR.

This is true, but this is an airline that almost has a culture of ignoring bad news (at least up until now)... like posting a big thing on LinkedIn a few months ago saying "We're going naked!!!"... reading it, it was about bloody lipstick... this is a place where there is more discussion day to day about whether the 3rd Cabin Crew at the back or the 6th check in agent from the left is wearing the correct shade of red lipstick... the expression 'fiddle while Rome burns' comes to mind... if PS is to be successful, he needs to make sure of the 750, most are those who spend their day swanning from one place to another checking lipstick colour and/or wording about the arrangement of flowers at the check in desk and get people who know what the hell they're doing and have the basic ability to prioritise operationally. I always imagine the NZ bail out as being typified by the parrot sketch... "this is a dead parrot"... "No, it's just sleepin' look, it's got positive free cash flow..."

[DUXNUTZ]

Have heard a few 777 and 330 Skippers have left for Asia or are looking. One would think 1 fleet or the other is on the chopping block. Codeshare with Delta across to LA makes sense, but not if they can’t even flog the 777s off because of the cargo doors on a few. Pretty easy to lease 330s, the ex emirates ones not withstanding.

[Mr Google Head]

Pretty easy to lease 330s, the ex emirates ones not withstanding.

If you mean XFA and XFB that virgin leased of Emirates they’ve been gone a long time...

[non_state_actor]

It is true about the cargo doors... it's inconceivable that an experienced airline, as opposed to one where the decision were mainly made by people with no industry experience back then, would make such a dumb decision. It's almost like specifically ordering a 747 but asking them to put small doors on it. Stupid doesn't begin to explain it but lack of knowledge and/or incompetence does. Goodness knows what they do when they bring in a pallet from PER on an A330 going to LAX... must have to pay additional to have it unloaded and re-stowed in compatible ULDs. Dumb.

Yes there is a storied history of being 'penny-wise but pound foolish'. You could write a business book on the number of projects/decisions that were done in the name of saving money that ended up costing a fortune or making the operations inefficient.

I suspect this is going to change under the new management shake-up and restructure.

[coaldemon]

Actually not that easy to lease A330's unless you discount the lease rental down to B737 NG numbers. Similar to what happened to the Emirates A330's in VA. Currently there is a glut of A330's on the secondary market. Most not worth the time to look at.

As for the small doors yes they were chosen so that they could get the paint scheme (which was apparently very expensive). No amount of argument could move the EGM involved they say. 2 of the 5 have the big doors and I think you will find them mostly on LAX-SYD to cover off the freight. The 3 with the small doors will not be worth much when they do get moved on.

[AerialPerspective]

Yes there is a storied history of being 'penny-wise but pound foolish'. You could write a business book on the number of projects/decisions that were done in the name of saving money that ended up costing a fortune or making the operations inefficient.

I suspect this is going to change under the new management shake-up and restructure.

I think you're right about it changing under the new management... but yes, the paying to remove in hold systems from the A320s of a certain local airline (now defunct) comes to mind...

[AerialPerspective]

Actually not that easy to lease A330's unless you discount the lease rental down to B737 NG numbers. Similar to what happened to the Emirates A330's in VA. Currently there is a glut of A330's on the secondary market. Most not worth the time to look at.

As for the small doors yes they were chosen so that they could get the paint scheme (which was apparently very expensive). No amount of argument could move the EGM involved they say. 2 of the 5 have the big doors and I think you will find them mostly on LAX-SYD to cover off the freight. The 3 with the small doors will not be worth much when they do get moved on.

You mean they deleted the doors to save money for a bloody paint job??? Gee... and here I am thinking it was immaturity in aviation when all along it was just... stupidity... you mean that god-awful pearlescent stupid flag image and the red up the tail copied from QF... and what of the paint job now... gone... this truly is the Fawlty Towers of airlines... Gee I'd love to know who the EGM was...

[PoppaJo]

Don’t forget when they launched the 777 the freight operation was essentially non existent across the entire company. They carried probably a tenth of what they carry today. Freight was never in mind when they ordered it.

[B772]

VA are celebrating their 19th birthday today. I wonder if they will reach 21.

[NGsim]

Don’t forget when they launched the 777 the freight operation was essentially non existent across the entire company. They carried probably a tenth of what they carry today. Freight was never in mind when they ordered it.

Essentially the only thing an aircraft can carry (onboard) and earn money on is passengers and/or freight. Are you telling me just because they only had share at the time in 1 of those markets that they acquired aircraft whilst largely ignoring the only other revenue source? Not something I would jump to their defense over.

[Snakecharma]

I think the cargo door thing is being a little over blown.

yes, in an ideal world they should all have the bigger door, but it isn’t the end of the world and it does not really, in a practical sense, limit the freight it can carry. It just makes handling more of a pain.

the smaller cargo door is the standard fitting on the 777 and the bigger cargo door is the option. If it was such a huge deal there would be no choice. The decision to go with the standard door was a swift decision that had longer term implications, and was about a million bucks an airframe if I remember correctly.

[cooperplace]

BG now has a job writing a plan for the proposed Tassie AFL team. Be interesting to see how that goes.

[PoppaJo]

The Triple has long turnaround times at each end so loading in tight timeframes isn’t an issue.

Melbourne is often weight restricted half the year also due length and heat.

[B772]

From memory some or all of the SQ B777's were fitted with the standard small rear door.

What is the weight schedule for the VA B777-300ER's ?

[The Bullwinkle]

The decision to go with the standard door was a swift decision
Brilliant!!! :E​​​​​​​

[Snakecharma]

I wondered if anyone would notice :)

[Near Miss]

VA are celebrating their 19th birthday today. I wonder if they will reach 21.

Most virgins don't last til 19, let alone 21.

[Arthur D]

Maybe not when you consider there are a large number of VAA B777 FO's being remunerated to Captain salaries.

http://vipa.asn.au/wp-content/uploads/2015/09/Virgin-Australia-Long-Haul-International-Pilots-Agreement.pdf
EXISTING FIRST OFFICERS
Clause 54.1 Virgin Australia expects that all 38 existing First Officers will obtain a command position within the Virgin Australia Group by 30 June 2016. If this does not occur, Virgin Australia will pay each of the remaining 38 First Officers at that time the applicable Captain’s rates (starting at the entry level rate). For any relevant First Officers, these payments will be made from the first full pay period after 30 June 2016 until such time as they obtain a command.

You’re kidding right? No seriously, is this a joke?

Not even Ansett was this irresponsible, and they had flight engineers on 767’s......

[AerialPerspective]

I think the cargo door thing is being a little over blown.

yes, in an ideal world they should all have the bigger door, but it isn’t the end of the world and it does not really, in a practical sense, limit the freight it can carry. It just makes handling more of a pain.

the smaller cargo door is the standard fitting on the 777 and the bigger cargo door is the option. If it was such a huge deal there would be no choice. The decision to go with the standard door was a swift decision that had longer term implications, and was about a million bucks an airframe if I remember correctly.





The fact it is an option is more about Boeing trying to present an undesirable option then offering a $ upgrade to fit the door that should be standard (like on the 747)... if it wasn't a problem then the 747 wouldn't have had it as standard. A created opportunity to gouge just a bit more money per airframe.
Secondly, no, it's not the 'end of the world' but although no one at VA seems to realise, the airline industry is a tightly coupled, interconnected network (I say that because of their boneheaded attitude to standard industry processes such as FIMs, interline, etc. mostly based on misconceptions) that relies, particularly with perishable cargo (which is why after all, it is sent by air) being able to be carried then rapidly transferred to another flight where their is no direct service. Not having the door means that the most effective means of carriage, say for something up to 5,100kg or more (4626 for an 88 inch pallet), that the most efficient unitisation and handling is to pack it ONCE onto a pallet or an appropriate (96 or 88 inch) pallet based unit. This takes time, it needs to be weighed and recorded on a weight statement to go to Load Control. Not having the door means, for example, transferring from an A330 to a 777 or from another operator affiliated with VA who presents a pallet base unit, will need unloading/packing, repacking into several smaller ULDs, then weighing, paperwork and despatch back to the ramp (often the cargo facility is remote from the terminal). I suggest considering the cost of manpower, say 2 x 2hrs at each port where this has to occur and multiply it across 5 airframes and say 2 pallets per flight (it's probably more potentially), every day, is more than $.5M per annum based on a very, very conservative per hour charge for labor. This means the extra $1M on just ONE door would be repaid after 2 years. It is a fact that ANY airline that is looking to make a dollar is going to look at the ex VA aircraft and pass them up for one that has a larger door. It's not a huge, world-ending disaster by any means but it does show a basic lack of understanding in ordering the aircraft... and doing it to pay for a paint job (which is now removed) is just nuts.
So SQ didn't specify the larger door... so what, they are not the great oracles of the industry that everyone makes them out to be... looking at them without rose coloured glasses, they have plenty of foibles like any airline and they are known to be penny pinchers in many instances.

[Saintly]

Is it fair to say that VA Australia is heading down the Ansett path as in could VA Australia cease to exist? I know its a weird question but we all know VA Australia isn't do8ng well and hasn't done well for a number of years.

[Wizofoz]

Is it fair to say that VA Australia is heading down the Ansett path as in could VA Australia cease to exist? I know its a weird question but we all know VA Australia isn't do8ng well and hasn't done well for a number of years.

No business can stay in business indefinitely if it doesn't make money and doesn't look like it ever will. Ansett was an incredibly valuable brand, but that ended up meaning nothing if it was no longer a viable business.

[B772]

BP has announced it is withdrawing from the Velocity Loyalty Program and starting its own. They will have QF as a partner.

[vhtae]

2 x 777s VH-VOZ/VPH have the big door and 3 x 777s VH-VPD/E/F have the small door


https://cimg3.ibsrv.net/gimg/pprune.org-vbulletin/746x1004/04d5b0c9_2a60_4a82_a45d_e4f0144d3d7e_010e307e04bcc1259431769 3577cea58f826db0c.jpeg


https://cimg4.ibsrv.net/gimg/pprune.org-vbulletin/750x624/8de0f946_232f_492d_a6b2_15c6368194c7_4672eccf8a1928ac8d96e1f a043d847bcbea7784.jpeg
.

[Goat Whisperer]

Counterpoint: all the hullabaloo about the cargo doors is a distraction at best, at worst disingenuous.

The 777 op was always designed for the long end of long haul. hence 9 abreast seating in Y etc. The large rear cargo door adds hundreds of kg to the empty weight. Burns more fuel on every hour of every flight. Yet with the large forward door you can still take a whole car...

https://www.virgin.com/travel/how-to-transport-one-of-the-worlds-most-expensive-cars

That was on VPE, forward hold. Longest sector, MEL-LAX.

The standard cargo door is used by such airlines as Singapore, JAL, China Southern. They know a thing about cargo.

Now, about starting routes to hub airports with no on-carriage? That was stupid, but I'm sick of hearing about the cargo doors.

[B772]

Wow, a stuff up by Virgin PR. Crowing about delivering a car from MEL to LAX (by B777) and congratulating the pilots (WTF) and they show a caption of a A330.

[Berealgetreal]

What we need now is another 1-200 posts about the 777 and it’s cargo doors and someone to say Virgin is going down the Ansett path.

[non_state_actor]

It’s a bit disappointing, albeit not unexpected in this forum, to read the vilification of these 750 roles to be reduced. Especially those firing off the rhetoric are probably pilots and as such hold prominent leadership positions in VA. Leadership by example, I’m sure I read that somewhere.

To assume that all 750 of these jobs and the people who fill them do nothing more than suckle at teat of the company, not produce or do anything meaningful and should be dispatched to the unemployment line posthaste is just plain vexatious. Yes there would be some positions that are a nice to have when things are going well, which they aren’t and these are obviously not sustainable. And yes every workgroup, pilots included, have individuals who are as useless as tits on the proverbial. But it is false equivalency to say this is representative of the whole.

I agree with the sentiment however getting retrenched from a corporate job isn't like being retrenched as a pilot. If you are in a non aviation role, there are plenty of corporate jobs down the road in your field. A friend of mine resigned from his job simply because the head office moved a few kilometres and affected his commute!! So culling 700 odd jobs, of which many are probably redeployed anyway, can't be thought as the same as retrenching pilots. Basically if an Airline Captain gets retrenched it's going to be the end of their career in Australia as a Captain. They might be able to collect an FO job somewhere but unlikely they'd ever be a Airline Captain again. If you're an accountant, work in finance, HR etc, you can just move to another company probably on the same train line.

[Buster Hyman]

Painting the aircraft white was a mistake too. They clearly should have just stayed in the red...

[Berealgetreal]

Painting the aircraft white was a mistake too. They clearly should have just stayed in the red...
A golden opportunity to have a paint scheme that looked amazing and we got.... Qf lite. Probably the first point at which I scratched my head.

Buster the problem with red is that it fades over time.

[t_cas]

Buster the problem with red is that it fades over time.

Hopefully the loss will fade away....

[Buster Hyman]

A golden opportunity to have a paint scheme that looked amazing and we got.... Qf lite. Probably the first point at which I scratched my head.

Buster the problem with red is that it fades over time.

Yes, when the Ansett. was revealed it was a revelation. Not the first of course but white wings too...:\ A lot of carriers went down a similar path and it is a very common look now. A 'statement' look coupled with a new premium brand would've gone a long way but...opportunity missed.

[regional_flyer]

Is it fair to say that VA Australia is heading down the Ansett path as in could VA Australia cease to exist? I know its a weird question but we all know VA Australia isn't do8ng well and hasn't done well for a number of years.

VA Australia? Virgin Australia Australia?

[AerialPerspective]

I agree with the sentiment however getting retrenched from a corporate job isn't like being retrenched as a pilot. If you are in a non aviation role, there are plenty of corporate jobs down the road in your field. A friend of mine resigned from his job simply because the head office moved a few kilometres and affected his commute!! So culling 700 odd jobs, of which many are probably redeployed anyway, can't be thought as the same as retrenching pilots. Basically if an Airline Captain gets retrenched it's going to be the end of their career in Australia as a Captain. They might be able to collect an FO job somewhere but unlikely they'd ever be a Airline Captain again. If you're an accountant, work in finance, HR etc, you can just move to another company probably on the same train line.

In addition, I don't think anyone is vilifying those being made redundant... no one on here knows who they are but the airline does appear to have a lot of 'timer servers' who add zero value to the company as regards providing a return on shareholder funds... this is after all why the company is in business. Lot's of people are made redundant or rather their positions are, every day. It is a very sad and stressful time but that doesn't mean people can't comment on what can assist this airline in getting to where it needs to be... the alternative is to continue to carry a section of personnel in the company that may result, if retained, in ALL of the personnel losing their jobs ultimately. Perhaps people who have no 'real' job may find more satisfaction in another job or industry. Having been in the workforce for nearly 40 years I believe in most circumstances people KNOW when their job isn't essential and often end up finding more fulfilling careers. Any opprobrium should be directed at the ineffective and incompetent managers that employed so many people in the first place and created the structure that led to bandaid appointments being made... they making those decisions of course, would be the ones being paid millions of dollars per year, along with generous bonuses for delivering absolutely CRAP performance and results... because, you know, we 'have to' pay millions to 'secure the best management talent'... seriously, the money would be better spent on pilots and/or better systems and processes. Let's not forget either that it's not like 750 people are going to be cleaning out their desks all at once, many of the positions will be the result of natural attrition.

[AerialPerspective]

Yes, when the Ansett. was revealed it was a revelation. Not the first of course but white wings too...:\ A lot of carriers went down a similar path and it is a very common look now. A 'statement' look coupled with a new premium brand would've gone a long way but...opportunity missed.

I think the original Landor BA scheme was also a wonderful change, that grey was different and new... and was much emulated. Personally I think the QF livery that was the best was the 1984 design, not the b--tardized version tinkered with by Hulsbosch who appears to never correct the statement made by others that he 'designed the original livery in 1984'... no, he didn't, it was Lunn-Dyer and Associates in Sydney... specifically Tony Lunn and Ron Dyer. It was a brilliant scheme that similarly was innovative, look how many airlines have copied the continuation of the tail colour down under the fuselage. The triangle motif was brilliant also, the way it was applied elsewhere in both patterns on glass in lounges, stationery and vehicles. I'm not sure the new QF livery is as nice, it needed a refresh but while it's not my favorite, at least it wasn't a shameless copy of the original 1984 design. As for VA, yes, a disappointing copy of various other Virgin branding cues... Hulsbosch again, IMHO not a very good designer. Designed Woolworths as well who was then threatened by Apple for a logo that looked almost the same. At the very least, it would have been nice to see some purple (like the cabins) in the VA scheme but what we have is not Qantas lite, but rather, simply b o r i n g... an insipid tail and insipidly grey-coloured lettering on the side. Raised a few eyebrows at VS when it was unveiled. It's not the worst though, that would almost have to be Singapore Airlines, the one large airline screaming out for a new livery... currently essentially a tinkered version of their 1972 livery.

[Blueskymine]

VA Australia? Virgin Australia Australia?

ATM Machine?

[Cunning_Stunt]

PIN number?

VCR recorder?

[Summer Lovin]

You’re kidding right? No seriously, is this a joke?

Not even Ansett was this irresponsible, and they had flight engineers on 767’s......

I’d be surprised if they pay up. Virgin have a long history of promising the world and not delivering.

[Chadzat]

FYI - great slabs of text separated by ... is not kind on the eyes or easy to read!

I think the original Landor BA scheme was also a wonderful change, that grey was different and new... and was much emulated. Personally I think the QF livery that was the best was the 1984 design, not the b--tardized version tinkered with by Hulsbosch who appears to never correct the statement made by others that he 'designed the original livery in 1984'... no, he didn't, it was Lunn-Dyer and Associates in Sydney... specifically Tony Lunn and Ron Dyer. It was a brilliant scheme that similarly was innovative, look how many airlines have copied the continuation of the tail colour down under the fuselage. The triangle motif was brilliant also, the way it was applied elsewhere in both patterns on glass in lounges, stationery and vehicles. I'm not sure the new QF livery is as nice, it needed a refresh but while it's not my favorite, at least it wasn't a shameless copy of the original 1984 design. As for VA, yes, a disappointing copy of various other Virgin branding cues... Hulsbosch again, IMHO not a very good designer. Designed Woolworths as well who was then threatened by Apple for a logo that looked almost the same. At the very least, it would have been nice to see some purple (like the cabins) in the VA scheme but what we have is not Qantas lite, but rather, simply b o r i n g... an insipid tail and insipidly grey-coloured lettering on the side. Raised a few eyebrows at VS when it was unveiled. It's not the worst though, that would almost have to be Singapore Airlines, the one large airline screaming out for a new livery... currently essentially a tinkered version of their 1972 livery.

[AerialPerspective]

FYI - great slabs of text separated by ... is not kind on the eyes or easy to read!




Fair enough. I'll break it up in future.

[AerialPerspective]

“Oxygen thieves”,
”Anyone with specialist in their job title should be dispatched to the unemployment line”,
”do nothing other lick managements kybers and drink lattes all day”,
” VA is exactly like the public service”.

Yep plenty of cheap shots being taken, not just here but in other forums and in person as well. By all means have a constructive conversation about the issues. But no need for the below the belt commentary. No argument from me about the management and leadership failures. But most of the 750 won’t be them will they.

In the case of the Oxygen thieves, etc. comments I agree, not necessary. Yes, none of them will be management I would think, which risks it just being a 'rinse and repeat' exercise. I hope not though.

[Weapons Grade]

SIM card? (Subscriber Identity Module)

[Servo]

I will probably never have met or will meet any of the 750 affected. Although losing your job is horrible (been there a few times now) hopefully they can find meaningful employment elsewhere and quickly.

I know there are a number of Flight Crew management that should be shown the door instead. Some of the above comments certainly apply. Sorry, but that is the truth.

@summer lovin they have come to the party and quite a number have been getting command bypass pay for quite a while, whilst never holding (obviously) or held a command. Dont get me started on integration or date of joining.

We ALL must remember it was NOT our doing or decisions that got us here. Those responsible have mainly left with very nice bank balances. Some to leave shortly.

I just received an email from the union stating the company wants to defer the NB EBA for 18-24 months due the "financial announcements and 750 redundancies" as being the underlying reason.

Nope, not our decision(s). Not our problem. Why should it be brought onto the NB crews shoulders as is usually the case.

Can see the NB group rolling over as usual though.

[Arthur D]

I will probably never have met or will meet any of the 750 affected. Although losing your job is horrible (been there a few times now) hopefully they can find meaningful employment elsewhere and quickly.

I know there are a number of Flight Crew management that should be shown the door instead. Some of the above comments certainly apply. Sorry, but that is the truth.

@summer lovin they have come to the party and quite a number have been getting command bypass pay for quite a while, whilst never holding (obviously) or held a command. Dont get me started on integration or date of joining.

We ALL must remember it was NOT our doing or decisions that got us here. Those responsible have mainly left with very nice bank balances. Some to leave shortly.

I just received an email from the union stating the company wants to defer the NB EBA for 18-24 months due the "financial announcements and 750 redundancies" as being the underlying reason.

Nope, not our decision(s). Not our problem. Why should it be brought onto the NB crews shoulders as is usually the case.

Can see the NB group rolling over as usual though.

Servo, if I read your comments right, you are saying that it is managements problem, management should therefore wear the consequences and employees and unions should continue to try and screw as much as they can?

More F/O’s on Captains rates perhaps?

If you are ex Ansett, you are a slow learner. If you are not, prepare to repeat history.

Either way you sound like an empathetic logical thinker......

[Servo]

Servo, if I read your comments right, you are saying that it is managements problem, management should therefore wear the consequences and employees and unions should continue to try and screw as much as they can?

More F/O’s on Captains rates perhaps?

If you are ex Ansett, you are a slow learner. If you are not, prepare to repeat history.

Either way you sound like an empathetic logical thinker......




No not at all. What I am trying to say, is why are the NB crew expected to be "penalised" when we had not input or control of decisions made at a management and executive level. Same with the 750 that are about to lose their jobs and all other employees that are expected to take a pay/condition freeze because of the expected financial results.

I did mention in a previous post, Paul has been given a poisoned chalice that is VA.

I certainly do NOT believe any NB crew would wish for or behave in a way that would further damage the company. I cannot control the behavior and attitude of others towards the 750. Neither union has ever "screwed" the company at any point in it's history. In fact quite the opposite.

[Arthur D]

Servo - its not about what’s fair, its about whether you want a job or not.

Your company is bleeding money right now. If not corrected it will be fatal ie you will loose your job.

It doesn’t matter whether you think you caused the problem or not. If you demand more money, you are simply making the problem worse and hastening
your own unemployment.

If you decide to ignore management and the inevitable occurs, they will move on and find other roles. Have a look at the careers of some of the senior ex AN managers after the collapse - Ahmed Fahour, George Frazis being 2 examples.

You on the other hand will find that your unemployment has been a gift for Junior Qantas Group pilots who will gladly take the promotion you have helped them get.

I think your union is being very sensible.

[B772]

Arthur D. I would like to more about the senior manager roles of Ahmed Fahour and George Frazis at AN. Please tell

[Ragnor]

This thread has most certainty run it’s course! .

[morno]

Servo - its not about what’s fair, its about whether you want a job or not.

Your company is bleeding money right now. If not corrected it will be fatal ie you will loose your job.

It doesn’t matter whether you think you caused the problem or not. If you demand more money, you are simply making the problem worse and hastening
your own unemployment.

If you decide to ignore management and the inevitable occurs, they will move on and find other roles. Have a look at the careers of some of the senior ex AN managers after the collapse - Ahmed Fahour, George Frazis being 2 examples.

You on the other hand will find that your unemployment has been a gift for Junior Qantas Group pilots who will gladly take the promotion you have helped them get.

I think your union is being very sensible.

What he said. It’s the definition of stupidity to demand more money when there is none!

[The Bullwinkle]

Servo - its not about what’s fair, its about whether you want a job or not.

Your company is bleeding money right now. If not corrected it will be fatal ie you will loose your job.

It doesn’t matter whether you think you caused the problem or not. If you demand more money, you are simply making the problem worse and hastening
your own unemployment.

If you decide to ignore management and the inevitable occurs, they will move on and find other roles. Have a look at the careers of some of the senior ex AN managers after the collapse - Ahmed Fahour, George Frazis being 2 examples.

You on the other hand will find that your unemployment has been a gift for Junior Qantas Group pilots who will gladly take the promotion you have helped them get.

I think your union is being very sensible.
Agree 100%.
Paul has had to make some tough decisions to cull 750 superfluous positions that were created under the previous regime.
I’m very certain that a lot of these positions are totally unnecessary within this organisation but I also recognise that we all need to play our part to remedy the situation or else we’ll all be out of jobs.
I can say right now that I will personally vote for the current EBA to be rolled over and I believe that the unions do have the long term survival of the company at heart.
We no longer have a self serving CEO in charge but rather, a company focussed CEO who is doing his absolute best to untangle the mess he has been handed and I believe that we also have a part to play to ensure our long term employment.

[What The]

do not accept a pay freeze!

If you have learned nothing from qantas, learn that every dollar you give up

goes into the pocket of a manager

[Snakecharma]

What the, one of the outcomes, I suspect, of the review is that there will be far fewer “managers”!

really it can play a couple of different ways - the unions can dig their heels in and insist upon negotiations, and the company would, i imagine, cry poor and the offer would be pretty average.

the alternative is to put things off, on the understanding that there are certain ground rules in place for the delayed negotiation, and then the unions negotiate from a position of relative strength next time - with backpay to the end of the current agreement agreed upon before waking in the door. whether the company would agree to such a precondition I don’t know, but I suspect it could be framed in such a way that it is an attractive, cooperative approach.

I don’t think anyone has suggested, yet, that there simply be a pay freeze for eba employees, but the consequence of the timing is that this is what will effectively happen for pilots - with the last increment already gone from memory.

but the upside is that maybe this is the time to negotiate items which don’t have a direct, dollar cost, or appear to anyway.

firm j class on duty travel - both dom and int - irrespective of the carrier (no more sorry SQ won’t give us a cheap j class seat so it sucks to be you), better retiree benefits (not just the lowest of the low priority - pilots are one of the few work groups where we will make retirement), better recognition of service - the 10 year ticket etc.

dunno, pleased it isn’t me that has to deal with this :)

for the record, I am not advocating any particular course of action, just thinking out loud about the potential paths it could take.

[coaldemon]

The sad part is that 700 will be one in three in the office. We can wait to see the complaints in 6 months from Pilots who aren't able to get feedback on safety reports or their staff travel issues etc. Will be interesting to see what and who goes.

[grrowler]

The sad part is that 700 will be one in three in the office. We can wait to see the complaints in 6 months from Pilots who aren't able to get feedback on safety reports or their staff travel issues etc. Will be interesting to see what and who goes.
You get feedback now?

[The Bullwinkle]

The sad part is that 700 will be one in three in the office. We can wait to see the complaints in 6 months from Pilots who aren't able to get feedback on safety reports or their staff travel issues etc. Will be interesting to see what and who goes.
Funniest post I’ve seen here in ages!!! :ok:
Oh, what, sorry, I was sure you were joking.........:ugh:

[minigundiplomat]

Bullwinkle,

the days of airlines consisting of a few planes, a few pilots and some engineers finished in the 1980's. I don't really like the fact that planes are now 'assets', pilots are 'systems operators' and there seems to be 10 regulations for every heartbeat, but airlines are now owned by pension funds, regulated by everyone, attacked by insane and used by the masses.

Never has there been so much competition amongst airlines. If you like your airlines thin on staff, go work for a LCC like Wow, Whizz or Ryanair.... watch your salary drop, start buying your own uniform/lunch and pay for your own ratings; they share your opinion on managers and staff. If you don't like that plan, you're working for an airline that needs to stand out from the crowd.and has to offer all the extra guff which requires people to manage the aforementioned extra guff, like FFP, customer service, catering, lounges etc etc.

I have been on both sides of the fence, and don't work for VA, so I don't really give a dingoes p1ss what goes on there, but you do sound like a cynical whinger who is probably in either the wrong airline or the wrong job.

[G.A. Boy]

Well spoken Minigundiplomat

[Summer Lovin]

Bullwinkle,

the days of airlines consisting of a few planes, a few pilots and some engineers finished in the 1980's. I don't really like the fact that planes are now 'assets', pilots are 'systems operators' and there seems to be 10 regulations for every heartbeat, but airlines are now owned by pension funds, regulated by everyone, attacked by insane and used by the masses.

Never has there been so much competition amongst airlines. If you like your airlines thin on staff, go work for a LCC like Wow, Whizz or Ryanair.... watch your salary drop, start buying your own uniform/lunch and pay for your own ratings; they share your opinion on managers and staff. If you don't like that plan, you're working for an airline that needs to stand out from the crowd.and has to offer all the extra guff which requires people to manage the aforementioned extra guff, like FFP, customer service, catering, lounges etc etc.

I have been on both sides of the fence, and don't work for VA, so I don't really give a dingoes p1ss what goes on there, but you do sound like a cynical whinger who is probably in either the wrong airline or the wrong job.

Respectfully, I think you're missing the point. There’s no such thing as Whizz or Ryanair in Australia, nor the room or motivation for anything else like it. We have a highly captive audience shared amongst two airlines. There’s absolutely no reason, other than mismanagement, why Virgin can’t survive indefinitely whilst providing excellent terms and conditions for all its employees. Australia is very fortunate in this way and there’s no need for another Ansett. Better management is all that’s required, no question.

[Icarus2001]

but airlines are now owned by pension funds Some are but not the one we are talking about on this thread.

Singapore Airlines 20%
Etihad 21%
HNA Group 13 %
Nanshan Group 23%
Virgin Group 10%
Shares at market ~11%

Give or take a few percent.

[minigundiplomat]

That’s correct, if a little linear.

and who owns them? Private equity, sovereign wealth funds and shareholders who have expectations. My point remains, it’s no longer a hands on owner, making decisions over a scotch at 10am.

Shareholders mean graphs,data, presentations, forecasts and a lot of ancillary office work that is connected to reporting on investments and returns, rather than hitting FL360 or swinging spanners.

is it a waste of time, yes, very probably. Can you do away with it and fund an airline in the modern age? Probably not, And I’ll bet the ones that miss the cull are the excel ninjas that do the financial reporting.

[Berealgetreal]

I don’t think the notion of anybody losing their job wouldn’t be sad regardless of their role. I’m pretty sure virtually none the 750 are directly responsible for the current financial situation (maybe one or two had a hand at best).

It would be great to see some questions asked of the very top end of town as to how all of this came
about. Perhaps a few forensic accountants could have a bit a poke around so to speak. Quite a bit of money involved really. I guess that’s just the corporate world for you, no matter where you live.

Jethro_27’s post really struck a chord with me. Pretty human side to someone losing a job, it’s a serious business no matter where you sit.

I recall hearing that when Ansett went under that some took their lives, so I’d caution anyone using words like “oxygen thieves” or wishing that a third of pilots were part of the number.

It was good to see and hear how much the CEO and HR manager talked of their plan to try and find employment for those affected. A lot of places just turf you out. I’ve been turfed, it’s tough going.

Anyway, most pilots aren’t concerned with feedback on reports and care little of staff travel. They’ve been around long enough and are probably too flogged to take any interest. There will always be the 3% that type away about this issue and that meal the rest simply could not be bothered.

It’s great hearing about how aviation has evolved, but at the end of the day most of us just want to get from a to b safely without getting into any trouble.

Fingers crossed the new leadership can undo the tangle and that the recession that the media excitedly promise us every second day, holds off for a few more years. If not we will all be packing our bags!

[The Bullwinkle]

If you like your airlines thin on staff, go work for a LCC like Wow, Whizz or Ryanair.... watch your salary drop, start buying your own uniform/lunch and pay for your own ratings; they share your opinion on managers and staff. If you don't like that plan, you're working for an airline that needs to stand out from the crowd.and has to offer all the extra guff which requires people to manage the aforementioned extra guff, like FFP, customer service, catering, lounges etc etc.
I’ve never said anything like what you are insinuating.
Never have I said that the airline should be thin on staff. It should have the correct number of staff in the necessary positions and those staff should be the best available.
And I absolutely believe that the new CEO has evaluated the situation quite accurately and determined where the business needs to focus its attention in order not only to survive but to prosper.
And I’m well aware that the airline needs managers and again, the new CEO is putting some excellent people into the necessary positions, the permanent appointment of the new COO being a perfect example.
The previous CEO brought all his talentless mates from QANTAS and paid them ridiculous salaries and all they did was feather their own nests, to the detriment of the company.
Obviously it’s unfortunate when anybody loses their jobs and I’m sure the new CEO did not take this decision lightly. Quite the opposite in fact.
But something had to be done to repair the damage done by his predecessor and I believe that he is making decisions with the company’s best interests at heart.

[dcten]

The situation reminds me of the Air Berlin desaster .i do hope it does not lead to the same result..
BTW: Does anyone know woho replaced Judith Crompton as CCO ?

[John Citizen]

Unwinding the Borghetti experiment at Virgin (https://www.afr.com/companies/transport/unwinding-the-borghetti-experiment-20190903-p52nct)



"Right-sizing", "strategic review" and "organisational change". Translate the corporate speak, and it means there's an enormous clean-up job underway at the country's second airline group.

Scurrah is unwinding many of his predecessor's decisions as he seeks to make the airline profitable. Janie Barrett
Less than six months into his new role at Virgin Airways, Paul Scurrah (https://www.afr.com/link/follow-20180501-p52lwr) won't say it, but everyone else is: he's effectively reversing the strategy so carefully crafted over nine years by his predecessor, John Borghetti.

And Scurrah has barely started. Cutting 750 head office roles; delaying large aircraft orders; chopping routes and overhauling his management team is just the beginning.

He's even unwinding some of Borghetti's demands for formality, relaxing cabin crew dress codes - glossy red lipstick is no longer compulsory.

Staff can now make their own choice about what to wear when flying Virgin on their holidays, rather than relying on a rule book and being monitored by ground staff.

Everything is up for grabs. And what the market really wants to know is, will Scurrah take Virgin back to its low-cost roots, and what does that mean for its budget brand Tiger, and the international division?

Borghetti was mainly praised for developing the airline from a low-cost carrier to a multi-brand carrier. Louie Douvis
Scurrah won't provide more detail on the future strategy of the group, because he hasn't gone through a complete review yet.

But questions include: has the country's second airline really been doing it that tough? Was Scurrah truly handed such a mess? Or is this a standard new CEO re-set, masquerading as something more serious?

"It just feels like Paul needs to make an early statement ... I've never seen a new CEO come in and not do that," says a person who has worked at Virgin.

Borghetti, whose own early changes included introducing pilot uniforms and insisting on senior executives wearing ties, announced his departure in June last year.

He was mainly praised for developing the airline from a low-cost carrier to a multi-brand carrier, and building the airline's frequent flyer program - expected to be floated, as 35 per cent shareholder Affinity looks to exit its investment - to 9 million members.

Over the years, the expensive strategy had attracted some criticism, most notably from then shareholder Air New Zealand in 2016, which sold in part because losses weren't being stemmed fast enough.


In a breathtaking display of other-world airline-speak, Borghetti himself declared the job done in June last year. "The company is in great shape, and it's a good starting point. The transformation has been done," Borghetti said, while at the same time acknowledging the airline industry was always subject to external hits, mainly in the form of economic swings, fuel prices and foreign exchange fluctuations.

But how can a company that is now cutting 750 jobs in its head office and just posted a $75.6 million annual loss (https://www.afr.com/companies/tourism/virgin-cuts-750-jobs-amid-soft-conditions-20190827-p52l7o) have been in great shape a year ago?

Australia cabin crew no longer have to wear red lipstick. Graham Denholm
Borghetti, now a non-executive director at soft drink group Coca-Cola Amatil, doesn't want to weigh back in. "After 46 years I am no longer involved in the industry. I am doing other things," he texted in quick response to a request for an interview.

Scurrah says the environment has got worse far more quickly than anticipated, and his overhaul is about preparing the airline to weather tougher economic conditions.

(His counterpart at Qantas, Alan Joyce (https://www.afr.com/link/follow-20180501-p52mgv), isn't quite as bearish, preferring to characterise domestic demand as "mixed", while acknowledging headwinds of higher fuel costs and a lower Australian dollar.)

In a conversation about the organisation's culture, Scurrah wants to make sure he's not seen to be drawing comparisons with his predecessor. He wants the changes he is implementing at Virgin to be simply seen as his way of doing business.

"I've been an ex-CEO of other companies as well. You can't understand the previous circumstances in which decisions were done," he says. Scurrah has previously run DP World and Queensland Rail.
That's perhaps even more true at Virgin than other companies. Some 90 per cent of its shares are owned by five airlines: the financially struggling Etihad, Nanshan Group, Singapore Airlines, HNA Group and Virgin Group.

Originally, the idea was that airline shareholders would help support Virgin's expansion and networks. In practice, perhaps unsurprisingly, each airlines' own issues have tended to dictate their approach to Virgin, which may have confused the strategy.

Right now, the airline, chaired by Elizabeth Bryan since 2015, would seem to be on a clearer course: return to profitability and, in Scurrah's words, "honour the investments that have been made to get where we are today".

In response to a question, Scurrah says he is aware the board and shareholder base are often considered dysfunctional. But he's found "the alignment and unity really pleasing. All of us want to be a successful airline".

But to blame the airline's shareholders for Virgin's strategy under its previous chief executive misses the point, say others.

"Under Borghetti, the airline went upmarket without profit," says one aviation analyst. "He undermined their natural advantage on costs, gave it away. And now they are in no-man's land."

He traces this back to when Qantas grounded its planes and Borghetti gave his pilots a pay rise. It's one of the biggest criticisms of the Borghetti era: that the man passed over for the Qantas top job spent his time at Virgin creating a mini-Qantas rather than a profitable airline.


The analyst points out that as a low-cost airline, in calendar year 2007, Virgin delivered profits of $348.1 million.

"The opportunity for Scurrah is big," says the aviation analyst. "Stop the bleeding, bring some stability into the earnings profile, sharpen the cost base and become a more effective competitor to Qantas."

It's not a new idea: Borghetti talked in various ways about the path back to profitability, at one point calling it "fourth phase" of the airline - sustainable earnings growth, after years of investment, a capacity war with Qantas and recapitalising.

Scurrah, who usually splits his time between Brisbane and Sydney, has spent the past week in meetings with staff around the country to discuss the job cuts. He says individuals are "concerned" but "there's been an acceptance that it is necessary for us, given the headwinds we see coming".

Scurrah says keeping a company's staff happy - at least most of the time - is a crucial part of balancing the three stakeholder groups: employees, customers and shareholders. But he's aware that they can't all be happy.

"If you say yes all of the time to one of the groups, it will weigh on the other two ... if we provide everything customers want - and in an airline, that's cheap airfares - shareholders don't get the returns they want. You have to get the balance right," he says.

Defining the existing Virgin culture and what Scurrah wants to ensure stays is harder. But Scurrah says "command and control" has never been his style. Rather, he wants to ensure a positive, vibrant and high-trust culture where people's opinions are respected, even as he's presiding over job cuts.

So he's introduced a "safety share" and "people share" as the first agenda item at each management meeting, of which there are dozens a week.


"People share is about recognition and gratitude. It's where we invite the group in that meeting to bring to our attention something of excellence that would not otherwise get the attention of senior management," he says.

Emails are sent to acknowledge the excellence, though not always with "safety shares", which can be more sensitive.

Scurrah's favourite to date? During the Sydney storms, a customer who lived two hours from the city couldn't get home because there weren't any taxis, Ubers or Olas (Virgin's partner) available. The solution? A staff member drove the customer home.

As for the few shareholders left on the register that aren't airlines, his largest institutional shareholder is Wilson Asset Management.

Geoff Wilson, a vocal advocate of privatising in the airline, says he's looking forward to sitting down with Scurrah to understand the strategy.

"Unfortunately, we haven't had the opportunity to meet him yet," he says. As well as pushing for a privatisation, Wilson has also got another idea.

"Assuming Velocity is floated, with Virgin keeping a majority position and potentially selling down, I think it's a fantastic opportunity for the Virgin board to reward Virgin shareholders and give them an entitlement."


(https://www.afr.com/companies/transport/scurrah-to-put-virgin-s-profit-before-passion-20190829-p52lwr)

[dcten]

Hi John ,
thanks a lot .

if i have understand corecctly merren Mc arthur left the company `?

[Buster Hyman]

says a person who has worked at Virgin.
I might give Investigative Journalism a go.

"The new colours are a disaster" says a person who Virgin flew over recently.

[ebt]

Hi John ,
thanks a lot .

if i have understand corecctly merren Mc arthur left the company `?

In theory she stays around until the end of the year to "assist with the transition" to the new CCO and the new EGM of Tiger, but likely she'll be on gardening leave for large part of it.

[PPRuNeUser0198]

Tigerair CEO Merren McArthur’s top packing hacks (Tip #1: don’t forget your undies)

https://www.escape.com.au/travel-advice/tigerair-ceo-merren-mcarthurs-top-packing-hacks-tip-1-dont-forget-your-undies/news-story/2f9844e7bf6abd2b2d1570540dfaad6c