Cathay Pacific stand down

[Obie]

All 27,000 staff being sent on leave without pay according to the Oz today!

[Capn Bloggs]

No, they have been asked to take three weeks LWOP between March and June.

[Berealgetreal]

WoW that’s incredible.

Do CX own all their aircraft? Would assume so.

Operators with owned machines are well ahead in these circumstances.

[coaldemon]

They have quite a few leased.

[Jetdream]

Wouldn’t get too excited. It’s voluntary and has to be applied for. And yes, only talking three weeks.

[Veruka Salt]

Voluntary unpaid leave of 3 weeks.

Over half the fleet (160 ish airframes) is owned outright. The remainder are split roughly 50/50 between operating & finance leases.

[ACMS]

We’ve been down this road at least 3 times before.......

Cathay will survive this as well.

[B772]

I agree CX will survive this crisis. Unfortunately I believe Hong Kong Airlines (HX) will disappear or be restructured. For starters 10% of the workforce are to lose their jobs with the remainder of the workforce to work 2 weeks and 2 weeks off with half pay. HX has been bleeding cash for months with most salaries for Nov 19 paid in Dec 19. Services to San Francisco, Los Angeles and Vancouver were axed plus inflight entertainment on other routes abolished to reduce costs. A number of aircraft have been surrendered including an A350-900. A huge capital injection last month was made in order to retain their AOC

Now the bad and possibly sad news. HX are part of the HNA Group who own or have an interest in about 18 airlines including Virgin Australia (19.82%). With 410,000 employees HNA need to raise tens of billions of dollars at short notice to stay in business. On 06 Feb 20 HNA advised they wish to sell Swissport. Private equity most likely will purchase Swissport at a price of USD800,000,000 less than what HNA paid for it just under 2 years ago. Swissport employs 66,000 employees and owns Aerocare in Australia and New Zealand.

Virgin Australia will need cash very soon to stay solvent. It will be a challenge for Etihad, HNA and the Nanshan Group (Qingdao Airlines) to supply cash. SQ could come to the rescue with a fire sale offer for the airline minus Branson which would save a significant amount of money each year.

Stay tuned. There could be a domino effect of collapses.

[PPRuNeUser0198]

Virgin Australia will need cash very soon to stay solvent

Really? On what basis? Can you please elaborate further.

[Dewa_Gede_70]

Really? On what basis? Can you please elaborate further.


He already has

[PPRuNeUser0198]

Where? I can't see in his post the evidence that without a cash injection 'soon' VA won't remain solvent?

[Foxxster]

Well they are cutting huge numbers of flights for 2 months.

https://www.scmp.com/news/hong-kong/transport/article/3049654/hong-kongs-cathay-pacific-group-has-cancelled-more-half

[PPRuNeUser0198]

Your link relates to Cathay Pacific. B772 has said that Virgin Australia won't remain solvent without a cash injection soon. I am interested in that supporting data.

[CurtainTwitcher]

T-Vasis, I don't recall Ansett requiring a cash injection to remain solvent until the day they shut it down. Qantas went to the Federal government for a debt guarantee, yet posted large profits just a few years later.

I'm not making any predictions about Virgin's financial position, just noting that public pronouncements, (or lack of them) rarely gives guidance to the future course of history.

[Sunfish]

The first to know are always the trade. The last to know are the banks and shareholders (taught to me by Merv Lincoln). The fuel company supply terms are the ones to watch.

[RubberDogPoop]

Your link relates to Cathay Pacific. B772 has said that Virgin Australia won't remain solvent without a cash injection soon. I am interested in that supporting data.

I guess:
HX are part of the HNA Group who own or have an interest in about 18 airlines including Virgin Australia (19.82%).
It will be a challenge for Etihad, HNA and the Nanshan Group (Qingdao Airlines) to supply cash.

this could be supporting evidence?

Cant see a link from B772, just a comment on CX, and then one on HNA (who own a decent chunk of VA), and another mentioning the other players in VAs ownership structure??? Put it together with 9 years of losses for VA, what more supporting evidence do you need? Seems like a measured, and prescient opinion to me....

[PPRuNeUser0198]

VA's finances are not great by a long shot, especially around debt. But it was sitting on $1.7b of cash as of the last reporting period and was generating free cash. This is not solvency. Ansett is not a comparison. VA has been aggressive in cost reduction and capital deferment programs. It has a healthy domestic business. the VA model is changing. The market can support it. B772 is making claims that without a cash injection from equity partners soon - VA will become insolvent. I don't agree.

[krismiler]

The first to know are always the trade. The last to know are the banks and shareholders (taught to me by Merv Lincoln). The fuel company supply terms are the ones to watch.

I first found out that the company I was working for had gone into administration when I got a phone call from the local Shell office telling me that I couldn’t use the carnet anymore.

[Mr Google Head]

I agree CX will survive this crisis. Unfortunately I believe Hong Kong Airlines (HX) will disappear or be restructured. For starters 10% of the workforce are to lose their jobs with the remainder of the workforce to work 2 weeks and 2 weeks off with half pay. HX has been bleeding cash for months with most salaries for Nov 19 paid in Dec 19. Services to San Francisco, Los Angeles and Vancouver were axed plus inflight entertainment on other routes abolished to reduce costs. A number of aircraft have been surrendered including an A350-900. A huge capital injection last month was made in order to retain their AOC

Now the bad and possibly sad news. HX are part of the HNA Group who own or have an interest in about 18 airlines including Virgin Australia (19.82%). With 410,000 employees HNA need to raise tens of billions of dollars at short notice to stay in business. On 06 Feb 20 HNA advised they wish to sell Swissport. Private equity most likely will purchase Swissport at a price of USD800,000,000 less than what HNA paid for it just under 2 years ago. Swissport employs 66,000 employees and owns Aerocare in Australia and New Zealand.

Virgin Australia will need cash very soon to stay solvent. It will be a challenge for Etihad, HNA and the Nanshan Group (Qingdao Airlines) to supply cash. SQ could come to the rescue with a fire sale offer for the airline minus Branson which would save a significant amount of money each year.

Stay tuned. There could be a domino effect of collapses.

Re: VA

There are actually plenty of other ways to raise money other than existing share holders.

Likewise if any of the shareholders want to get out of their ownership; they sell their shares. This has no impact on the operation of the airline - maybe puts downwards pressure on the share price (if there’s any further it can drop)