Government Loan to Virgin Australia

[Tubman601]

Blueskymine 100% correct.
Not just airlines also.

[wheels_down]

It’s behind a paywall, any chance of a copy paste :)
Won’t let me copy.

4/5 Opted out.
1/5 On the fence (Branson)

[tartan_penguin]

Virgin Australia's biggest shareholders have passed up a deal to tip in fresh funds and recapitalise the airline, opening up the equity search to outside investors.It is understood Virgin started its equity search with the five shareholders, who together own more than 90 per cent of the airline's shares on issue.

The five shareholders were invited into the data room and shown a deal that would've seen them lead the looming and necessary financial restructure

The equity injection would've happened at the same time as lenders took a steep haircut, and required the existing shareholders to re-invest in the company to retain their place on Virgin's share register.

It is understood the due diligence process finished early this week - and it is at the stage where the five big shareholders have had to opt in or out.
Four of the five opted out, sources said, while the fifth was a "maybe".The four to opt out were Etihad Airways, Singapore Airlines, Nanshan Group and HNA Group, who together own 80 per cent of the company.

The "maybe" was Richard Branson's Virgin Group, whose attachment to the Australian business goes beyond its 10 per cent stake.

Being strategic investors, each has bigger problems closer to home. Airlines across the world have had to ground planes in response to the COVID-19 outbreak and are fighting for survival.

So Virgin's search moves to potential new investors - and it is understood to be particularly keen on Australian investors, in what would be a dramatic overhaul of its share register.

It remains to be seen whether any investors will take the bait. The equity search is running at the same time as a debt restructure, which would be expected to see the company's lenders take a big haircut on their investments.

It also comes as Virgin has gone to Canberra to seek its assistance. Virgin is seeking $1.4 billion in fresh funds, and asked the government to play a role in the mooted bail out.

The government piece is arguably the most material piece of information for any potential investors and has real implications for Virgin's restructure and the airline's future.

Should it all come together, Virgin may be able to avoid administration. If not, then it could become the next Arrium, and be auctioned off to the highest bidder and proceeds handed to creditors by order of seniority.

Equity holders are expected to be wiped out, whichever way the deal goes. The five strategic investors account for about 90 per cent of the share register.

Virgin shares are in a trading halt while the deal plays out. Morgan Stanley and UBS are managing the data room, while restructuring specialist Houlihan Lokey handles the debt side of the equation.

It had $4.8 billion in interest bearing liabilities at December 31 and $900 million in unrestricted cash and short term investments. Its next debt maturity is a $US350 million bond due in October 2021.

The $4.8 billion interest bearing liabilities included $1.8 billion in unsecured bonds, $1.6 billion lease liabilities, $1.2 billion aeronautic finance facilities and $221 million in bank loans. The aeronautic finance facilities and bank loans were secured, according to the company's interim financial report.

The unsecured bonds include the $325 million retail notes and $US425 million institutional notes issued to buy back full control of Velocity Frequent Flyer late last year.

It's a very different capital structure to Arrium, which was the last big workout bankruptcy in Australia. Arrium failed owing more than $4 billion and each of the big four Australian banks were towards the top of the list of creditors.

[ozbiggles]

A quick note to SCo MOs inbox to remind him that if he gets this wrong your vote will go somewhere else is always and sometimes the only way to get their attention. All the other major countries have assisted their airlines and Qantas will also need additional assistance too. Does anyone see any International flying happening in the near term that will keep a fleet busy?

[lucille]

Pointless blaming the government, they didn’t create this virus, nor the pandemic. The government is trying to minimise loss of life. Possibly it’s heavy handed and an overreaction but every politician has an eye towards next weeks headlines. No one wants to be called a callous killer by the baying media - which is precisely what will happen if they stray outside the lines of medical advice and things go pear shaped.

You may disagree with them as to the value of keeping the 80 year old demographic alive versus keeping you in full time work but that’s just a matter of philosophy which can only be answered with hindsight.

[topend3]

There's plenty of people also who will support the govt not guaranteeing the debts or bailing out a company that hasn't made a profit in 8 years, if they do this there's every chance it could collapse at some future point in a depressed post COVID market. I do tho hope they can survive for all's benefit.

[junior.VH-LFA]

A quick note to SCo MOs inbox to remind him that if he gets this wrong your vote will go somewhere else is always and sometimes the only way to get their attention. All the other major countries have assisted their airlines and Qantas will also need additional assistance too. Does anyone see any International flying happening in the near term that will keep a fleet busy?

The ones that have substantial amount of national ownership, or also helped out foreign owned airlines in their countries? Correct me if I'm wrong, but I haven't heard of any governments bailing out foreign owned airlines recently.

That's not to say I don't feel for anyone who works for VA, of course I do, but there's a business ethics and then a people ethics way of approaching this.

[ECAMACTIONSCOMPLETE]

A quick note to SCo MOs inbox to remind him that if he gets this wrong your vote will go somewhere else is always and sometimes the only way to get their attention. All the other major countries have assisted their airlines and Qantas will also need additional assistance too. Does anyone see any International flying happening in the near term that will keep a fleet busy?

the next election is years away, don’t overestimate the always short memory of the voting public, aside from the 8,000 staff.

A bailout of Qantas is a much more politically easy decision, majority Aussie owned, Aussie icon and making record profits in the years leading up to COVID-19. Plus if they ask for a bailout, it will be 6-12 months into the crisis. The fact that Virgin has asked for this barely a month in, shows how precarious it’s finances were, all the more reason to let it slip.

Just one mans opinion, no offence meant to the staff and I wish the best of luck to you all.

[t_cas]

What will the pundits say when Qantas needs bailing out later this year or early next...... QF are not immune. Should the government step in an prop then up?

[Lead Balloon]

It's been said before:

Qantas has a 49% cap on foreign ownership.

Virgin is over 91% foreign owned.

Different beasts, actually and politically.

The more pertinent comparison is the assistance given to 100% foreign-owned Rex....

[chookcooker]

It's been said before:

Qantas has a 49% cap on foreign ownership.

Virgin is over 91% foreign owned.

Different beasts, actually and politically.

The more pertinent comparison is the assistance given to 100% foreign-owned Rex....

cool. So the line is somewhere between 49% and 91%.
to simplify, can you please state where exactly your line stands??

regardless, the government has openly stated its stance on not picking winners and any support will be on an industry wide basis.

hard to go back on that without recourse. Now for Va or in 6 months for QF.

[Buster Hyman]

I assume you don’t support the money on offer to regional airlines? Or the money being spent keeping childcare centres open. Or the money being given to universities to help them offset the massive loss in revenue from foreign students. I also assume you’ll hand back any job keeper subsidy you (or your company) is receiving because sure as hell having the government chip in $3k a month per employee isn’t a free market either.
If they're broadly going to industries rather than poorly run companies, as per your quote, then yes, I'd support it. As an aside, I have no Jobkeeper monies to pay back as I'm ineligible.
What I can say is the government introduced these measures and strangled our airline industry. It completely restricts our ability to trade. Airlines need forward bookings and consumer confidence.

Yes, the government can’t pick winners or losers, but it’s the government who’s done this to its companies and citizens to save its health system and liability. So it’s the government who needs to sort it out.
Ergo, you'd rather Trumps solution where everything remains open and...let me just check the current numbers...26,033 have died.

A quick note to SCo MOs inbox to remind him that if he gets this wrong your vote will go somewhere else is always and sometimes the only way to get their attention.
There's a high chance of that happening, but the ALP is a bit like SIA, all talk no action. I recall Beasley sitting on an Ansett tug telling us all what he'd do if he was in power. When they did get into power, they didn't want to know us!

[Turnleft080]

https://www.latimes.com/world-nation/story/2020-04-14/treasury-major-airlines-will-take-aid-to-meet-payrolls

Read this Scomo.

[normanton]

cool. So the line is somewhere between 49% and 91%.
to simplify, can you please state where exactly your line stands??

50.01%. Virgin is a majority foreign owned company, Qantas is not. It was sold like that for a reason - so it remained an Australian owned company.

The government should have told Rex to get stuffed.

The difference here is that Rex are profitable, and Virgin are not. They have a debt of over $5b, and couldn't make money when the times were good. They definitely wont be making money when the times are bad, and they definitely wont be making money post COVID-19 without significant changes and a restructure. I don't want my $1.4b tax payer dollars spent on a gamble.

[Trevor the lover]

How is Rex 100% foreign owned when it is a publicly listed company trading freely on the share market?

[Lead Balloon]

wishiwasupthere said so at post #495.

Maybe someone said something on pprune that's not accurate...

[B772]

REX is not 100% foreign owned. In fact the top 20 shareholders only own 86.8% of the company. You would be surprised at who owns small holdings in REX. REX is up 23% today on the ASX.

REX know the SF340 is too small for the larger markets in the ADL-MEL-CBR-SYD incl Tasmania golden triangle. They are looking at larger aircraft again. This makes 3 airlines who are interested in commencing an operation cherry picking routes. Watch this space when the wheels fall off VA.

[krismiler]

Etihad have squandered billions on questionable investments in the airline world and may end up merging with Emirates so they aren't in a position to step up to the plate.

HNA group is a similar position to Virgin and is having to restructure its own debts. https://www.scmp.com/business/companies/article/3079984/hna-group-halts-trading-its-note-shanghai-hasty-plea-time-caused

That takes two of the bigger five out of the equation. Richard Branson is the smallest of the five and will not want to risk his entire fortune.

That leaves the Nanshan Group which is one of China's largest companies and already has airline interests amongst its diversified holdings, together with Singapore Airlines left in the running.

A tie up between these two might be on the cards with Nanshan fronting the bulk of the cash and SIA kicking in some money and the management expertise. The fate of Virgin could be in the hands of a labyrinth of Chinese business networks. Taking a loss on their current positions might be worthwhile if they can acquire a new entity in restructured form, free of debt. Around 60 - 70 B737s operating on cherry picked routes with the infrastructure already in place might turn a profit within a reasonable timeframe once restrictions are lifted.

[DanV2]

Etihad have squandered billions on questionable investments in the airline world and may end up merging with Emirates so they aren't in a position to step up to the plate.

HNA group is a similar position to Virgin and is having to restructure its own debts. https://www.scmp.com/business/companies/article/3079984/hna-group-halts-trading-its-note-shanghai-hasty-plea-time-caused

That takes two of the bigger five out of the equation. Richard Branson is the smallest of the five and will not want to risk his entire fortune.

That leaves the Nanshan Group which is one of China's largest companies and already has airline interests amongst its diversified holdings, together with Singapore Airlines left in the running.

A tie up between these two might be on the cards with Nanshan fronting the bulk of the cash and SIA kicking in some money and the management expertise. The fate of Virgin could be in the hands of a labyrinth of Chinese business networks. Taking a loss on their current positions might be worthwhile if they can acquire a new entity in restructured form, free of debt. Around 60 - 70 B737s operating on cherry picked routes with the infrastructure already in place might turn a profit within a reasonable timeframe once restrictions are lifted.

Nanshan and the "So-called Saviour" Singapore has already ruled themselves out of putting more equity in Virgin Australia - See the news article in Reply 503.

4 out of 5 shareholders in Australia had declined putting in more equity. The only shareholder on the fence is Virgin Group/Richard Branson.

Only way that the "so-called Saviour" Singapore is going to get involved is if they pick up the VA assets at a liquidation sale. Then again, they'd be questioned whether if they can actually run a airline company in Australia, they've had 3 failed attempts already. (including VA).

[34R]

Around 60 - 70 B737s operating on cherry picked routes with the infrastructure already in place might turn a profit within a reasonable timeframe once restrictions are lifted.

You’re kidding right?

If VA come out the other side of this they will more than likely resemble the Virgin Blue of the old days rather than the modest fleet you speak of.
Everyone agrees recovery will be slow... and you’ve got them flying around 70 737’s???

[DanV2]

You’re kidding right?

If VA come out the other side of this they will more than likely resemble the Virgin Blue of the old days rather than the modest fleet you speak of.
Everyone agrees recovery will be slow... and you’ve got them flying around 70 737’s???

Also to add Virgin only owns half of their 737 fleet (under 40 aircraft).

There's no way a new LCC formed under "VA Mk II" will be more than 38 aircraft (at most), as basically almost all (if not all) leased aircraft at VA will start to get repossessed by lessors the moment VA enters administration.

[Led Zeppelin]

Try 20 -30 aircraft maximum on trunk routes initially with additional non capital city ports in the intermediate future as things get back to normal.

If VA stays, it will be a very, very different company.

[markontop]

Virgin Blue
Great! More juvenile PAs and dress ups.

[Led Zeppelin]

I think second time around, the adults will be running the company.

[PPRuNeUser0182]

Virgin Blue
Great! More juvenile PAs and dress ups.

At least it turned a profit every so often.

Good luck everyone. Horrific times.

[Paragraph377]

I’m surprised nobody has mentioned a ‘Compass Mk3’? Bryan Grey and his mentor Reg Ansett might be long gone, but I was sure that somebody would still make the suggestion!

[DanV2]

Virgin Blue
Great! More juvenile PAs and dress ups.

That form of Virgin turned profits for most years that airline was in operation. Their successor has never turned a 'decent' (if any) profit since the JB led rebrand.

[34R]

To be clear, my reference to Virgin Blue was a small to medium fleet size, not face painting and chocolate muffins

[markontop]

Virgin Blue made a profit when they were the only other option to QF.
Also by way of comparison they were expanding into a vacuum and the economy was strong.
I would suggest it is easier to expand as your resources are working at 110%, much more efficient.
Today should they be successful is kind of like fighting a retreat, hard to contract into profitability with excess resources and established work practices.

[topend3]

Those were the days! A300s and A310s (Compass :) ) Oh and btw what if COVID HADNT have come along, were VA going to be morphing into their previous self (low cost, single aisle only etc) or just running to the end and dying? Maybe cOVID might be their saviour???

[Weapons Grade]

Methinks this is a tragedy of Shakespearian proportions viz., Hamlet Act 5, scene 1: the gravedigger scene.
(modern translation):
"Let me see. (he takes the skull) Oh, poor Yorick! I used to know him, Horatio—a very funny guy, and with an excellent imagination. He carried me on his back a thousand times, and now—how terrible—this is him. It makes my stomach turn. I don’t know how many times I kissed the lips that used to be right here. Where are your jokes now? Your pranks? Your songs?
Your flashes of wit that used to set the whole table laughing? You don’t make anybody smile now. Are you sad about that? You need to go to my lady’s room and tell her that no matter how much makeup she slathers on, she’ll end up just like you some day. That’ll make her laugh. Horatio, tell me something."

Perhaps it is time to bury the corpse (or prepare for it to become morte).

[Icarus2001]

SIA kicking in some money and the management expertise.
Now that is a funny sentence.

[mattyj]

The major issue with Virgin’s operations (IMHO) is that they have too many fleets in small numbers. When you have only 4-5 aircraft in a fleet, your investment in spares, maintenance, training costs, etc is far greater than when you have a fleet of 15-20 aircraft. The only way that I can see Virgin trading out of this is to reduce their operations to a single large fleet of B737’s with all the B777’s, A330’s, A320’s, ATR’s etc disposed of - with significant losses due to the depressed market. This will cause significant pain for many staff but, it s necessary to save the airline. All the best to Virgin staff.


they could paint all the 73s red too..get the tech crew dressed down in a more casual outback style uniform (no ties). Have the cabin crew tell jokes on the PA..lighten it up a bit..how can you fail?!
​​​​​​​

[DanV2]

Those were the days! A300s and A310s (Compass :) ) Oh and btw what if COVID HADNT have come along, were VA going to be morphing into their previous self (low cost, single aisle only etc) or just running to the end and dying? Maybe cOVID might be their saviour???

Scurrah was already on the way to reshaping VA domestic closer to it's birth roots by withdrawing out of unprofitable Short Haul International and Domestic Regional Routes, drawing down Tiger (before COVID-19 sped up its demise) plus slowly unbundling VA Economy (and to some extent cutting down Domestic Business) on all routes except Perth.

International was being basically reduced to mainly East Coast-LAX (the only destination out of the VA international network that was earning money for a largely loss making international division overall) with a single HND, and a medium term plan to reduce and simply the wide-body fleet to 1 type (replacing the 77Ws and A330s),

Since COVID-19, all those initial plans had since been thrown out the window.

[krismiler]

SIA make large and consistent profits in Singapore. Where they seem to fall down is investing in foreign ventures run by others. Possibly they might decide to be more hands on and send in their own people for the key roles next time.

Future fleet size is dependent on the game plan, 30 - 40 aircraft gives them another Virgin Blue whereas 60 - 70 gives them a serious sized airline if they want to replicate Virgin without the loss making areas. When WOW Air went broke last year its aircraft were soon snapped up by other airlines, now with most of the worlds airliners parked up, leasing companies will be very receptive to anyone wanting their aircraft, and not in such a great hurry to fly them all the way back from Australia into storage.

[topend3]

Scurrah was already on the way to reshaping VA domestic closer to it's birth roots by withdrawing out of unprofitable Short Haul International and Domestic Regional Routes, drawing down Tiger (before COVID-19 sped up its demise) plus slowly unbundling VA Economy (and to some extent cutting down Domestic Business) on all routes except Perth.

International was being basically reduced to mainly East Coast-LAX (the only destination out of the VA international network that was earning money for a largely loss making international division overall) with a single HND, and a medium term plan to reduce and simply the wide-body fleet to 1 type (replacing the 77Ws and A330s),

Since COVID-19, all those initial plans had since been thrown out the window.

True, perhaps PS came along a year ot two too late.

[DanV2]

SIA make large and consistent profits in Singapore. Where they seem to fall down is investing in foreign ventures run by others. Possibly they might decide to be more hands on and send in their own people for the key roles next time.

Future fleet size is dependent on the game plan, 30 - 40 aircraft gives them another Virgin Blue whereas 60 - 70 gives them a serious sized airline if they want to replicate Virgin without the loss making areas. When WOW Air went broke last year its aircraft were soon snapped up by other airlines, now with most of the worlds airliners parked up, leasing companies will be very receptive to anyone wanting their aircraft, and not in such a great hurry to fly them all the way back from Australia into storage.

SIA had a proper attempt at the Australian market through their 100% control of Tiger Airways Australia (via Tiger Airways Holdings). SIA still couldn't get that right, despite running that operation out of the shed terminal in Melbourne.

Despite full control, SIA still couldn't get that right with the maintenance debacles (to add to the infamous 'Bogan handling' through their own TV show that was shown in Australia for a while). All of that led to "selling" the remaining 50% to VA for $1.

SIA were more hands on in their Vistara investment with their 49% stake before COVID-19, and even had SIA buying planes for Vistara. This suggests the Australian domestic market is not on SIA's priorities.

If anything, if SIA were interested in any of VA's assets (if at all), it would be 'Velocity', which was one of the primary reasons why they bought a stake in VA in the first place. Buying Velocity would allow SIA to integrate the Velocity customer base into Krisflyer.
This would allow the "VA mk II" (post-administration successor) to start afresh with their own FF program if they wish to do so (or go without one if they're going the ULCC route).

[krismiler]

The board of Virgin have a breathing space whilst everyone is grounded, once the grounding is lifted and limited services are allowed to resume it's crunch time. ASIC have a guide for directors which gives the penalties for trading whilst insolvent and also lists warning signs of insolvency.

https://asic.gov.au/regulatory-resources/insolvency/insolvency-for-directors/insolvency-a-guide-for-directors/

Calling in the administrators is an admission of defeat, and certainly doesn't look good on a CV but it beats fines of up to $200 000 and the company creditors coming after you personally for their money. I think we'll see Virgin in administration soon and a limited network with a greatly reduced fleet size back in the air in the interim whilst this gets sorted out.

The outcome is still far from certain whilst the players make their moves. New story from the AFR linked below.

https://www.afr.com/companies/transport/virgin-holds-up-domestic-network-subsidies-20200415-p54jy9

[Icarus2001]

Where they seem to fall down is investing in foreign ventures run by others. Possibly they might decide to be more hands on and send in their own people for the key roles next time.
The reality is they only succeed as a monopoly airline owned by a government that goes in to bat for them on rights etc. Outside of their nursery they could not organise a shag in a house of ill repute.

once the grounding is lifted and limited services are allowed to resume it's crunch time


There is NO grounding.

They could be running a limited network now. Just read that there are 1500 cruise pax stuck in WA due no flights. Money for jam.

[DanV2]

Exactly. Just because certain airlines can make money in their own backyard (even if assisted by state-owned carriers such as Singapore and Emirates) doesn't necessarily translate into success overseas.

Singapore's (SIA) record overseas (not just in Australia) has been dismal overall, largely a trail of destruction and not much better than Etihad's string of bankruptcy failures.

The only exception to SIA's string of overseas failures is that the jury is still out on SIA's Vistara investment.

Many people say that VA should stick to their "bread and butter" domestic flying, and pull out of International/Tiger/Everything else.

The same view can be applied to SIA, they should stick to running their "own" airline group in their state and pull out of investing overseas because of their overall dismal record. SIA running their own airline group in their own backyard where they make consistent profits is their "Bread and Butter".

[Section28- BE]

kris-

Probably should NOT Do this, but- think Revenue Derived/or Delivered/able and/or Potential/ along with Hull-Values at 'this' time (ref: 9/11 as an example...) underpinning the Balance Sheet- Right NOW, with Nil 'Meaningful Revenue Contribution' let alone 'what' an airframe maybe/maybe NOT 'worth' right Now.

'The' BURN does not stop, by grounding the Show.....

"ASIC have a guide for directors which gives the penalties for trading whilst insolvent and also lists warning signs of insolvency."- and Yes they sure DO, 'reckon' like times gone by 'that' shall be where the rubber meets the road.... with 'the' said Directors.

All the BEST to you 'all' and truly Do mean THAT- the media on shareholders concern/front-up..... 'in' my 'view' is telling!!!!

Rgds and Best Wishes TO 'All' at this time.
Stay Safe and Well.
S28- BE
(may 'pull' this sucker..... FYI)

Quote ex (kris's) AFR link:Shareholders walk awayHowever, Street Talk has reported that shareholders Singapore Airlines, Etihad Airways, HNA Group and Nanshan – collectively holding 80 per cent of Virgin's equity – have decided not to pump more cash into Virgin. (https://www.afr.com/link/follow-20180101-p54jwg)

The four are all dealing with their own virus-related issues. Yet a fifth shareholder, Richard Branson's Virgin Group, had not decided either way to inject more capital into the business of which it owns 10 per cent.

Mr Branson is currently seeking a £500 million ($988 million) bailout from the UK government for his Virgin Atlantic airline, in which he retains a majority stake......

[wondrousbitofrough]

They could be running a limited network now. Just read that there are 1500 cruise pax stuck in WA due no flights. Money for jam.

If you were the boss, wanting to save every cent possible, what would you do? Throw a few flights at them or wait for the government to offer some financial incentive to repatriate them?

After having a few close calls, they're starting to earn the nickname 'The Tenacious V'

[B772]

VA buying back 35% of Velocity last October for about $700M using borrowed money has come back to haunt them. In conjunction with this loan 750 employees were retrenched to pay the interest on the loan each year.

[Blueskymine]

VA buying back 35% of Velocity last October for about $700M using borrowed money has come back to haunt them. In conjunction with this loan 750 employees were retrenched to pay the interest on the loan each year.


Wouldn’t the buck stop with the guy who sold it? I mean the QF FF program is a licence to print money.

[non_state_actor]

VA buying back 35% of Velocity last October for about $700M using borrowed money has come back to haunt them. In conjunction with this loan 750 employees were retrenched to pay the interest on the loan each year.

I would agree that is going to look in hindsight a very poor decision. I wondered at the time how such programs can be valued at what they are given it is just a parasite on an airline and has no real independent value of it's own apart from an airline. How can it be valued at 2 Billion dollars one year and 6 months later be worth zero? How is that value accurate of a business that doesn't actually generate anything independently? I am sure it is all 100% correct from an accounting point of view but it just seemed at the time a case of the Emperor has no clothes.

Then of course there is the $9 000 000 bonus to the Velocity CEO for essentially turning up each morning. That alone is going to look pretty stark if the whole thing sinks in a couple of months.

[Berealgetreal]

Hindsight bumghetti would have stayed at QF or gone to ruin some other company.

[ozbiggles]

Valid points all over here. Maybe another way to look at is not how they got to where they are but what it will look like when and if they go under when it seems 1.4 Billion might be enough to get to the other side. Keeping in mind, Qantas will have their hand out too shortly.
if Virgin cease to exist we lose a large force multiplier for the economy when the wheels start to turn. Half empty terminals, in excess of 10,000 people who used to be highly taxed now on the dole, Swissport and Aerocare gone, half the income for ASA gone and a monopoly player who can set fees at what ever level they choose for pax and freight for the foreseeable future. It will be a foreign entity if a 2nd player comes in and it won’t be for a long time...one of the few sure things we can predict I think and why would they bother anyway to come up against a Government backed monopoly mostly l Australian owned entity. This is why I bought Qantas shares at 2.10 because even though I don’t want to see it, I’ve put my money on it.

I’d like to see the current shareholders take a hair cut, the board get removed for years of poor oversight and an Australian entity step in with a near clean sheet but I haven’t seen many Unicorns recently.

[yigy2]

https://cimg1.ibsrv.net/gimg/pprune.org-vbulletin/828x1234/62c5d1b5_0dd4_4b2b_851d_12adec37c916_86d43f8f627944f05072cb6 39171a5847992f13b.jpeg
QF received a government loan back in 1993
https://cimg4.ibsrv.net/gimg/pprune.org-vbulletin/828x1114/90eed4b2_3533_4e9a_9aa2_edb448de9328_696b9659d4630d83c91d3d2 b4bbc2a0f970bf1ff.jpeg
They are 35.78% foreign owned and three times the size of Virgin Australia

[Denied Justice]

If this does end up as a monopoly, the government needs to re-regulate to prevent QF from financially raping the consumer, until a genuine competitor enters the market.

[longjohn]

So when Bumghetti was Father Christmas, signing off EA’s for more $$, was anyone here knocking him back?

Or Brett Godfrey before him, who pretty much gave the Engineers everything they asked for and then went for the door?

I seem to remember only a few short years ago hearing about the incredible success of ‘Il Duce’.

Maybe some of the unions could take some responsibility here...... I wonder how the AFAP feel after their fight with TT only a short time ago..... I wonder how ridiculous they feel now? Or not......

Just saying

[B772]

Now we know why Tiger was let go. VA were paying approx. $2M per year for the use of the Tiger name. Unconfirmed report is that VA are paying Richard Branson north of $60M per year for the Virgin name.

[junior.VH-LFA]

If QF does end up a monopoly I wouldn't imagine it will be one for long; I've been confused to be honest where the idea comes from that VA leaving the scene will mean Qantas is unchallenged forever, after all, VA is only here after Ansett fell by the wayside.

Sure, it might take a while, but it would be nice to see Alliance or another Australian owned operator take the mantle if required.

[Alfie.floor]

So when Bumghetti was Father Christmas, signing off EA’s for more $$, was anyone here knocking him back?

Or Brett Godfrey before him, who pretty much gave the Engineers everything they asked for and then went for the door?

I seem to remember only a few short years ago hearing about the incredible success of ‘Il Duce’.

Maybe some of the unions could take some responsibility here...... I wonder how the AFAP feel after their fight with TT only a short time ago..... I wonder how ridiculous they feel now? Or not......

Just saying
That’s a pretty insensitive comment to make at this point in time. None of the TT pilots have been paid for the redundancy yet! So it’s not just VA pilots that are in this mess!

[Toruk Macto]

Sure, it might take a while, but it would be nice to see Alliance or another Australian owned operator take the mantle if required.
(https://www.pprune.org/newreply.php?do=newreply&p=10750817)
Australia won’t have awhile once the green is given to get back to work . Governments will be stimulating their economies , mines will be ramped up and lots of pent up holiday makers probably looking at flying domestically .
The government won’t be happy to wait awhile for a new RPT company to find its feet , purchase aircraft and train crew . Should VA fail , probably ? Would the economy be $1.4B better off if virgin where around next year ? More than likely .

[morno]

https://cimg1.ibsrv.net/gimg/pprune.org-vbulletin/828x1234/62c5d1b5_0dd4_4b2b_851d_12adec37c916_86d43f8f627944f05072cb6 39171a5847992f13b.jpeg
QF received a government loan back in 1993
https://cimg4.ibsrv.net/gimg/pprune.org-vbulletin/828x1114/90eed4b2_3533_4e9a_9aa2_edb448de9328_696b9659d4630d83c91d3d2 b4bbc2a0f970bf1ff.jpeg
They are 35.78% foreign owned and three times the size of Virgin Australia

Wasn’t QF owned by the government at this time anyway? Hardly any similarities between it and what VA want now if that’s the case

[Transition Layer]

Good to see we finally agree on something morno :D ;)

[No Idea Either]

Showing your age Junior......

[junior.VH-LFA]

Showing your age Junior......

No doubt, very happy to be told I'm wrong and shown why. I don't run airlines, never even worked for one.

[Progress Wanchai]

Sure, it might take a while, but it would be nice to see Alliance or another Australian owned operator take the mantle if required.

Australia won’t have awhile once the green is given to get back to work . Governments will be stimulating their economies , mines will be ramped up and lots of pent up holiday makers probably looking at flying domestically .
The government won’t be happy to wait awhile for a new RPT company to find its feet , purchase aircraft and train crew . Should VA fail , probably ? Would the economy be $1.4B better off if virgin where around next year ? More than likely .

The domestic travel industry generates no more income for the economy than the gambling industry or the sex industry. It simply transfers money from one region to another with no net gain. In fact because of fuel, aircraft leases, insurance, internationally owned hotel chains, car hire companies, etc there’s a net loss for the nation.
International tourism is different. But it’s debatable whether we’re a net importer or exporter of international tourist dollars.

This goes to the very heart of what’s happening in Australia. 30 years of uninterrupted debt generated growth has rewired us. We’ve reset to relatively high income service careers and virtually abandoned manufacturing and producing occupations that actually generate wealth for the nation. Apart from primary industries and mining our major net importer of income is the education sector, along with the immigration sector. The last two will be in hiatus for quite awhile along with the cheap credit that has fueled our misconception that we’ve generated wealth.

We’ll all get through the other side of this in good shape regardless of what happens to our respective airlines, it’ll just be a different shape. We’ll all have less disposable income which will swing the pendulum away from service industries back to production and manufacturing. It’s probably a reset that was overdue and would have happened anyway.

[dontgive2FACs]

The domestic travel industry generates no more income for the economy than the gambling industry or the sex industry.

Gives me an idea for an airline... Leather-bound crew with stilettos and on board poker machines!

Talk about force multiplier! :hmm:

[Berealgetreal]

Wasn’t QF owned by the government at this time anyway? Hardly any similarities between it and what VA want now if that’s the case

Exactly, Qf was on the tit for 70 years and Virgin is asking for a LOAN from a government that left the borders open despite a known threat and approaching pandemic.

[crosscutter]

Virgin is asking for a LOAN from a government

Be real get real...the irony.

[morno]

Exactly, Qf was on the tit for 70 years and Virgin is asking for a LOAN from a government that left the borders open despite a known threat and approaching pandemic.

First of all, you can’t compare the two because the government OWNED QF. That’s the same as if the owners of Virgin were to chip in (like they’re supposed to).

Virgin is asking for an unsecured loan. If Virgin were to fold up, there isn’t enough of the company left to repay the loan.

Take the emotion out of it and look at it logically

[Vindiesel]

https://cimg0.ibsrv.net/gimg/pprune.org-vbulletin/577x744/capture_eff53847636dc01842354a709c0a9e960cb4e6ca.png

[34R]

I can't believe people are attempting to draw parallels between floating Qantas and the current predicament VA now faces.
That's about as misguided as the childish PR campaign Virgin have been wasting their money on with full page adds in the print media and endless change.org campaigns on facebook.

But if you want to draw comparisons to the $1.35 billion that memo speaks of, when the remainder of the Qantas float proceeded in 1995, the government received A$1.45 billion in proceeds after the public share offer took place.
I doubt they will see a similar return on their investment this time around, particularly if the travel ban remains in force for another 6-10 months.

[Berealgetreal]

Hmmm... lets see, government ownership in the country you operate in, including the lion's share of all the government contracts for say 98 years or multiple conflicting owners brought about because of a personal vendetta between two short men from Qantas group? What a leg up Virgin has had!

The irony will be when international hasn't recovered and half your workforce is gone whilst you spent time hanging **** on a tiny competitor and its staff during a particularly tough time. Keep praying for the VA failure.

Personally I hope all the share holders get wiped with their debt and a new owner turns up excluding the need for help from the tax payer. That, in my opinion, would be the best outcome.

Irony is the debt was racked up by a guy that worked for QF his whole life, left with millions in his pocket leaving 10,000 staff clinging to their jobs while competitor sinks the boot in. Heard of karma? Have another crack!

[Des Dimona]

Maybe the board at Brisbane Airport needs to examine the credentials of one of its members recently departed from VA and consider whether he should be replaced. :ok:

[John Citizen]

spent time hanging **** on a tiny competitor

Virgin/Branson was renowned for hanging **** on and laughing at the competitor, especially when he tore up that cheque from Ansett with a big happy arrogant smile.

Richard Branson tears a $240 million cheque (https://www.smh.com.au/business/the-economy/sir-richard-branson-the-excitement-of-saying-yes-20151102-gkok9a.html)

As someone else here mentioned, they even celebrated the collapse of Ansett.

Karma hurts.

https://cimg8.ibsrv.net/gimg/pprune.org-vbulletin/729x410/branson_fdd0efc544f4777f78a1d022996035310eec05eb.jpg

[krismiler]

Now considering a move to Melbourne.

https://www.afr.com/street-talk/virgin-australia-mulls-interstate-move-to-help-save-company-20200416-p54kal

Virgin Australia is considering moving its corporate head office and Velocity Frequent Flyer businesses to Melbourne as part of its bid to save the company.

It is understood Virgin's board has discussed packing up the company's Brisbane headquarters and moving south, in a move that would impact an estimated 1500 employees.
https://static.ffx.io/images/$zoom_0.126%2C$multiply_0.582%2C$ratio_1%2C$width_378%2C$x_0 %2C$y_0/t_crop_custom/e_sharpen:25%2Cq_85%2Cf_auto/51463e24fb72a195b339b038696d13b36952f766Melbourne: home of the MCG and... Virgin Australia? Joe Armao

Likewise, the plan would see it also take Velocity Frequent Flyer to Melbourne, which would impact another 200 or so jobs.

It is understood Virgin reckons moving both arms to Melbourne could have a material impact to the company's bottom line, at a time when CEO Paul Scurrah and his team are trying to slash costs to ensure the airline owner survives COVID-19 and what could be a prolonged economic downturn.

While there are plenty of balls in the air at Virgin, the move is one option that could help the airline re-set its cost base for the long-term.
It is understood a Melbourne move has come up in discussions with creditors and investors as something under consideration. It is seen as a "Hail Mary" option and nothing has been finalised, sources said. https://static.ffx.io/images/$width_620/t_resize_width/e_sharpen:25%2Cq_85%2Cf_auto/716cf2221b7bffe0bd9832e0e50e50bce25db2c1Paul Scurrah, CEO of Virgin Australia. Peter Braig

It comes as Virgin is fighting for survival and seeking measures to quickly reduce its $5 billion debt load. It is in talks with lenders, shareholders, potential investors and, perhaps most importantly, the government, in an effort to secure funds.

Virgin is believed to be seeking about $1.4 billion in fresh capital to spearhead a financial restructure. It went to the government seeking that amount a fortnight ago (https://www.afr.com/companies/transport/government-likely-to-reject-virgin-s-opening-1-4b-bailout-plea-20200331-p54fik), and is exploring other avenues.

Its existing shareholders have declined to tip in fresh funds, as Street Talk revealed on Wednesday, (https://www.afr.com/street-talk/virgin-shareholders-pass-up-deal-search-moves-to-white-knights-20200415-p54jwg) and its bankers are now trying to rustle up interest among other potential investors.

Virgin had $4.8 billion in interest-bearing liabilities at December 31 and $900 million in unrestricted cash and short term investments. Its next debt maturity is a $US350 million ($546 million) bond due in October 2021.

Its shares are in a trading halt while the various discussions take place. The company's equity value was $720 million prior to the halt, although it is widely recognised by major shareholders that their investments will be wiped out as part of the looming restructure.

[Mike_Hunt]

How exactly would this save money? I would've thought commercial rents would be much higher in Melbourne than Brisbane, not to mention relocation costs, redundancies for staff that can't move, etc etc

[Paragraph377]

Maybe the board at Brisbane Airport needs to examine the credentials of one of its members recently departed from VA and consider whether he should be replaced. :ok:
Never. People like IL Douche seem to be revered for some reason. It’s all about ‘the look’, look at me I was a CEO! Hardly makes a person credible. Some of the worlds biggest profile CEO’s are complete fu#kwits, but have the gift of the gab. Goes to show that you can stay with the one employer all your life, working your way from the mail room to the Board room and STILL be a completely useless moron.

[krismiler]

How exactly would this save money? I would've thought commercial rents would be much higher in Melbourne than Brisbane, not to mention relocation costs, redundancies for staff that can't move, etc etc

Victorian government money possibly ? State incentives for businesses to establish there and create employment. Sydney has its own airline in Qantas so Melbourne should have one as well.

[ECAMACTIONSCOMPLETE]

Maybe the Victorian govt is willing to give financial assistance. Labor in charge in Vic, who seem to be more in favour of a bailout for virgin than the Libs.

[topend3]

Maybe the Victorian govt is willing to give financial assistance. Labor in charge in Vic, who seem to be more in favour of a bailout for virgin than the Libs.

Of course Fed Labor are in favour of it, they need a point of difference at a time they are gasping for air and desperately trying to be relevant. Crises are a bad time for oppositions.

[-41]

Victorian government money possibly ? State incentives for businesses to establish there and create employment. Sydney has its own airline in Qantas so Melbourne should have one as well.
given PS has a strong Labor connection I assumed QLD would have given them more free money, maybe the communists in Vic are offering more $$$$.

Have the TT and VAINZ redundancies been paid?
Funny how they can’t pay the employees but executives always get their $9.9million payouts immediately. I hope Karl is doing alright in these harsh economic times whilst on his gardening leave until June.

The taxpayers should not bail out VAH, it would be rewarding gross mismanagement by the current VAH board and executive.

[bouncebabybounce]

given PS has a strong Labor connection I assumed QLD would have given them more free money, maybe the communists in Vic are offering more $$$$.

Have the TT and VAINZ redundancies been paid?
Funny how they can’t pay the employees but executives always get their $9.9million payouts immediately. I hope Karl is doing alright in these harsh economic times whilst on his gardening leave until June.

The taxpayers should not bail out VAH, it would be rewarding gross mismanagement by the current VAH board and executive.


VANZ have apparently been paid....
TT still waiting like usual.

[PoppaJo]

They were looking at moving into the new Target Office building in Melbourne (Williams Landing) were they not?

If they want to attract quality talent inside the office then they need to be in Melbourne or Sydney. Whether it’s Data, IT, Creative, Finance, whatever, the best of best reside in these two cities. Target was previously based in Geelong. They have now moved to Melbourne in a bid to secure better talent from local and abroad. They built a new office next to the train station.

Dan has a habit of throwing cash around, the taxpayer already pays for Jetstar’s red ink at Avalon for the next decade, shouldn’t be an issue.

[Rashid Bacon]

As someone else here mentioned, they even celebrated the collapse of Ansett.

Karma hurts.

What goes around comes round............

It was disgusting watching a small minority of Virgin Blue staff dancing around the Ansett collapse. As one who went through this terrible time, I really feel for the vast majority of Virgin pilots who would equally be disturbed by the actions of some in past times.

Australia needs 2 airlines and I hope VA survives in one form or another. :ok:

[Buster Hyman]

How exactly would this save money? I would've thought commercial rents would be much higher in Melbourne than Brisbane, not to mention relocation costs, redundancies for staff that can't move, etc etc
Am happy to be corrected but do they own the old Ansett IOC & TT Ops Centre? If so, it makes perfect sense. A reduced operation that could, in all likelihood mirror the size of TT's operation would suit these buildings. 2x maintenance hangars attached & access to the old Bae Hangar and, of course, MJB. A fresh start, via Administration, would give them the opportunity to renegotiate Awards etc, IF it becomes a new entity. There's a whole bunch of people in MEL that ran TT who'd be willing to sign on I imagine.

What I'm unaware of is how invested in their BNE properties they are. Anyone care to enlighten?

[flyingfrenchman]

Very sad, starting to see the strain and stress of the situation coming through from some contributors here. Look after yourselves, influencing the Prune audience really doesn’t achieve anything. Clutching at straws re QF float and displaying desperation isn’t the way to go for your health and happiness.

[Toruk Macto]

Victorian government lost to Queensland government when they originally setup . From memory Queensland offered 10 years of reduced or no state taxes . If it’s something similar to get the operation transferred to Melbourne then it’s not a bailout or federal money so QF should be happy .

[-41]

Very sad, starting to see the strain and stress of the situation coming through from some contributors here. Look after yourselves, influencing the Prune audience really doesn’t achieve anything. Clutching at straws re QF float and displaying desperation isn’t the way to go for your health and happiness.


same can can be said about the executive at VA spending cash on pointless advertising campaigns lashing out at QF.

[Transition Layer]

Virgin headquartered in Melbourne? Sunfish will be beside himself with excitement!

[Sunfish]

Definitely!

[Tommy Bahama]

https://mumbrella.com.au/campaign-review-virgin-australias-plea-for-help-and-furphys-extremely-campaignable-idea-624886

More wasted money by the village idiots. At least a move to Melbourne might change the permanent holiday mode the place seems to operate in. Even with another 1.4B the world is going to be economically decimated for years so no matter how you rearrange the deck chairs eventually you will have to pay the piper.

[Pedalz]

Unfortunately I feel the argument to support 'foreign owned' is moot with the amount of industries soon to be hat in hand to the Government behind VA and the %GDP costs of Job Keeper etc. There will be fewer and fewer levers for the government to pull.

Save the bickering and look after your mates... best of luck to everyone at VA and fingers crossed for some positive news

[Denning]

If the worst does happen and Virgin go under, from Qantas perspective they have a steady source of qualified pilots looking for work in the future if they need them. Added to the fact that likely Qantas’ future crewing needs will also reduce to some degree, does this signal the end of the cadet school plan (e.g Toowoomba)

Would Qantas want to spend the money on setting up and running the schools bearing in mind the future state of the industry?

denning

[crosscutter]

https://www.livewiremarkets.com/rails/active_storage/representations/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaHBBaDRJIiwiZXhwIjpudWxsLCJw dXIiOiJibG9iX2lkIn19--bac110ff11e31f1f2c9cc131c39dca8c2d2368a7/eyJfcmFpbHMiOnsibWVzc2FnZSI6IkJBaDdCam9UY21WemFYcGxYM1J2WDJa cGJHeGJCMmtCeUdrQnlBPT0iLCJleHAiOm51bGwsInB1ciI6InZhcmlhdGlv biJ9fQ==--b6db17f3a5703fdeefb80ccf651ccc74fc232752/JR.jpg (https://www.livewiremarkets.com/contributors/jonathan-rochford)JONATHAN
ROCHFORD (https://www.livewiremarkets.com/contributors/jonathan-rochford)

Narrow Road Capital
FOLLOWVirgin Australia has been poorly managed and poorly capitalised for years. Whilst the Coronavirus lock-down is the most recent cause of its woes it is merely the latest in a long list of excuses. Qantas had its turn with the begging bowl in early 2014, I wrote then (https://www.narrowroadcapital.com/memos/qantas-given-taxpayer-assistance-will-cost/) that the Australian Government should deny it a bailout as it wasn’t necessary. A bailout would have gotten in the way of Qantas fixing its problems, which it ultimately did without government help. The situation is somewhat different for Virgin, it is most likely to go into administration without a bailout. However, insolvency is the best pathway for Virgin as it is the best opportunity to fix the longstanding problems.

The Problems with Virgin

Virgin’s structural problems are the result of years of mismanagement. It is trapped between being much more expensive than Jetstar and with a lesser offering than Qantas, although routinely being almost as expensive as Qantas. As a result, Virgin has consistently struggled to attract the high paying customers and load factors that would take it from being a loss maker to a strong competitor.

Virgin’s ongoing financial problems are no secret. After an IPO at $2.25 in 2003, its shares have rarely traded above $0.50 in the last decade. The company has pursued growth over profits adding marginal routes that weighed down the good business it had servicing the capital city routes. This failed strategy has left the airline overloaded with aircraft. The sale and subsequent repurchase of part of the frequent flyer business has left it loaded with debt, with most of the fleet and the frequent flyer business locked up by secured creditors.

The Alternatives to Insolvency

Virgin is now pursuing a dual pathway to attempt to remain solvent, searching for fresh equity whilst at the same time negotiating with lenders for a debt restructuring. Whilst either of these, or both in combination would give the business more time, both are likely to be fruitless endeavours. Virgin needs to go through a deep restructuring of its entire business including;

· Handing back/selling off aircraft it will not need in the medium term

· Making redundant staff it cannot put to work in the medium term

· Negotiating with suppliers for cheaper goods and services

· Reducing office space and corporate overheads

All of this needs to be done at the same time as the business is burning through cash, estimated to be at a rate of $5-7 million per day. Without most of the fleet being back in the air and carry near capacity loads, a situation extremely unlikely in 2020, Virgin will simply run out of cash. Even if all the unsecured debt was converted to equity it would make little difference to the cost base. The only feasible option to right size the business is voluntary administration.

The Earlier the Better for Insolvency

Given Virgin has limited cash left and is rapidly burning through it, an insolvency in a matter of weeks offers the best prospects of preserving a broad business. The less cash that is left when insolvency begins, the more likely it is that Virgin will follow in the footsteps of Ansett and be sold off for scrap. With a decent starting cash balance and in the current economic environment administrators would have a strong hand to:

· Cut a new deal on the greatly reduced number of aircraft that will be needed; aircraft lenders and lessors will be reluctant to take back aircraft given the current glut and economic outlook

· Reduce staff numbers and cut staff costs back to levels in line with a low cost carrier; remaining staff will be glad to still have a job

· Negotiate with airports for reduced charges; the alternative for airports is being left with a dominant customer that is already throwing its weight around

· Slash debt levels and reduce the balance of unsecured creditors

· Hand back office space and eliminate unnecessary corporate overheads



A leaner Virgin, with a lower cost base and greatly reduced liability position, has good prospects of attracting new owners and winning back customers. Only an insolvency can deliver this outcome. The alternatives of fresh equity, a debt for equity swap or a government bailout, if put in place without insolvency, would all delay and obstruct the necessary restructuring and increase the risk that Virgin ultimately ends up like Ansett.

[MelbourneFlyer]

I don't think Virgin Australia is serious about a move to Melbourne. So expensive to uproot and re-locate a company like an airline, compared to a law firm that's just a bunch of offices for example. Plus they would lose so many staff who live in sunny relaxed Brisbane, have kids in school there and probably extended family there, and would NOT want to swap that for Melbourne, so Virgin would need to go through the very expensive exercise of finding and hiring and training up new staff. No, I think Virgin is just floating this idea to see what deal the QLD government is willing to cut them. It's a hollow threat.

[VR-HFX]

The Jonathan Rochford analysis is spot on. As it stands the current shareholders have indicated they will not put in another penny. The Australian Government will also do nothing. What they have done for the industry is useless as both majors are effectively grounded. As it stands, VAH will simply run out of cash in 3 months.

This is deja vu all over again.We have had this debate in 2014 when Joyce went to Canberra with his begging bowl. Certainly QF was not in the same situation as VAH but discussion at the time is worth re-visiting. It centred around insolvency laws and whether we need a Chapter 11 type system in Australia. This is a system David Bonderman of TPG used to refer to as the "car wash".

Our insolvency laws have not changed since 1993. As they stand they invariably lead to viable businesses failing and insolvency firms making a motza...think Ansett here.

Creditors all seek to to protect their OWN position in the short-term without coordinating with other parties. They actually work against their own positions by being so short-sighted. The administrator's sole task (apart from making money for itself) is with recovering money for creditors. This single-minded approach leads to the almost instantaneous destruction of any residual value in the company and just cents in the dollar for creditors.

The other major problem with our system is that management is totally sidelined whereas Chapter 11 allows the company to put its affairs in the hands of trustees without having to windup the business and lose key contracts. A company has no chance of recovering once contracts are suddenly voidable.

There is also the issue of director liability if a company trades while insolvent. They will put a company into early administration to protect themselves.

That said, voluntary administration is probably the best option to save the business and make it a viable investment option for one of the big private equity operators with experience in the aviation sector such as TPG. The clock is ticking and if this process drags on until mid year, VAH will be scrap and shareholders and creditors alike will be wiped out. Residual value goes to the liquidators in our system.

Sad indeed but sometimes the facts and the truth are just that.

[Blueskymine]

The problem is while this plays out, there’s no consumer confidence on the other side when flights resume.

Both airlines need a government guarantee for ticketing - without it, even if Virgin do manage to survive, they won’t survive the upswing at the end when people just don’t have confidence in forward bookings.

The only thing that slightly amuses me about this whole fiasco is perhaps Perth airport May have to close T1&2 and send the internationals into T3 for a spell....

[Foxxster]

Yes that Rochford article is spot on.

the question is what happens to the Australian domestic airline scene in the mid term.

We may see a revived Virgin of some sort with new owners or given the outlook and the likelihood that nobody would want to invest in any airline , will we see the federal government relaxing the laws to allow the void to be filled by foreign airlines being allowed to operate domestic routes.

given Friday evening is a prime time for bad news to be released, can we expect an announcement from Virgin confirming voluntary administration tomorrow..

[ampclamp]

Virgin placed in an indefinite trading halt.Trade has been halted for an indefinite period as announced just before trading began today by ASX listings compliance adviser Neel Bhowmick.

"The securities of Virgin Australia Holdings (VAH) Limited will be suspended from quotation immediately under Listing Rule 17.2 at the request of VAH, pending the release of an announcement regarding its ongoing financial assistance and restructuring alternatives,"

[Section28- BE]

ASX Announcement 16/04/2020 link: https://www.asx.com.au/asxpdf/20200416/pdf/44gzq1xk1ytv35.pdf

Part B of announcement here:

"b) requests that the voluntary suspension remain in place until the Company makes an announcement to the market regarding this, or the expiry of 7 days from today's date, whichever occurs first;"

Rgds
S28- BE

[John Citizen]

A reporter just asked the PM (during a coronavirus update) if he will save Virgin.

He said any help will be on a "sector basis". This basically means NO I think.

[Pearly White]

A reporter just asked the PM (during a coronavirus update) if he will save Virgin.

He said any help will be on a "sector basis". This basically means NO I think.
What kind of sector? Industry sector? Or city pair basis?

[LostWanderer]

I think he meant there would be funding and general assistance to various sectors such as hotels, retail, airlines - as they have already done...and so on, but nothing is coming to directly save any one company or chain from financial hardship.

I read that as another pretty solid confirmation yet again that there is no government bailout for VA.

[ECAMACTIONSCOMPLETE]

At the end of the day, the govt doesn’t have the ability to save every business in every industry from the effects of COVID 19. The economic impacts are similar to the health impacts, those that were healthy leading into the crisis have a good chance of surviving, those with pre-exisiting conditions may find the pandemic to be fatal.

[Toruk Macto]

But we still try to help the elderly , poor and unfit people who have not looked after their health but now have coronavirus? Or we decide they not worth it ?

[warrior92]

Sector wide... Aviation package much like The US?

[Oriana]

But we still try to help the elderly , poor and unfit people who have not looked after their health but now have coronavirus? Or we decide they not worth it ?
Wow - that is a very long bow, even by the standards on these boards.

[ECAMACTIONSCOMPLETE]

But we still try to help the elderly , poor and unfit people who have not looked after their health but now have coronavirus? Or we decide they not worth it ?

$1.4 billion for 8,000 jobs. That’s $175,000 per job. So to be quite cold, no, they’re not worth it. Unemployment rates are conservatively estimated to reach at least 10%, or around 800,000 workers. Virgin employees are a drop in the ocean compared to the economic effects of this virus.

10 years of mismanagement are the reason they’re going bust, not the govt.

[chookcooker]

At the end of the day, the govt doesn’t have the ability to save every business in every industry from the effects of COVID 19. The economic impacts are similar to the health impacts, those that were healthy leading into the crisis have a good chance of surviving, those with pre-exisiting conditions may find the pandemic to be fatal.

So the strong should make a sacrifice to help the more vulnerable?
because doing that’s why we’re all in this **** at the moment.

thanks for supporting VA assistance

[34R]

But we still try to help the elderly , poor and unfit people who have not looked after their health but now have coronavirus? Or we decide they not worth it ?

Wow!!

Ladies and gentlemen.... we have a winner

[The Bullwinkle]

10 years of mismanagement are the reason they’re going bust, not the govt.
Absolute bull****!!! If it wasn't for COVID-19, Virgin would not be going bust!

[Matt48]

Absolute bull****!!! If it wasn't for COVID-19, Virgin would not be going bust!
No, but sadly they were circling the drain.

[chookcooker]

Absolute bull****!!! If it wasn't for COVID-19, Virgin would not be going bust!
bingo.
anyone suggesting that it was a foregone conclusion, I assume had taken a short on the position to back up their confidence. Should be laughing now.

otherwise they’re speaking with revisionist bull****.

[junior.VH-LFA]

Absolute bull****!!! If it wasn't for COVID-19, Virgin would not be going bust!

So the billions of dollars of debt accrued before this is irrelevant?

ECAM, very eloquently put. Exactly my thoughts; but I wouldn’t have been able to convey it as well.

[The Bullwinkle]

So the billions of dollars of debt accrued before this is irrelevant?

ECAM, very eloquently put. Exactly my thoughts; but I wouldn’t have been able to convey it as well.
Completely irrelevant! The company was turning around under a competent new leader. That's what he's good at and that's what he was doing!

[PoppaJo]

Absolute bull****!!! If it wasn't for COVID-19, Virgin would not be going bust!

True, but if they didn’t screw up the last decade, they wouldn’t be begging for cash, bringing in debt corporates, crying administration.

Had they stuck to their profitable and debt free previous roots, of Virgin Blue, and went down the Alaska of JetBlue type of model, without gutting the joint to the tune of billions, they might have a few billion bucks on the balance sheet, profitable, and little debt. They could have gone to lenders tomorrow and secured cash against their aircraft. They could have secured billions on finance, if they were in a better position. They can’t do that today because they already did that, to fund a airfare war.

[normanton]

$5b in debt. Asking for another $1.4b that will never be repaid. Where does it end? The government with a slice of equity in a broke company? Please.

Fold it up. Start again. Drop the royalty payment bull**** to Tiger and Branson.

The interest alone on a $1.4b loan would cripple any turn around PS was making.

[Turnleft080]

https://www.worldometers.info/coronavirus/country/australia/

Take a good look at all these graphs and project them. By a months time or middle of June the Virus will be eradicated.
The Lancet also indicates this on their website. I also agree to this because viruses get weaker and weaker over time.
If that's the case we will be into only week 2 of the job keeper allowance right at the time everyone is starting to go back to work.
i.e payroll will be reverting all salaries. Hence the 130 billion would be hardly touched. Catch my drift or am
I being too situationally aware.

And another thing: Where the F#@*K are the Greens. Not one mention in the last 4 weeks until I typed it in 14 words ago.
Hiding in there rabbit holes like they did during the bushfires. They stand for F@#*K all and always have. They are
friggen cowards, wimps, useless waste of time and money and couldn't give a shizen about any of our jobs.
I've saying that for 20 years.

Directimped. I forgot about their website. I had a quick look nothing new there. Money grows on trees party are still
in hibernation Adam will come out of the bunny hole in August.

[junior.VH-LFA]

For the record, I don’t want VA to fall or anyone to lose their jobs.

I just think any support VA gets needs to be part of an industry wide package, not a direct government intervention which is essentially buying into VA’s considerable debt. I don’t think it’s fair and I think it would set a precedent for a lot of other private enterprises in Australia that the government will bail them out during COVID, regardless of their previous financial situation. As cliche as it is, the Govt shouldn’t be picking winners and losers, just helping out the sector evenly.

For people that work there, that still ******* sucks and I understand that totally.

For the liberal government at the moment, I imagine the discussion is centring around conservative economic values vice the potential electoral hurt and slower tourism industry that results from less flights and competition.

From what Scomo has said publicly though, I think they’ve made their decision already.

Best of luck to everyone.

[directimped]

And another thing: Where the F#@*K are the Greens. Not one mention in the last 4 weeks until I typed it in 14 words ago.
Hiding in there rabbit holes like they did during the bushfires. They stand for F@#*K all and always have. They are
friggen cowards, wimps, useless waste of time and money and couldn't give a shizen about any of our jobs.
I've saying that for 20 years.
https://greens.org.au/covid19

[veetu]

So the strong should make a sacrifice to help the more vulnerable?
because doing that’s why we’re all in this **** at the moment.

thanks for supporting VA assistance
For “those” ....” do we decide they are worth it ? “... posting here with their contributions to this existing condition regarding the hardship that many of us will encounter and the imminent downgrading of our relative peaceful and prosperous life please tell your elderly family members or the elderly population in general that
you are willing to sacrifice them for your possible better life in the future .Sacrificial lambs.Those that endured the Depression and two World Wars with the associated lives lost to secure your future .......Well........I’m lost for words.

[Icarus2001]

Untangle your knickers and read the ANALOGY again.

[chookcooker]

For “those” ....” do we decide they are worth it ? “... posting here with their contributions to this existing condition regarding the hardship that many of us will encounter and the imminent downgrading of our relative peaceful and prosperous life please tell your elderly family members or the elderly population in general that
you are willing to sacrifice them for your possible better life in the future .Sacrificial lambs.Those that endured the Depression and two World Wars with the associated lives lost to secure your future .......Well........I’m lost for words.
that whistling you hear isn’t tinnitus, it’s you spectacularly missing the point.
well done

[Saintly]

I need some advice:

On Saturday 11th of April: I rang VA...they said my flight was a non refundable flight (PER-MEL-PER in November). I told them to put my flight into flight credit which they did. But then I asked them what if VA goes under..then my flight credit ceases to exist...they said they are not thinking that far ahead. I then told them to reinstate the flight as normal and if VA is around still in November when my flight is scheduled then I will still fly to MEL. I'll watch and keep an eye on the situation. Flight is still 7 months away. I also had hotel room booked but that isnt complicated as I pay on arrival. So really its just the airfare which is a bit sticky but i do have 7 months to keep an eye on things and I'll re-assess it in Sept/Oct.

But due to the current situation it seems VA are not looking at all. Will VA go under in a matter of weeks or months? Should I call VA and ask them to cancel my flight and put it into flight credit for 12 months.

Any advice is appreciated.

Cheers.

[crosscutter]

You really don’t have many options. If it were me I’d be keeping the booking. As you said it’s 7 months away.. there’s plenty of water to flow under the bridge yet... but for a few reasons (credit card policies for flight cancellations, possible transfer of pax to other services) and others not worth going into, it’s probably advantageous to have a booking rather than a flight credit. JMHO

[34R]

Good news about to be announced to the market. 64 domestic flights a week each for VA, QF and JQ to start tomorrow.

[missy]

MELBOURNE

• Melbourne / Adelaide (three return services per week)

• Melbourne / Brisbane (seven return services per week)

• Melbourne / Canberra (three return services per week)

• Melbourne / Perth (seven return services per week)

• Melbourne / Sydney (seven return services per week)

BRISBANE

• Brisbane / Melbourne (seven return services per week)

• Brisbane / Sydney (seven return services per week)

• Brisbane / Cairns (three return services per week)

• Brisbane / Mackay (five return services per week)

• Brisbane / Rockhampton (three return services per week)

• Brisbane / Townsville (three return services per week)

SYDNEY

• Sydney / Melbourne (seven return services per week)

• Sydney / Brisbane (seven return services per week)

• Sydney / Gold Coast (three return services per week)

CANBERRA

• Canberra / Melbourne (three return services per week)

ADELAIDE

• Adelaide / Melbourne (three return services per week)

PERTH

• Perth / Melbourne (seven return services per week)

• Perth / Broome (three return services per week)

• Perth / Port Hedland (two return services per week)

• Perth / Newman (two return services per week)

• Perth / Karratha (two return services per week)

• Perth / Kununurra (two return services per week)

• Perth / Kalgoorlie (two return services per week)

[Saintly]

Good news about to be announced to the market. 64 domestic flights a week each for VA, QF and JQ to start tomorrow.

Has that been confirmed?

[Saintly]

MELBOURNE

• Melbourne / Adelaide (three return services per week)

• Melbourne / Brisbane (seven return services per week)

• Melbourne / Canberra (three return services per week)

• Melbourne / Perth (seven return services per week)

• Melbourne / Sydney (seven return services per week)

BRISBANE

• Brisbane / Melbourne (seven return services per week)

• Brisbane / Sydney (seven return services per week)

• Brisbane / Cairns (three return services per week)

• Brisbane / Mackay (five return services per week)

• Brisbane / Rockhampton (three return services per week)

• Brisbane / Townsville (three return services per week)

SYDNEY

• Sydney / Melbourne (seven return services per week)

• Sydney / Brisbane (seven return services per week)

• Sydney / Gold Coast (three return services per week)

CANBERRA

• Canberra / Melbourne (three return services per week)

ADELAIDE

• Adelaide / Melbourne (three return services per week)

PERTH

• Perth / Melbourne (seven return services per week)

• Perth / Broome (three return services per week)

• Perth / Port Hedland (two return services per week)

• Perth / Newman (two return services per week)

• Perth / Karratha (two return services per week)

• Perth / Kununurra (two return services per week)

• Perth / Kalgoorlie (two return services per week)

Again is this been confirmed?

[Saintly]

You really don’t have many options. If it were me I’d be keeping the booking. As you said it’s 7 months away.. there’s plenty of water to flow under the bridge yet... but for a few reasons (credit card policies for flight cancellations, possible transfer of pax to other services) and others not worth going into, it’s probably advantageous to have a booking rather than a flight credit. JMHO

I am also a Velocity member i have 13,700 points.

I remember when I lost 150,000 Ansett points.

[The Golden Rivet]

Yep, on news.com

[Ragnor]

This makes no sense at all! PM on TV today telling us the current lock down will continue for two more weeks then it will be reviewed. All of a sudden there is all this travel allowed. Can I now book a holiday?!

[Buster Hyman]

Absolute bull****!!! If it wasn't for COVID-19, Virgin would not be going bust!
And if it wasn't for 9/11, Ansett would still be flying today? :hmm:

[SOPS]

MELBOURNE

• Melbourne / Adelaide (three return services per week)

• Melbourne / Brisbane (seven return services per week)

• Melbourne / Canberra (three return services per week)

• Melbourne / Perth (seven return services per week)

• Melbourne / Sydney (seven return services per week)

BRISBANE

• Brisbane / Melbourne (seven return services per week)

• Brisbane / Sydney (seven return services per week)

• Brisbane / Cairns (three return services per week)

• Brisbane / Mackay (five return services per week)

• Brisbane / Rockhampton (three return services per week)

• Brisbane / Townsville (three return services per week)

SYDNEY

• Sydney / Melbourne (seven return services per week)

• Sydney / Brisbane (seven return services per week)

• Sydney / Gold Coast (three return services per week)

CANBERRA

• Canberra / Melbourne (three return services per week)

ADELAIDE

• Adelaide / Melbourne (three return services per week)

PERTH

• Perth / Melbourne (seven return services per week)

• Perth / Broome (three return services per week)

• Perth / Port Hedland (two return services per week)

• Perth / Newman (two return services per week)

• Perth / Karratha (two return services per week)

• Perth / Kununurra (two return services per week)

• Perth / Kalgoorlie (two return services per week)


I don’t know how they will
do interstate services to Perth. The WA Premier has just said the WA borders will be closed for at least 6 months.

And where is this confirmed? Edit.. just saw it... looks like it is confirmed.

[Square Bear]

Ragnor,
There are other many other reasons to travel other than a holiday. For a start there a those who are just getting out of 14 days in quarantine in different states to where they live. Now they have a way to get home.

And regards to the WA boarder closure, you don’t need permission to leave the state, and if you have valid reasons (including compassionate) you can enter under permission.

Good call by the Govt and great to see that virgin will be involved.

[Ollie Onion]

Good news for everyone to get something moving

[yigy2]

https://travel.virginaustralia.com/au/minimal-network-schedule

[PPRuNeUser0198]

https://www.abc.net.au/news/2020-04-16/virgin-australia-to-resume-flights-after-coronavirus-suspension/12155466

[dontgive2FACs]

Good news for everyone to get something moving

Something for everyone to collective high-5 about.

[B772]

I am confused. VA state:

Book with confidenceWe know there’s a lot of uncertainty with travel at the moment, so we want you to know we’ve got your back.

And then this appears:
We will always do our best to get you to your destination on time, however, we do not guarantee flight times or schedules and they do not form part of your contract with us.

What specialist thought of this. What is left of the contract then ?. Have they ever guaranteed flight time or schedules ?. Is this more Virgin poppycock ?

[crosscutter]

Qf say the same in their t and c. Nothing to see there. Happy flying. A bit of good news

[LapSap]

Kick the can down the road a bit further...

[Flava Saver]

Take the blinkers off you lot. This isn’t the white knight for VA. It’s a joint ‘break even’ operation with the government. There’s still $5 billion to sort out in debt, and VA OR QF aren’t to be making money out of this, purely to keep the nation & freight networks going. With border restrictions still in place at the moment can you honestly believe there’s a massive interest in travel tomorrow.....

[noclue]

Why did Virgin halt trading pending the release of this announcement when Qantas didn’t?

[PoppaJo]

The trading halt has nothing to do with that announcement.

[krismiler]

https://www.afr.com/politics/federal/private-equity-investors-circle-over-virgin-20200415-p54jwd

Private equity investors circle over VirginAt least two private consortia are circling to take over Virgin Australia, reducing pressure on the federal government to bail out the ailing airline.

Sources inside government and the aviation industry confirmed to The Australian Financial Review that one consortium involves a private equity investor partnered with a "a strategic airline investor".

The other is believed to be an investment bank partnered with an Australian infrastructure investor.
https://static.ffx.io/images/$zoom_0.353%2C$multiply_0.5855%2C$ratio_1.776846%2C$width_10 59%2C$x_0%2C$y_66/t_crop_custom/e_sharpen:25%2Cq_85%2Cf_auto/cf19f9844221097fc5a4efe9c98dab24a91c6fc4Virgin Australia's majority shareholders have refused to pour more money into the struggling airline. Bloomberg

While Qantas has the economic capacity to ride out the coronavirus-induced shutdown, Virgin has asked the government for a $1.4 billion loan to tide it over and threatened to tip the airline into voluntary administration (https://www.afr.com/link/follow-20180101-p54jn2) if it does not receive help.

The government has refused, believing that will end up owning the airline that was already saddled with a $5 billion debt before the crisis struck. and that was seeking a loan worth more than twice its market capitalisation.
"We want to see two airlines in the domestic market but we're not in the business of owning an airline,'' Treasurer Josh Frydenberg said on Thursday.There are many market-based options that are currently being pursued, and I would wish those discussions every success.

— Prime Minister Scott Morrison
Prime Minister Scott Morrison alluded to the interest from private equity yesterday when also ruling out a government bailout.

"We appreciate the value of two competitive viable airlines in the Australian economy,'' he said.

"Any responses the Commonwealth government will have will be done on a
sector-wide basis, and that's the way we will continue to pursue those issues.

"I'm aware that there are many market-based options that are currently being pursued, and I would wish those discussions every success."

One Virgin source said it was not the company's preference to be taken over by "corporate raiders'' with little or no airline experience.

Virgin remains in a trading halt and has appointed UBS and Macquarie to drum up an equity injection or restructure. Virgin shareholders Etihad Airways, Singapore Airlines, Nanshan Group and HNA Group, who together own 80 per cent of the company, have refused to tip in fresh funds for the airline (https://www.afr.com/link/follow-20180101-p54jpg).
Two paths aheadWithout government support for Virgin, there are thought to be two ways that the Virgin situation could play out. One of those is through a pre-agreed deed of company arrangement, which would require agreement from unions and governments, and then cleans out unsecured creditors.

It would need creditor approval, which would likely include employees, frequent flyer point holders and more.

The other would be placing Virgin in voluntary administration, which would remove any certainty around who would end up owning the airline. This option might be less politically attractive.

It is understood that the interest from the private sector prefers Virgin going into voluntary administration, enabling new investors to restructure the debt and take control by removing or shaving down the existing shareholders.

This would enable the new owners to restructure the company into one that makes a profit. This could involve significant job losses.

BGH Capital is among the most speculated private equity firms for the asset. BGH's Ben Gray ran the local arm of private equity giant TPG when it bid jointly for Qantas. BGH declined to comment.

[JetFixer]

Never. People like IL Douche seem to be revered for some reason. It’s all about ‘the look’, look at me I was a CEO! Hardly makes a person credible. Some of the worlds biggest profile CEO’s are complete fu#kwits, but have the gift of the gab. Goes to show that you can stay with the one employer all your life, working your way from the mail room to the Board room and STILL be a completely useless moron.
The current president of the USA being a prime example.

[Led Zeppelin]

Voluntary administration is the only way to clean the debt book and start again with a much smaller but low cost focused single aircraft type operation between capital cities and main regional centres

[PoppaJo]

Sunrise reports two consortiums circling at the moment.

[cloudsurfng]

Sunrise reports two consortiums circling at the moment.


Corporate raiders :bored:

[Australopithecus]

Good. I hope that you guys end up in the hands of adult management with a cogent plan to run and grow your airline.

[Fonz121]

And another thing: Where the F#@*K are the Greens. Not one mention in the last 4 weeks until I typed it in 14 words ago.
Hiding in there rabbit holes like they did during the bushfires. They stand for F@#*K all and always have. They are
friggen cowards, wimps, useless waste of time and money and couldn't give a shizen about any of our jobs.
I've saying that for 20 years.

Wtf are you rambling about? If you’re a Virgin employee then The Greens are your friend more than the libs atm.


https://cimg9.ibsrv.net/gimg/pprune.org-vbulletin/2000x2000/453b5e8f_079b_46c5_ae30_fa4e90237260_f0dd0035acf735265740a6a add118a7e71368757.jpeg

[Kiwiconehead]

Corporate raiders :bored:

But what is there to raid? It's not like the near Qantas privatisation where there was oodles of cash and lovely things to siphon off.

[B772]

Is closing Sydney Airport still a Greens policy ?. Nothing but Hippocrypts.

[IsDon01]

The only true wilderness is between a greeny’s ears.

[galdian]

The only true wilderness is between a greeny’s ears.

:D:D:D
ENCORE!

[Icarus2001]

One Virgin source said it was not the company's preference to be taken over by "corporate raiders'' with little or no airline experience.
This is hilarious for two reasons. They have a board and CEO with no airline experience. When you are in distress you don't get "preference" who rescues you.

[Sunfish]

‘’lifted from Facebook:

To all the people who don’t think Virgin Australia should get government assistance right now - take a look at what happens with an airline monopoly.

Currently Virgin Australia is operating on a very limited schedule of 6 days a week, one flight a day between Sydney and Melbourne. On Saturday there is no flight. Have a look at what Qantas is charging for a single sector between Sydney and Melbourne on a Saturday. When Virgin flys the price is $155 one way, when it doesn’t fly it’s $753 one way.

We need at least 2 airlines in Australia. Please be mindful of the devastating effect the collapse of Virgin would have on Australian travel and tourism.

[SandyPalms]

Thanks Sunfish. No better source than some random from Facebook. I guess it’s settled then.

[mostlytossas]

I'm not convinced with the argument that without Virgin air fares would go through the roof on the long term. I am old enough to remember the old days with TAA and Ansett with their cosy relationship along with APEX fares etc.
Back then if airfares were too high you made alternative arrangements to travel if on leisure,which is the bulk of travelers today. You allowed a couple of extra days to drive or catch a train or bus. There was no internet for video conferencing for business meetings.
Today is much different. Business travel is often able to be avoided. As for leisure travel if airfares go too high people will find other means. The low airfares have killed off train and bus travel. You can no longer catch a bus from Adelaide to Perth as Greyhound etc cannot compete with Jetstar and the like. Same with the Overlander train Adelaide to Melbourne only runs a couple of days a week. All other states are similar. Now if airfares were to skyrocket as suggested these modes of transport would become more frequent as they would be profitable again.
Would Qantas allow this to continue flying around with half empty aircraft and losing market share? I think not, as not a good business model.
In addition if airfares go too high that would entice other entrants into the market to cash in on the opportunity to grab the low end leisure travel.
Don't get confused with what is happening right now. Most of the flights during this pandemic are half full at best hence pushing up the price. Can't see that happening on the long term.

[normanton]

Sunfish are you aware how ticket price tiers work?

[rattman]

Thanks Sunfish. No better source than some random from Facebook. I guess it’s settled then.

Yep if only there was website that takes all the flight cost and amalagamtes into one place so you can see all the cost of all flights on what ever day you want. Someone should make it and call it I dunno Webjet sounds like a cool name

In reality the Virgin flight is $179, the jetstar flight 45 minutes later is a $140 and the qantas flight of the day at 9am is $199

[Blueskymine]

Fake news

After actually logging into the booking sites.

Qantas Saturday and Sunday one way $199
Virgin Sunday $169
Jetstar From Tuesday $79

How about you get over the whole Ansett thing and realise Qantas isn’t/wasn’t around to save you.

‘’lifted from Facebook:

To all the people who don’t think Virgin Australia should get government assistance right now - take a look at what happens with an airline monopoly.

Currently Virgin Australia is operating on a very limited schedule of 6 days a week, one flight a day between Sydney and Melbourne. On Saturday there is no flight. Have a look at what Qantas is charging for a single sector between Sydney and Melbourne on a Saturday. When Virgin flys the price is $155 one way, when it doesn’t fly it’s $753 one way.

We need at least 2 airlines in Australia. Please be mindful of the devastating effect the collapse of Virgin would have on Australian travel and tourism.

[Buster Hyman]

‘lifted from Facebook'...is about as relevant as quoting the Greens from Twitter! :}

[normanton]

‘lifted from Facebook'...is about as relevant as quoting the Greens from Twitter! :}
Right up there with chooks Alan Jones quote!

[CamelSquadron]

‘’lifted from Facebook:

To all the people who don’t think Virgin Australia should get government assistance right now - take a look at what happens with an airline monopoly.

Currently Virgin Australia is operating on a very limited schedule of 6 days a week, one flight a day between Sydney and Melbourne. On Saturday there is no flight. Have a look at what Qantas is charging for a single sector between Sydney and Melbourne on a Saturday. When Virgin flys the price is $155 one way, when it doesn’t fly it’s $753 one way.

We need at least 2 airlines in Australia. Please be mindful of the devastating effect the collapse of Virgin would have on Australian travel and tourism.

Sunfish, its so obvious your just a Virgin Angel, paid to post pro Virgin commentary. Now your quoting from your favorite social media platform......and your facts are completely discredited by others......You should just slip back into the depths of the ocean and forget about your career as an Angel...

<insert lots of wikipedia information about how corporate's use paid angels to influence public sentiment>

Oh the irony of this!!!!

BTW I dont think your an Angel but its what you have spent several years of very aggressively accusing anyone else who has posted anything that contrary to your "anti QF" opinion in this forum.....

You have shown your hand - your are a VA apologist.

[krismiler]

https://www.abc.net.au/news/2020-04-17/virgin-australia-coronavirus-unions-voluntary-administration/12157010


Virgin Australia boss meets unions, experts in last-ditch bid amid coronavirus crisisBy business reporter Nassim Khadem (https://www.abc.net.au/news/nassim-khadem/10344356)Posted 10 minutes ago
https://www.abc.net.au/news/image/12100488-3x2-700x467.jpg
PHOTO: Virgin Australia is desperately seeking financial help to keep the company afloat. (AAP: Mal (https://www.abc.net.au/news/2020-04-17/thumb-a-virgin-australia-plane-at-melbourne-airport---good-gene/12157044)

Virgin Australia chief executive Paul Scurrah has called for "rivalry" to be put aside and for the Federal Government and the community to step in and back Virgin in the national interest.On Friday morning, with private equity funds circling as part of a possible takeover of Virgin, there were last-ditch pleas from a roundtable with unions, academics, super industry representatives and politicians including former treasurer Wayne Swan, for the Government to help save the struggling airline.

All participants urged the Government to step in and take an equity stake in the company, which is struggling to refinance a $5 billion debt pile, rather than leave it to the private market to deal with.

If Virgin cannot get shareholder or Government support, the company could soon enter into voluntary administration (https://www.abc.net.au/news/2020-04-16/virgin-australia-disspears-from-skies-which-airline-coronavirus/12151072).


Mr Scurrah, who has repeatedly asked the Government to help the company with a $1.4 billion loan, said he was limited in what he could say while the company was in a trading suspension, but called for all players to "come together and link arms" in order to save the company from collapse.

"This is a national crisis, it's a global crisis, it's a crisis that this industry has never seen before," he told roundtable participants, including journalists, in a Zoom meeting.

"Rivalry should be put aside and the national interest should be put first.

"We should make sure that the industry gets through this together," he said, noting that aside from Virgin's own 10,000 workers, thousands of Australian workers in supply chains also relied on the company's survival.

"Let's come together and link arms … so we can actually do the right thing by the country."

Virgin's chief operating officer Stuart Aggs spoke directly after Mr Scurrah, reiterating how crucial it was for the Government to throw the company a lifeline as it was now fighting to survive on a "day-to-day basis".

"We're clearly in crisis mode. We're an airline under significant scrutiny on an almost hourly basis," he said.

"Competition is important in the industry."
Shame to lose what Virgin has built: chief operating officerMr Aggs, who has worked in the airline industry for 20 years most of which has been at Virgin, said because of the trading suspension, the company's management was limited in the amount of information it could provide its concerned staff.

He said they were getting several emails from team members every day, but could only provide "vague answers", which was a "first for them and us".

He said when Ansett collapsed it took Virgin Blue (now Virgin Australia) more than 20 years to establish itself as a true full-service airline competitor to Qantas.

Virgin Australia still now only held about a 30 per cent share in Australia's aviation market and was struggling to get hold in key corporate markets, which Qantas dominated.

Mr Aggs said Virgin had a team of first-class pilots with long experience in flying planes and it would be "an absolute shame" to let them go.

In his 16 years employed with Virgin, he had seen airlines make various decisions — "some of them crazy" — but it still would be a shame to lose what Virgin had built up.

On Thursday night the Federal Government announced up to $165 million in support to enable Qantas and Virgin Australia to service key metropolitan and regional routes (https://www.abc.net.au/news/2020-04-16/virgin-australia-to-resume-flights-after-coronavirus-suspension/12155466) over the next two months.

Virgin, which had suspended domestic flights last week, said the new schedule would enable it to reinstate 200 staff, including pilots, cabin crew and ground staff.

The extra government funding came after the aviation industry argued that an earlier $1 billion industry support package did little to help the sector because $715 million of it was made up of waiving certain fees that were not charged when planes were grounded.

[mattyj]

https://cimg3.ibsrv.net/gimg/pprune.org-vbulletin/495x496/f706ba0f_7233_483f_bd03_87329bf70577_2c8ee18b5e3c4e6b1fd56e5 72e81f8894a592c9b.jpeg

[Dookie on Drums]

https://www.abc.net.au/news/2020-04-17/virgin-australia-coronavirus-unions-voluntary-administration/12157010
Stu Aggs eh? Wow could I share a story or two. He must have a roll of toilet paper under his chin for that one.

[Buster Hyman]

He said when Ansett collapsed it took Virgin Blue (now Virgin Australia) more than 20 years to establish itself as a true full-service airline competitor to Qantas.
Goes to the root of the problem. Chasing corporate bucks & ignoring your base has come at a price.
Virgin Australia still now only held about a 30 per cent share in Australia's aviation market and was struggling to get hold in key corporate markets, which Qantas dominated.
Which was their goal in 2003 (https://www.flightglobal.com/after-ansett/46797.article). Not a great deal of ambition for the expense is it?

[2020Balance]

Mr Aggs said Virgin had a team of first-class pilots with long experience in flying planes and it would be "an absolute shame" to let them go.

Yeah absolute shame Stu and Paul when you threw your first class Vainz and TT guys under the bus a few weeks ago who would have done whatever it took to help the airline. Take a number in the dole line with the rest of us.

[Dookie on Drums]

Mr Aggs said Virgin had a team of first-class pilots with long experience in flying planes and it would be "an absolute shame" to let them go.

Yeah absolute shame Stu and Paul when you threw your first class Vainz and TT guys under the bus a few weeks ago who would have done whatever it took to help the airline. Take a number in the dole line with the rest of us.

Oh Stu and Paul threw a lot of people under the bus years before. As corrupt as you could possibly get.

[Tommy Bahama]

Funny how Aggs has had ample opportunity to speak out about the path Virgin was on for the last 10 years! Now his backside is on the line hes finally screaming like a banshee.

[Ichiban]

https://cimg8.ibsrv.net/gimg/pprune.org-vbulletin/754x495/file_20200416_140697_bzgbiq_3c08988ec43cc504f4ba1c148eeb2e47 1e7dc3ad.jpg

Ansett supporters rally in Sydney on September 14 2001, calling on the federal government to bail out the airline. Dean Lewins/AAP

[Paragraph377]

Funny how Aggs has had ample opportunity to speak out about the path Virgin was on for the last 10 years! Now his backside is on the line hes finally screaming like a banshee.
Aggs is yet another long term 20 year veteran of the airline who should’ve left many many years ago. After 20 years Stewie look at what you have contributed towards - an airline gone bust. You too deserve a reserved seat onboard VH-SACKED along with your incompetent Board and numerous others who have managed to glue themselves to the VA fabric and remain in a teflon condition for far too many years. You and the Board Chair should’ve gone the day IL Douche bailed from the sinking ship.

[Chadzat]

Sooooo many armchair experts on here - you retired blokes are the worst of the lot I must say. Nothing better to do with your sad retirement years than get on pprune and throw mud around everywhere. Get a hobby! It is cringeworthy and hilarious at the same time. How many of you intimately know what Stu has been doing in his roles over the years? Its far easier just to tarnish everyone with the same brush isnt it. Im far from a Company sympathiser but in all my dealings with SA he is one of the few people in VA I would trust implicitly that he has the best intentions for the business and the staff.

[Lookleft]

A picture is worth a thousand words and Ichiban has just proved it. All this talk of the government must intervene and all the jobs that will be lost has been heard before with, tragically, what will be the same outcome.

[Paragraph377]

Sooooo many armchair experts on here - you retired blokes are the worst of the lot I must say. Nothing better to do with your sad retirement years than get on pprune and throw mud around everywhere. Get a hobby! It is cringeworthy and hilarious at the same time. How many of you intimately know what Stu has been doing in his roles over the years? Its far easier just to tarnish everyone with the same brush isnt it. Im far from a Company sympathiser but in all my dealings with SA he is one of the few people in VA I would trust implicitly that he has the best intentions for the business and the staff.
You must be one of the Village ‘specialists’.

And yes of course, PPPrune is only for those who aren’t retired and are still in the industry working. Of course! And because one retires that means they no longer know anything, they don’t have any vested interests in the industry anymore in any way, shape or form. A retired aviator no longer is allowed an opinion of free speech if it differs from Chadzat. Gee Chad, your posts over time have mentioned various opinions about a particular airline and Governments that you have never worked for, so perhaps you shouldn’t mention them publicly? Quite simply Mr Aggs has spent the past 20 years inside the VA bubble. And for a number of these recent years he has held decision making capability and has supported and promulgated numerous decisions that VA are sadly reaping today. Perhaps he is a ‘cool dude’ and lots of fun, easy to chat with and loves a beer with the boys too. Whoopydoo. All I’m saying is that the day IL Douche left should’ve been the day that other senior VA long term people should’ve also been asked to leave. It’s now pretty obvious why.

[Open Descent]

I get the impression from that article that Scurrah is trying to extend the olive branch. Would have been nice to see Joyce do something similar.

Very early on, VA went on the attack against QF by trying to turn it into a popularity contest and his staff dutifully followed with an endless tirade of moronic and emotive social media posts that had absolutely nothing to do with the task at hand.
All of this of course on the back of an idiotic rant by AJ which was completely unhelpful and kicked this whole thing off.

I think Scurrah concedes their PR war against QF has gone a bit too far and is doing his best to tell his own people to pull their heads in.

[machtuk]

You must be one of the Village ‘specialists’.

And yes of course, PPPrune is only for those who aren’t retired and are still in the industry working. Of course! And because one retires that means they no longer know anything, they don’t have any vested interests in the industry anymore in any way, shape or form. A retired aviator no longer is allowed an opinion of free speech if it differs from Chadzat. Gee Chad, your posts over time have mentioned various opinions about a particular airline and Governments that you have never worked for, so perhaps you shouldn’t mention them publicly? Quite simply Mr Aggs has spent the past 20 years inside the VA bubble. And for a number of these recent years he has held decision making capability and has supported and promulgated numerous decisions that VA are sadly reaping today. Perhaps he is a ‘cool dude’ and lots of fun, easy to chat with and loves a beer with the boys too. Whoopydoo. All I’m saying is that the day IL Douche left should’ve been the day that other senior VA long term people should’ve also been asked to leave. It’s now pretty obvious why.

Nicely said, the 'boomers' (as the 'entitled generation like to call us) and others think once retired we should just go away and die, their turn will come one day, will they do the same?

[Lookleft]

People only extend olive branches when they have something to offer. It seemed to be more a grasping at the rails at the back end of the Titanic.

[The Bullwinkle]

Aggs is yet another long term 20 year veteran of the airline who should’ve left many many years ago. After 20 years Stewie look at what you have contributed towards - an airline gone bust. You too deserve a reserved seat onboard VH-SACKED along with your incompetent Board and numerous others who have managed to glue themselves to the VA fabric and remain in a teflon condition for far too many years. You and the Board Chair should’ve gone the day IL Douche bailed from the sinking ship.
I'd have to disagree there. Aggs managed to make many improvements despite being hamstrung by Il Deuce.
Would you rather still have Rob Blunt in that position?

[SKYCAMEL]

Chazat - Don't believe all the spin you hear from management, you might be amazed at what has happened under the 3 stooges over the last few years. And I speak from recent experience with them.

[MelbourneFlyer]

"Bring back John Thomas" ?

[krismiler]

Credit rating now downgraded to junk status.

https://www.fitchratings.com/research/corporate-finance/fitch-downgrades-virgin-australia-to-ccc-on-liquidity-issues-17-04-2020


Fitch Ratings - Sydney - 17 Apr 2020: Fitch Ratings has downgraded Virgin Australia Holdings Limited's (VAH) Long-Term Foreign-Currency Issuer Default Rating (IDR) to 'CCC-' from 'B-' due to the increasing uncertainty around whether the airline will be able to obtain additional financing to ensure it has sufficient liquidity while the coronavirus-related travel restrictions in Australia remain in place. The rating is removed from Rating Watch Negative (RWN), on which it was placed on 26 March 2020.The rating action follows the company's announcement that it is in discussions on restructuring alternatives. While Fitch believes that the company continues to work on financial assistance, we believe that travel curbs to contain the COVID-19 pandemic are increasingly straining its liquidity such that default is a real possibility.

VAH's working capital is increasingly being affected by cancellations, minimal bookings and outflows at its loyalty programme as members redeem points for non-flight benefits. The airline has now grounded most of its fleet to minimise cash outflows, but it is seeking options to shore up its liquidity. VAH's ability to secure this funding is important to maintain its viability.

Fitch believes the measures VAH took to ground its entire domestic fleet and run only the government-subsidised minimum domestic network will help the airline preserve cash flows. However, we believe the airline will run out of liquidity over the next six months without fresh third-party support. It remains uncertain when the travel restrictions will be lifted, and the time it will take for consumers to return to travel and VAH's operations to return to normal.
KEY RATING DRIVERS

COVID-19-Related Impact: Liquidity stress has been amplified as all non-essential travel between cities in Australia is effectively prohibited. VAH has suspended international operations and all domestic flights, except for the government-subsidised minimum domestic network. We expect cash-flow generation to fall significantly in the financial year ending June 2020 (FY20), and continue into at least 1HFY21. As a result, we believe that VAH will require fresh third-party financial support to ensure its survival during the travel restrictions and the aftermath once they are lifted.

Liquidity Pressure & Restructuring: VAH says that it remains in discussions on financial assistance. Fitch believes debt restructuring is a possibility unless VAH is able to obtain additional funding or some form of financial assistance from the government or another party. Fitch expects VAH to experience significant working-capital outflows for the remainder of FY20 as customers seek refunds and bookings fall sharply, and there are outflows for aircraft rent, staff costs, frequent-flyer point redemptions and other charges.

In our view, without additional funding over the next few months, there is a high chance that the airline will not be able to survive the impact of the COVID-19 shut down. We believe the government's relief package announced in March 2020, which provides refunds of airport charges incurred since February 2020, provides little support past FY20 given the grounding of most of VAH's fleet. Further, the government's announcement that it will subsidise a minimum domestic network from April to June 2020 will also provide little liquidity relief for the airline above what it could save with the grounding of its fleet.

Coronavirus Assumptions: Fitch now forecasts VAH's domestic capacity to fall by 100% for the rest of FY20, before recovering gradually from August 2020. We believe the government subsidies for flights will be, on the whole, earnings neutral and have not incorporated their effect into our forecast. We assume VAH's revenue passenger kilometres (RPK) and available seat kilometres (ASK) to gradually recover to close to our previous estimates by FY22. We believe that the coronavirus-related curbs in Australia will continue to have a strong impact on travel throughout FY21, although domestic travel may slowly resume over the next couple of months.

VAH's earliest debt maturity is USD350 million in October 2021, however the company is unlikely to be in a position to meet its debt service requirements beyond September 2020 without additional funding.

Limited Levers, but Lasting Impact: VAH has options available that we have not specifically incorporated into our short-term liquidity forecasts, including handing back leased aircraft and selling or borrowing against owned aircraft. We believe these measures, which would have a lasting impact and affect VAH's ability to recover, would be VAH's last line of defence. In addition, we have not included any potential further relief from the government to the aviation sector in our forecasts.

[2020Balance]

Aggs is yet another long term 20 year veteran of the airline who should’ve left many many years ago. After 20 years Stewie look at what you have contributed towards - an airline gone bust. You too deserve a reserved seat onboard VH-SACKED along with your incompetent Board and numerous others who have managed to glue themselves to the VA fabric and remain in a teflon condition for far too many years. You and the Board Chair should’ve gone the day IL Douche bailed from the sinking ship.


So true and accurate but you missed one key point mate . The dozen or so other oxygen thief specialists at the top as well

[crosscutter]

Credit rating now downgraded to junk status.

respectfully, B- is well into the junk status category let alone the current rating. There are very few non junk rated airlines if it’s any consolation. Further, trusting the rating agencies is a mugs game in itself.

[Chadzat]

You must be one of the Village ‘specialists’.

And yes of course, PPPrune is only for those who aren’t retired and are still in the industry working. Of course! And because one retires that means they no longer know anything, they don’t have any vested interests in the industry anymore in any way, shape or form. A retired aviator no longer is allowed an opinion of free speech if it differs from Chadzat..

Guess again. You have never worked for VA yet you seem to be a bit of a self-proclaimed expert on the company including staff you have never met. I dont rate self-proclaimed experts. It would be like me spouting on about AirNZ. Ive never worked for the joint, so why would I bother!? An opinion is fine but scrolling through tens of posts of you sprouting rubbish is pretty tiresome.

When I retire I certainly wont be touching anything to do with aviation apart from a back seat going on holidays - but each to their own. I guess some people know nothing else but to spend their days on pprune.

[Paragraph377]

When I retire I certainly wont be touching anything to do with aviation apart from a back seat going on holidays - but each to their own.
Hopefully that will be very soon then! Please!!

[boaccomet4]

It would be sad to see either Virgin or Qantas fail. But there may be a way out of this. Whilst Qantas and Virgin are not flying the suppliers of aviation fuel are also suffering. I am showing my age here but there was a period in the late 1950;s and 1960's where we had 'The two airline policy for domestic operations. QF withdrew from domestic services including PNG and Ansett and TAA took over domestic services with identical fleet types and government support. There was a period in the 1960's when Shell,who provided the bulk of aviatiion fuel, helped Reg Ansett with funds to keep the airline afloat. TAA and Ansett even had a spare parts pool (engines, etc.) Even though Ansett and TAA were in competition we respected each other and often socialised together outside work hours. If there was an aircraft breakdown passengers were transferred with ease to the other carrier to ensure they reached their destination. Why not get an Australian based aviation fuel provider interested in giving Virgin the same support that Reg Ansett was given many years ago as this may save the jobs of many dedicated staff at Virgin and the government legislate that the two airlines work together to ensure the viability of both airlines.

[boaccomet4]

It would be sad to see either Virgin or Qantas fail. But there may be a way out of this. Whilst Qantas and Virgin are not flying the suppliers of aviation fuel are also suffering. I am showing my age here but there was a period in the late 1950;s and 1960's where we had 'The two airline policy for domestic operations. QF withdrew from domestic services including PNG and Ansett and TAA took over domestic services with identical fleet types and government support. There was a period in the 1960's when Shell,who provided the bulk of aviatiion fuel, helped Reg Ansett with funds to keep the airline afloat. TAA and Ansett even had a spare parts pool (engines, etc.) Even though Ansett and TAA were in competition we respected each other and often socialised together outside work hours. If there was an aircraft breakdown passengers were transferred with ease to the other carrier to ensure they reached their destination. Why not get an Australian based aviation fuel provider interested in giving Virgin the same support that Reg Ansett was given many years ago as this may save the jobs of many dedicated staff at Virgin and the government legislate that the two airlines work together to ensure the viability of both airlines.

[Sunfish]

BOAC;

1. The spare parts pool was a good idea that didn’t last because TAA and Ansett had different policies on optional modifications. TAA did SFA while Ansett did the lot because of tax considerations. I think the final straw was when TAA took Ansetts fully modded B727 flap set at a D check and returned an un modified set to the pool.

2. TAA and Ansett management socialized every day during lunchtime at Macs. That was where policy, services and fares was decided. For example, it was virtually impossible for staff to move from one airline to the other because the two HR departments had a “no poaching”, “no reemployment” agreement. I occasionally ended up at Macs at lunchtime and I saw it. Various departments had other local watering holes as well.It was no accident that Peter Abeles first action was to ban drinking during working hours.

3. Lorna was a lovely Lady and very kind to me.

[chance]

Latest is that Scurrah is talking to a group comprising China Southern, China Eastern and Air China to do the rescue deal. So three Chinese companies as distinct from now with an Arab, a Singaporean, two Chinese and a Pom. Seems likes its Hobsons Choice as D Day approaches.

[Rashid Bacon]

If this is true, yet another example of Chinese take-over by stealth. Time to stop this right now :mad:

Scurrah must be dreaming and clutching at straws, but hopefully, the FIRB will knock this one on the head.

[crosscutter]

What are you on about? This is good news. It’s fundamentally no different to shareholder composition now. It’s just an anti China rant.

[Rashid Bacon]

Really ????

What planet are you on - It's fundamentally different with proposed new Chinese (government) investment.:ugh:

For a start, China Eastern is over 60% government owned.

The parent company of China Southern Airlines Company Limited is China Southern Air Holding Company, a state-owned enterprise (Wikipedia)

[Forced Labor]

There is no way the Australian government should allow a majority Chinese government owned company to invest here in the future.

But this may have all been overtaken by the news that the QLD government is willing to conditionally support VA with $ 200 million. :ok:

[dr dre]

If this is true, yet another example of Chinese take-over by stealth. Time to stop this right now :mad:

Scurrah must be dreaming and clutching at straws, but hopefully, the FIRB will knock this one on the head.

The federal government is going to be hundreds of billions in debt from these relief measures they are implementing. Plus the money to be spent to restart the economy later. They don’t have the ability or desire to bailout virgin, nor do any of its current owners, not does it seems many private investors.

For the sake of 10,000 jobs is any going to knock this deal on the head because of an ideological hate of China whipped up by the media? Any offer of help will be appreciated.

[crosscutter]

Where were the complaints when SIA was a possible new owner? Singapore OK? China Not Ok? Got it. Notwithstanding my own personal desire and bias to have a Australian owner, I think your logic is flawed. Your concerns are valid but you can’t cherry pick overseas governments without sounding like a .....

Saving Virgin was yelled loud and clear, ‘it’s in the national interest’ to ‘keep the air fair.’ It appears blocking China is a greater national interest to some.

[34R]

The government have had zero problem in the past allowing China to invest heavily here. They won’t change their tune now, in fact they will be breathing a massive sigh of relief at the prospect.

As perception is everything, it may be a point of difference with the public initially. But when the first $99 fares are published it will be quickly forgotten.

[Led Zeppelin]

There is a world of difference between 'Singapore Inc' and the Chinese government - what don't you understand about that ????

So, in this case, it is important to differentiate between the two. One is greatly more insidious with fairly nasty political agendas than the other - I'll leave you to work out which one that is.

[rmm]

Queensland govt looking to bail them out, contingent on other states also helping.

https://www.abc.net.au/news/2020-04-18/virgin-offered-$200m-coronavirus-lifeline-from-qld-government/12160946

[3 Holer]

The federal government is going to be hundreds of billions in debt from these relief measures they are implementing. Plus the money to be spent to restart the economy later. They don’t have the ability or desire to bailout virgin, nor do any of its current owners, not does it seems many private investors.

For the sake of 10,000 jobs is any going to knock this deal on the head because of an ideological hate of China whipped up by the media? Any offer of help will be appreciated.

I do think they have the desire but unfortunately, as you stated, they won't have the ability due to the debt accrued as a result of the rescue policies already afforded to the many small businesses, the unemployed and exit strategy for the economy post Covid-19. I hope the Chinese do put their hands in their pockets.

We are all in for a rough ride ahead and we are ALL in it together.

[Square Bear]

Isn’t it that whoever buys into Virgin aren’t buying an Australian company, but buying a predominately overseas owned company that is based and operates in Australia?

[Led Zeppelin]

Air China is also another state owned enterprise (China National Aviation Holding) - so the three airlines mentioned in the posts above are all facades for the Chinese government. :ugh:

[normanton]

Would the government block a chinese takeover if it meant the airline would fold? Some big balls from SCOMO.

Saw the money from the QLD government coming from a mile away. Morons fell for the "we'll move to Melbourne" threat.

[Sunfish]

Good move by Queensland Government to forestall a move to Victoria.

[crosscutter]

Would the government block a chinese takeover if it meant the airline would fold? Some big balls from SCOMO.

Saw the money from the QLD government coming from a mile away. Morons fell for the "we'll move to Melbourne" threat.

The govt said (in fin review today I think) that they would NOT prevent an overseas govt takeover

[normanton]

Good move by Queensland Government to forestall a move to Victoria.
Ahh well if Sunfish says it's a good deal, it must really be a bad deal. :}

[TWT]

Latest is that Scurrah is talking to a group comprising China Southern, China Eastern and Air China to do the rescue deal. So three Chinese companies as distinct from now with an Arab, a Singaporean, two Chinese and a Pom. Seems likes its Hobsons Choice as D Day approaches.

Just curious, would you have a link to the source of this rumour by any chance ?

[Matt48]

Does anyone know if Virgin own or lease aircraft or a mix of both. ?

[Ragnor]

Just curious, would you have a link to the source of this rumour by any chance ?


Turn the news on it’s been all over it or buy a newspaper!

I don’t think this is a good thing having the Chinese buy VA this will be bad long term.

[Blueskymine]

My gut feeling is the other states won’t match it. It’s a Brisbane based airline and the other states will still have air services or some form. Plus they’re broke.

the Chinese will be the best bet.

[Matt48]

Isn’t it that whoever buys into Virgin aren’t buying an Australian company, but buying a predominately overseas owned company that is based and operates in Australia?

Absolutely, it's not like they are buying an Australian owned and run business, it's a 90% foreign owned airline that operates in Australia, and does a damn fine job too I if I might say, and we will pay through the nose for domestic flights if they fail.

[wheels_down]

Does anyone know if Virgin own or lease aircraft or a mix of both. ?
About 50/50

But they don’t really own them. As they have Borrowed cash against every one of them (minus the Fokker), with the now problem of unable to pay the debt tied to them, they are really owned by the banks.

[mates rates]

A mix of both.I think they own 4 777’s and about 30 737’s.

[galdian]

A mix of both.I think they own 4 777’s and about 30 737’s.

Define "owned".

One poster says just "owned", another says 50% owned but used as collateral for loans...so the financial institution either "owns" or has a substantial holding.

It sounds as if VA own ZERO of the mainline fleet - if all are used as security for loans.

[Matt48]

About 50/50

But they don’t really own them. As they have Borrowed cash against every one of them (minus the Fokker), with the now problem of unable to pay the debt tied to them, they are really owned by the banks.
Thanks WD.

[Matt48]

The Chinese should be barred from buying any business/asset in Australia.

I agree, they should be, but in this case, it's not an Australian company apart from the 10% Aussie shareholding.

[normanton]

If the chinese want in, they should be allowed in under the current circumstances i.e. $5b debt.

If they want it cheaply once the company goes into administration, the government should be telling them to get ^%$#@!.

[snoop doggy dog]

Capitalist when in Profit, Socialist when not.

Am I missing something here? :ugh: They definitely can not have it both ways! :mad:

No bail out...

[directimped]

Capitalist when in Profit, Socialist when not.

Am I missing something here? :ugh: They definitely can not have it both ways! :mad:

No bail out...
Thats how it works. In the good times, minimise your tax as best you can. In the bad times, ask the taxpayer to bail you out.

But hey, it's legal!

[Matt48]

If the chinese want in, they should be allowed in under the current circumstances i.e. $5b debt.

If they want it cheaply once the company goes into administration, the government should be telling them to get ^%$#@!.

A bit like a motorist offering a cyclist five bucks for the $3k bike they just knocked him off.

[Matt48]

Capitalist when in Profit, Socialist when not.

Am I missing something here? :ugh: They definitely can not have it both ways! :mad:

No bail out...
There won't be a major bailout apart from miss Piggy who just wants her employment stats to look good for the impending election.

[Toruk Macto]

Is Joyce still around ?

[normanton]

Is Joyce still around ?
I think the board got around to telling him to keep his mouth shut.

It’s been great.

[wheels_down]

I’m having a bit of trouble getting past the fact that governments have intervened in the market in a rapid and unprecedented way. I don’t see how there can be a reasonable expectation that VA should have anticipated and prepared for an event of such magnitude. Are there any examples of a government, institutions, businesses or companies that have squirrelled away sufficient cash reserves to survive 6 months of no income.
.

It’s probably more the point, if they did not blow and waste so much cash in the last decade, which in return just blew out any cost base advantage they once had over the rival, they could have tomorrow, gone to a bank and asked for $2 billon and secure it against aircraft.

Not only are they $5b in debt, they have nothing left to secure cash against. They have exhausted every financial option available. Everything is maxed out basically.

Even pre Corona, how the heck they were going to finance the upcoming MAX order was anyone’s guess.

Let alone repay, what, $7b of debt? Post the virus.

How on earth do you get out of $7b of debt, from such a small revenue and poor profit history? Anyone?

[Turnleft080]

On a light note, regarding Victoria, maybe Dan Andrews was trying to find that 1.1b he threw away on that worthless A4 piece of paper.

[crosscutter]

You feel there is so much more to unfold. Chinese government ownership you feel is so unlikely because it’ll be too hot for the government. So then what? Busy weekend for the spinners, power brokers and back room dealers.

[krismiler]

https://www.dailymail.co.uk/news/article-8230205/The-CHINESE-considering-buying-Virgin-Australia-Morrison-government-refused-bail-out.htmlNow the CHINESE are considering buying Virgin Australia after the Morrison government refused to bail out embattled airline

Chinese airlines are considering purchasing the struggling Virgin Australia
Chinese-owned carriers are in talks about buying the Queensland-based airline
The Morrison government refused to give the company a $1.4billion bailout
A joint approach from two Chinese carriers could save the airline from collapse

By ISABELLE STACKPOOL FOR DAILY MAIL AUSTRALIA (https://www.dailymail.co.uk/home/search.html?s=&authornamef=Isabelle+Stackpool+For+Daily+Mail+Australia)

PUBLISHED: 16:50 BST, 17 April 2020 | UPDATED: 17:21 BST, 17 April 2020

Chinese airlines are considering buying embattled Virgin Australia after the Morrison government refused to bail out the struggling airline.

China (https://www.dailymail.co.uk/news/china/index.html) Southern Airlines, China East Airlines and Air China are all in discussions about purchasing the carrier in a last-minute takeover in a bid to stop its 'catastrophic' collapse.

Sources told the Courier Mail (https://www.couriermail.com.au/business/chinese-airlines-in-talks-to-buy-embattled-virgin-australia-carrier/news-story/05ec2204b0aaadfdd92c68c4e6c91ba8) that the Chinese government-owned airlines were yet to make a formal offer.

However any offer could provide a much-needed lifeline to Virgin Australia and the market-led cash solution the Morrison government urged them to find.
https://i.dailymail.co.uk/1s/2020/04/17/16/27322706-8230205-image-a-44_1587136219507.jpg
Chinese-owned airlines are considering purchasing Virgin Australia (pictured) to stop the company from collapsing amid the coronavirus crisis Virgin Australia wanted the Federal Government to hand over $1.4billion to save them from collapse but the money has not been forthcoming.

A joint approach from two Chinese carriers could see the foreign-owned Virgin Australia Group prevented from falling into voluntary administration.

The move would likely require approval from the Foreign Investment Review Board before a solution could be reached.

It is believed Australians would lose millions of Velocity Points and flight credits if the company went into administration.

On Friday night it was revealed that the Queensland government will offer the troubled airline $200million towards a bailout in the hope that other states will follow suit.

The company's corporate headquarters are located in Brisbane but the head office and Velocity Frequent Flyer businesses may potentially move to Melbourne.

The managing director of the Virgin Australia Group, Paul Scurrah, on Wednesday refused to speculate about voluntary administration.
https://i.dailymail.co.uk/1s/2020/04/17/16/27322704-8230205-image-a-45_1587136244108.jpg
A joint approach from two Chinese carriers (pictured) could save the struggling company On Thursday Virgin Australia asked the ASX to suspend its shares for seven days and revealed it was in confidential talks to save the company from collapse.

'These discussions have continued over the last two days including discussions which remain confidential and are incomplete,' Virgin said in a statement to the ASX.

'The company is not presently in a position to make an announcement to the market with respect to these matters.'

Virgin Australia has already suspended all but one domestic route, stood down 8,000 workers and had its credit rating downgraded.

The Federal Opposition called on the government to provide financial support for Virgin Australia yesterday.

Labor Senator for Queensland, Murray Watt, said it was 'an issue of national interest' to keep Virgin Australia afloat.

Senator Watt said the government should take an equity stake in Virgin Australia and that the airline was a 'proud Queensland company' essential to the state's tourism.

'Maintaining two airlines is critical for a functioning tourism industry and jobs,' he said.

Prime Minister Scott Morrison previously said any public funding for aviation would be spread across the entire sector.
https://i.dailymail.co.uk/1s/2020/04/17/16/27322708-8230205-image-a-46_1587136248279.jpg
The Morrison Government have refused Virgin Australia's plea for a $1.4billion bail out

[IsDon01]

$200M is a drop in the bucket compared to the amount VA owes its creditors.

So $200M might keep them going for another couple of months, maybe, then it goes into administration anyway. What happens to the $200M of taxpayers money?

Is that incompetent twit running QLD going to be held accountable for the money she threw away knowing it was almost certainly going to be lost? She’d have been better off running down to the casino and putting $200M on black. At least there would have almost been a 50% chance of getting money back.

[Sunfish]

I’m glad I’m not in the tourist industry. Qantas and what was left of Virgin will crush it in future. Same goes for anyone trying to operate an international business outside Sydney. Qantas will suck the lifeblood out of the country.

”Market Forces” is Federal treasury code for “there is only room for one airline in Australia and its name starts with Q”.

[Matt48]

This is hilarious for two reasons. They have a board and CEO with no airline experience. When you are in distress you don't get "preference" who rescues you.
LOL, a bit like Titanic passengers wishing that only another luxury ship would come to their rescue.

[Matt48]

$200M is a drop in the bucket compared to the amount VA owes its creditors.

So $200M might keep them going for another couple of months, maybe, then it goes into administration anyway. What happens to the $200M of taxpayers money?

Is that incompetent twit running QLD going to be held accountable for the money she threw away knowing it was almost certainly going to be lost? She’d have been better off running down to the casino and putting $200M on black. At least there would have almost been a 50% chance of getting money back.
Exactly, shows Morrison is way smarter than Miss Piggy.

[Arctaurus]

It's a very conditional offer and won't get over the line. Nice try :ugh:

[Matt48]

It’s probably more the point, if they did not blow and waste so much cash in the last decade, which in return just blew out any cost base advantage they once had over the rival, they could have tomorrow, gone to a bank and asked for $2 billon and secure it against aircraft.

Not only are they $5b in debt, they have nothing left to secure cash against. They have exhausted every financial option available. Everything is maxed out basically.

Even pre Corona, how the heck they were going to finance the upcoming MAX order was anyone’s guess.

Let alone repay, what, $7b of debt? Post the virus.

How on earth do you get out of $7b of debt, from such a small revenue and poor profit history? Anyone?
Virgin was circling the drain well before Covid19, has the board been sitting on their hands for the last decade, if by some miracle they survive, maybe they should go back to the low cost plan, no airbridge, walk to plane with a Virgin brolly in the rain, no free meals or drinks, pay for it if you want it, no free baggage , pay for it by weight. ETC.

[dontgive2FACs]

I certainly mean no disrespect to VA colleagues at this troubled time, but any taxpayer money sent to VA is a mistake.

In it’s current form, it appears the business has been dealt a fatal blow with COVID-19. I would support government assisting a rebuilt 2nd airline to replace them once administration process finishes.

[Turnleft080]

Deputy Prime Minister Michael McCormack has welcomed Queensland's $200 million commitment to ailing airline Virgin Australia and insists the Morrison government is also exploring all avenues to keep two airlines in the air.
Queensland's Palaszczuk government confirmed it is providing $200 million to cash-strapped Virgin, with the airline having so far been unsuccessful in its request for a $1.4 billion loan from the federal government.
"Sustaining Australia's aviation industry is critical to protecting livelihoods and saving lives and the Federal Government is exploring all possible avenues to keep two airlines in the air, throughout this pandemic and on the other side of it," Mr McCormack told AAP on Saturday.
"I welcome states and territories exploring ways to assist their local aviation businesses and welcome the Queensland government's commitment to Virgin."
Mr McCormack, who is the federal transport minister, said the Morrison government has made a "significant investment" of an initial $165 million to keep Qantas and Virgin operating essential domestic network services, including the most crucial metropolitan and regional routes in Australia.
He said there is a heavy focus on Queensland routes.
That brings the federal government's total support to the aviation industry to $1.28 billion.RELATED ARTICLES

Coronavirus live updates: Global deaths hit 150,000; China under scrutiny after Wuhan death toll doubles; 'Immune' crew to man Ruby Princess back to US (https://www.9news.com.au/national/coronavirus-live-blog-updates-greg-hunt-who-alexander-downer-china-clear-wuhan-death-toll-spike-tasmania-covid-cases/55ff5162-50b0-4287-b4e7-9ea54330b20e)
More calls for China COVID-19 transparency (https://www.9news.com.au/national/more-calls-for-china-covid-19-transparency/cf189940-03df-481f-86c1-81d8771c29eb)
Current coronavirus death toll 'just the tip of the iceberg' (https://www.9news.com.au/world/coronavirus-death-toll-still-unclear/ed64febb-2b38-4ffb-bedd-ec3d9fb36943)


Confirming Queensland's contribution, State Development Minister Cameron Dick says it is imperative Australia has two airlines to support tourism, jobs and regional investment.
"If we're going to get through this pandemic with two national airlines ... then all governments need to come together to ensure that is the case," he told reporters in Brisbane.
"Queensland can't do this on its own. This is a national airline weathering a national crisis and it needs a national response which is why we're asking the Australian government to take the lead on this."
Mr Dick said Queensland's support was conditional on debt restructuring, shareholders and bondholders doing their bit.
The airline's headquarters would also need to remain in Brisbane and regional flights would need to continue.
Federal Labor frontbencher Jason Clare also called on the Morrison government to help Virgin.
"We need two airlines. If we don't have two, we'll have fewer flights and flights will cost more. It won't mean just 15,000 Aussies losing their jobs, but the task of crawling out of the crater created by the coronavirus will become harder," he told ABC television.
Mr McCormack said the federal government will continue to monitor Virgin's situation.
"But the best solution for the airline would be a market solution," he said.
© AAP 2020

[Turnleft080]

Deputy Prime Minister Michael McCormack has welcomed Queensland's $200 million commitment to ailing airline Virgin Australia and insists the Morrison government is also exploring all avenues to keep two airlines in the air.
Queensland's Palaszczuk government confirmed it is providing $200 million to cash-strapped Virgin, with the airline having so far been unsuccessful in its request for a $1.4 billion loan from the federal government.
"Sustaining Australia's aviation industry is critical to protecting livelihoods and saving lives and the Federal Government is exploring all possible avenues to keep two airlines in the air, throughout this pandemic and on the other side of it," Mr McCormack told AAP on Saturday.
"I welcome states and territories exploring ways to assist their local aviation businesses and welcome the Queensland government's commitment to Virgin."
Mr McCormack, who is the federal transport minister, said the Morrison government has made a "significant investment" of an initial $165 million to keep Qantas and Virgin operating essential domestic network services, including the most crucial metropolitan and regional routes in Australia.
He said there is a heavy focus on Queensland routes.
That brings the federal government's total support to the aviation industry to $1.28 billion.RELATED ARTICLES

Coronavirus live updates: Global deaths hit 150,000; China under scrutiny after Wuhan death toll doubles; 'Immune' crew to man Ruby Princess back to US (https://www.9news.com.au/national/coronavirus-live-blog-updates-greg-hunt-who-alexander-downer-china-clear-wuhan-death-toll-spike-tasmania-covid-cases/55ff5162-50b0-4287-b4e7-9ea54330b20e)
More calls for China COVID-19 transparency (https://www.9news.com.au/national/more-calls-for-china-covid-19-transparency/cf189940-03df-481f-86c1-81d8771c29eb)
Current coronavirus death toll 'just the tip of the iceberg' (https://www.9news.com.au/world/coronavirus-death-toll-still-unclear/ed64febb-2b38-4ffb-bedd-ec3d9fb36943)


Confirming Queensland's contribution, State Development Minister Cameron Dick says it is imperative Australia has two airlines to support tourism, jobs and regional investment.
"If we're going to get through this pandemic with two national airlines ... then all governments need to come together to ensure that is the case," he told reporters in Brisbane.
"Queensland can't do this on its own. This is a national airline weathering a national crisis and it needs a national response which is why we're asking the Australian government to take the lead on this."
Mr Dick said Queensland's support was conditional on debt restructuring, shareholders and bondholders doing their bit.
The airline's headquarters would also need to remain in Brisbane and regional flights would need to continue.
Federal Labor frontbencher Jason Clare also called on the Morrison government to help Virgin.
"We need two airlines. If we don't have two, we'll have fewer flights and flights will cost more. It won't mean just 15,000 Aussies losing their jobs, but the task of crawling out of the crater created by the coronavirus will become harder," he told ABC television.
Mr McCormack said the federal government will continue to monitor Virgin's situation.
"But the best solution for the airline would be a market solution," he said.
© AAP 2020

[krismiler]

A take over by Chinese airlines would make sense for them, China Southern in particular which wants to operate a hub out of Guangzhou. They were the cheapest option from Sydney to London awhile ago. It would also give the Skyteam alliance a presence in Australia if CS or CE got in. China Eastern already partner with QF on Chinese domestic routes so that might be in doubt if they bought a competing airline in Australia. Whilst all three are government owned, Air China is the most government of the lot but would continue the Star alliance presence. Surprisingly the article talks about saving Virgin from going into administration, possibly they want to preserve as much of the operation as they can but I can still see a significant restructure and debtors taking a loss.

Allowing Chinese ownership might be the price for preventing an airline collapse and a significant loss of jobs and creditors money. The Chinese step in as saviours preserving Australian jobs and paying the creditors most of what they owe and it return get something they wouldn't be able to in normal times.

A Chinese owned domestic airline in Australia would come in handy for all the tourists they would bring in. Just like Thailand we could have the zero dollar Chinese tourist who arrives on a Chinese airline, stays in a Chinese owned hotel, gets transported around by a Chinese owned tour company, eats in Chinese restaurants and shops in Chinese owned downtown duty frees. Actually we probably have most of that already, still it creates a few jobs in the tourism sector and they pay some non refundable taxes.

[LapSap]

A take over by Chinese airlines would make sense for them, China Southern in particular which wants to operate a hub out of Guangzhou. They were the cheapest option from Sydney to London awhile ago. It would also give the Skyteam alliance a presence in Australia if CS or CE got in. China Eastern already partner with QF on Chinese domestic routes so that might be in doubt if they bought a competing airline in Australia. Whilst all three are government owned, Air China is the most government of the lot but would continue the Star alliance presence. Surprisingly the article talks about saving Virgin from going into administration, possibly they want to preserve as much of the operation as they can but I can still see a significant restructure and debtors taking a loss.

Allowing Chinese ownership might be the price for preventing an airline collapse and a significant loss of jobs and creditors money. The Chinese step in as saviours preserving Australian jobs and paying the creditors most of what they owe and it return get something they wouldn't be able to in normal times.

A Chinese owned domestic airline in Australia would come in handy for all the tourists they would bring in. Just like Thailand we could have the zero dollar Chinese tourist who arrives on a Chinese airline, stays in a Chinese owned hotel, gets transported around by a Chinese owned tour company, eats in Chinese restaurants and shops in Chinese owned downtown duty frees. Actually we probably have most of that already, still it creates a few jobs in the tourism sector and they pay some non refundable taxes.

I’ll respond to each of your points with one word......
:mad:

Did the past 2 months not teach you anything???

[C441]

"Queensland's Palaszczuk government confirmed it is providing $200 million to cash-strapped Virgin, with the airline having so far been unsuccessful in its request for a $1.4 billion loan from the federal government."

Call me a cynic but doesn't Ms. Palaszczuk have an election to fight in October.
Nothing like a coupla hundred mill to help secure a few more votes from the coupla thousand Virgin constituents.
Even better if you can promise something you probably won't have to spend. ;) :rolleyes:

[Buster Hyman]

Call me a cynic but doesn't Ms. Palaszczuk have an election to fight in October.
Nothing like a coupla hundred mill to help secure a few more votes from the coupla thousand Virgin constituents.
Even better if you promise something you probably won't have to spend. ;) :rolleyes:
Especially when..."The airline's headquarters would also need to remain in Brisbane"

[Oriana]

So, 3 Chinese airlines back Virgin. With bottomless pockets. Loss lead with pricing and kill off every other airline in Australia.

These guys are patient stalkers and plan way ahead of any Australian.

[Karunch]

Lets see how AJ tries to squash the Chinese backing. A government loan to VA might look the more attractive option at the moment.

[crosscutter]

Lets see how AJ tries to squash the Chinese backing.

I’m not sure he’ll have to say a word. Chinese students are getting bashed in the streets, Federal Labor are sharpening their attack, and Pauline Hanson... one can only imagine. Making Australia great again.

[The Bullwinkle]

Lets see how AJ tries to squash the Chinese backing. A government loan to VA might look the more attractive option at the moment.
Exactly! If they do come in with their deep pockets, the Leprechaun will probably wish he'd loaned VA the $1.4 Billion himself! :}

[VH-FTS]

Is it more likely the Chinese buyout story has been made up to play on Australia's current (and rampant) sinophobia to increase support for government funding?

[TWT]

This Chinese buyout story originated in the Courier Mail and the source of the information is not given.

Other news sources merely parroted the Courier Mail.

It hasn't been repeated on many other online news sites, such as the ABC or even the SMH or The Age.

I think you could be right VH-FTS
nnnnnn
nnnnnn

[directimped]

A good rule of thumb is to never believe anything you read in Rupert's rag.

Makes for good dunny paper if you run out.

[normanton]

It’s a stupid threat none the less.

Even if it does turn out to be true, the government still gets the final say on a foreign takeover.

Pauline Hanson will love this.

[Sue Ridgepipe]

Confirming Queensland's contribution, State Development Minister Cameron Dick says it is imperative Australia has two airlines to support tourism, jobs and regional investment.
"If we're going to get through this pandemic with two national airlines ... then all governments need to come together to ensure that is the case," he told reporters in Brisbane.
"Queensland can't do this on its own. This is a national airline weathering a national crisis and it needs a national response which is why we're asking the Australian government to take the lead on this."
Mr Dick said Queensland's support was conditional on debt restructuring, shareholders and bondholders doing their bit.
The airline's headquarters would also need to remain in Brisbane and regional flights would need to continue.
So it's imperative Australia has 2 airlines according to Mr. Dick, but only if Virgin stays in Qld. Does this mean if they pack up and relocate to Melbourne suddenly we no longer need 2 airlines and the Qld government would no longer be interested in trying to save them?

[B772]

Even EK are asking for "financial accommodation" from AMEDEO on existing leases for A380-800's and B777-300's.

[ampclamp]

"Mr Dick said the Queensland funding was conditional on Federal Government backing, as well as debt restructuring, shareholders and bond holders doing their bit, the airline keeping its headquarters in Brisbane, and ongoing regional flights".

That's one way of promising money you know won't ever be delivered.

[MickG0105]

"Mr Dick said the Queensland funding was conditional on Federal Government backing, as well as debt restructuring, shareholders and bond holders doing their bit, the airline keeping its headquarters in Brisbane, and ongoing regional flights".

That's one way of promising money you know won't ever be delivered.
Spot on. It is a straight up and down political play that Palaszczuk and Dick know that they'll never have to deliver on. The conditions that they have stipulated for the offer mean that no other state is going to chip in and on its own, the $200 million is insufficient to make any difference to Virgin's future.

It is a typically cynical Palaszczuk play that allows her to claim 'Gee, we tried when others did nothing' bragging rights without there ever being a real prospect that they will have to dirty their hands with what is going to be a very messy administration.

Oh, and the Deputy Premier gets to retain her skiing holiday destination for being seen to be trying to help out her good friends, the Scurrahs.

[601]

Queensland's Palaszczuk government confirmed it is providing $200 million to cash-strapped Virgin,
I didn't know that we had a money printing press in Qld.