Government Loan to Virgin Australia

[Icarus2001]

Now VA says they have 10+ buyers in the winds! So that magically happened overnight? I think Scurrah was taking the piss out of the tax payer, and quite frankly the piss out of Tigerair and VANZ staff that he just sacked on a dime. Yes interesting point but the "magnificent ten" are only interested now that the company is in voluntary administration, which gives the real possibility of walking away from the debt and grabbing a bargain. Only if creditors play ball of course. Also a malevolent former owner (an airline say) could make the process very difficult if they see a strategic advantage down the track.

[Synergies]

Oh! JB I hope you get a good night sleep tonight you derserve it. I hope your proud of your 10 years. Hope your shiny cars are sparkling as well.
They are so much more important than my heart attack I'm about to have. But don't worry about that JB you'll be fine.

Yep, pretty much sums it up !! ( take 2 😊 )

[chookcooker]

Thank God(us tax payers) that the govt held strong and didnt bail out VA. This would have been a bad signal to interfere way to much into the market and for tax payer money to be very badly spent on a risky loan to VA.
Now VA says they have 10+ buyers in the winds! So that magically happened overnight? I think Scurrah was taking the piss out of the tax payer, and quite frankly the piss out of Tigerair and VANZ staff that he just sacked on a dime.
What an arse IMHO.

what market??

[Fliegenmong]

Wondered where the 'True believer' had gotten to.

Lol!.. you funny bugger, guess you'll run to the Mods again now that it gets too hot for you huh?..."Oh Miss! Miss!!..Fliegenmong said..."

ha ha dobber!...get beaten up much as a kid did you buster?...pathetic..

[normanton]

Why would creditors allow someone to come in and buy it debt free when they can just liquidate the company and at least get something back? What am I missing here.

[chookcooker]

Because the whole is worth more than the sum of its parts.

[No Idea Either]

What am I missing here.

Obviously a lot Norm.......

[Buster Hyman]

ha ha dobber!...get beaten up much as a kid did you buster?...pathetic..
"Dobber"...you really are 12!

[KABOY]

Obviously a lot Norm.......
The best analogy for this situation is buying a phosphate mine in Nauru with all the heavy equipment included.

You buy it for a bargain, but what is the value of the business?

[34R]

I don't understand how PS can say there will be no redundancies. Is that not a decision the new investors/owners will make assuming they get one? He may well be first out the door.

There will be no redundancies during administration. Assuming a new investor/investors are found, once the new entity is formed then that may no longer be the case as it moves out of administration.

[Ragnor]

Interesting article in SMH today, Pg 20 Business section. Could it be VA has messed this administration up by using Deloitte?

[Buster Hyman]

Well whaddya know....:mad::mad:
But there is intense industry speculation the appointment could be challenged by KordaMentha, a rival firm. Industry sources made it clear on Wednesday that KordaMentha would like to be the administrator to Virgin.

In the past, KordaMentha successfully leveraged its relationship with unions to replace Grant Thornton as administrator of steel maker Arrium in 2016. It also took over the administration of Ansett in 2002, but in the years later faced criticism over how long that work took.

[Section28- BE]

Link here: https://www.abc.net.au/news/2020-04-23/coronavirus-queensland-virgin-australia-economic-fallout/12170160

Rgds
S28- BE

[Section28- BE]

Strewth Buster- WOW...........:eek::oh::cool:

Now we have The Band, accompanied by the original Percussion/& String Sections- with the original Road Crew (using the very same Playbook....)..............!!!

Rgds
S28- BE

[Buster Hyman]

(using the very same Playbook....)..............!!!
Indeed. The original Administrators for Ansett were dumped, rather tearfully actually, in order for KordaMentha to start their new business....for those unaware.

[rattman]

Indeed. The original Administrators for Ansett were dumped, rather tearfully actually, in order for KordaMentha to start their new business....for those unaware.

Thought it was the administrators were working for another company (andersons) and when they company appointed them administrators they left and formed their own company (kordamentha)

[DanV2]

Thought it was the administrators were working for another company (andersons) and when they company appointed them administrators they left and formed their own company (kordamentha)

Air New Zealand originally appointed PriceWaterhouseCoopers (PWC) as AN's administrators. Due to hostility by unions and other creditors, PWC was dumped in favour of Arthur Anderson who appointed Korda and Mentha (Both guys consequently left Arthur Anderson and formed their own company KordaMentha).

[Paragraph377]

Perhaps Kordamentha have **** in their own nest by the way they managed Ansett’s Administration? Aviators have long memories. Dragging out the Ansett Administration process and gleaning millions of dollars from potential creditors pockets so as to line their own could be the reason why they have not been successful this time around? Just a hypothesis.

[ECAMACTIONSCOMPLETE]

https://www.google.com.au/amp/s/amp.smh.com.au/business/companies/back-to-the-future-strategy-is-virgin-s-best-bet-for-survival-20200423-p54mi7.html

this is an excellent summary of the path Virgin should take

[The Bullwinkle]

Perhaps Kordamentha have **** in their own nest by the way they managed Ansett’s Administration? Aviators have long memories. Dragging out the Ansett Administration process and gleaning millions of dollars from potential creditors pockets so as to line their own could be the reason why they have not been successful this time around? Just a hypothesis.
You’re exactly right!
KordaMentha got over the line in the Ansett case because they had support of the unions back then.
No such support this time around.
And 10,000 employees who are all creditors will certainly exceed the 50% by number vote required for Deloitte.
A lot of ex-Ansett employees are now at Virgin and even those who aren’t ex-Ansett are fully supporting Deloitte.
KordaMentha will only be interested in KordaMentha and won’t give a flying f@#k for the employees.
Greedy bottom feeding scum!!!

[PPRuNeUser0198]

I don't understand how PS can say there will be no redundancies. Is that not a decision the new investors/owners will make assuming they get one? He may well be first out the door.

I can assure you there will be. And the promise of none during the administration is never a locked promise. They've looked at the remaining cash outflows, inflows and balance - and determined they have a few months left of operations which is all they need to determine the pathway for VA. But do not be fooled - at any time - this could change. Likely cheaper to keep people on (even on no pay or on leave) than to pay out redundancy costs.

And it will be a given that if VA comes out - the so-called 'lean, restructured business' will not need the same FTE that exists today. It will be a smaller footprint for sure. The '750' existed already, won't be the end of it.

[Des Dimona]

I would imagine any private equity investor will want to drag this out as long as possible to achieve the lowest sale price. This will factor heavily with the administrators who have a limited time frame in view of the cash remaining. At some stage, the decision will have to be made to appoint receivers if an agreed sale price can not be realised within the target time frame, otherwise, secured creditors will suffer.

To even think there won't be significant redundancies is wishful thinking.

[Icarus2001]

The article in the AFR gave the suggested time frame from Deloitte. Mid May for expressions of interest-proposals, signed up mid June for a "sale" by the end of June.

[halas]

As a union member in AN, l do not recall being asked about which of the big five (now four) would become administrator.

I suspect Arthur Anderson and the unions were in cahoots on a deal that would kick out Price Waterhouse.
This was too big an opportunity to let go.
And only with the unions blessing was this going to happen.

Obviously, after Enron and the wind-up, Ernst & Young were bringing in house the Anderson business,
Korda and Mentha were to put up $400k each to be a local partner, whilst bringing $65m over the next few years.
The rest is history.

Makes you wonder how much the union/officials/individuals got for allowing this to happen

halas

[chance]

It is hard to see how Deloitte will be able to put together a Deed of Company Arrangement that has a Sales and Purchasing Agreement that emboldens the "White Knights" and creditors to allow the Deed Administrators to do anything necessary or convenient to sort this out. It is a tall order to expect the white knights to settle the $5B to the major foreign shareholders then also fund the OPEX side of the new operation as it rebuilds. Then there is the matter of all the other creditors such as VAH staff and the extended supply chain also being in agreement. To fund VAH as going concern in some form will require circa $7B which is hard to see it happening among any of the 10 white knights when they see the books in some details. Give the skinny margins in the airline game of 5% return pa if you have a good year its going to take a very long time to pay back $7B out of the profits and then move forward. Its a big call to see it pulled off, but hopefully, some how it needs to happen.

[Icarus2001]

It is a tall order to expect the white knights to settle the $5B to the major foreign shareholders I may be wrong but I don't think that it is the shareholders in the main, that are owed the $5 billion. At least $2 billion was bonds issued in October 2019.

I agree it is a big ask to get all the parties that need to agree to this, to actually agree and sign up for a DOCA.

[flyingfrenchman]

I would strongly advise against some of the wishful thinking displayed here for your own benefit. VA in VA is not a good position to maintain employment for all pilots and take the fight to others. I understand the denial but it is setting you up for a double fall.

[Buster Hyman]

Air New Zealand originally appointed PriceWaterhouseCoopers (PWC) as AN's administrators. Due to hostility by unions and other creditors, PWC was dumped in favour of Arthur Anderson who appointed Korda and Mentha (Both guys consequently left Arthur Anderson and formed their own company KordaMentha).
Yes. PWC were looking at the industry as a whole & whether it was viable to keep it flying. They surmised that the best chance for creditors was to wind it up immediately. If they had, we probably would've gotten more cash wise, and sooner naturally.

As a union member in AN, l do not recall being asked about which of the big five (now four) would become administrator.

I suspect Arthur Anderson and the unions were in cahoots on a deal that would kick out Price Waterhouse.
This was too big an opportunity to let go.
And only with the unions blessing was this going to happen.

Obviously, after Enron and the wind-up, Ernst & Young were bringing in house the Anderson business,
Korda and Mentha were to put up $400k each to be a local partner, whilst bringing $65m over the next few years.
The rest is history.

Makes you wonder how much the union/officials/individuals got for allowing this to happen

halas
The Unions wanted it kept flying and in hindsight, we see that their power diminished in the workplace once it was gone. Staff are merely an afterthought to all of these 'players'.

[vhtae]

Here’s the ACTU statement at the time for Ansett

https://www.actu.org.au/actu-media/archives/2001/new-administrators-appointed-to-ansett

[SHVC]

So how does this play out?
VA get a new name can't keep paying that knuckle head in the UK the ridicules money that has been paid
330s gone, ATRs gone both expensive machine to operate ATR especially considering half the work force are in BN and not even having a base there, 777 well nothing really been mentioned there. The real question is what comes of the 737 how many remain and what will the new product be, I would think they will try and continue the high end market (AC are already configured etc) with a lean much less payed crew, maybe even less than JQ. Consider these crew have had the threat of no employment, loosing their jobs so they will be keen to do what ever it takes to get things going.

[B772]

I can see some problems looming:

1) Deloittes may have disqualified themselves from the role of administrator.

2) Some unsecured 'junk' bond holders may make it difficult for the administrators who ever they may be and UBS with the possibility of legal action.

3) I was surprised to see Scurrah conduct the recent press conference with Strawbridge. It should have been the other way around.

4) I am surprised at some of the statements being made by Scurrah and Strawbridge, even after allowing for the statements being made in Queensland.

5) I will be surprised if a deed of company arrangement can be offered to the VA directors by the administrator.

6) The employees are behind the secured creditors and the lenders who hold mortgages over aircraft.

7) On 01/07/2019 Moody's reported the airline had loans of $3B against the fleet and owed $2.6B on aircraft operating leases.

8) If BGH and partner(s) were to make an acceptable offer to the administrator the airline base will be in Melbourne sans Scurrah who is seen as being a slow mover by his lack of action. The Virgin name will be consigned to the history books. .

9) Interest from Apollo Global and Oaktree Capital most likely would see Virgin broken up by asset stripping.

10) What happens with VA will be decided by 30/06/2020 and influenced by the number of carriers who go broke each day between and late May 2020.

Ps. Forget about Branson being a white knight for VA. There is a possibility Virgin Atlantic may fall over if Delta decide to walk away from Virgin Atlantic to save themselves. Similar to what Air New Zealand did with Ansett.

[Led Zeppelin]

The best option for the creditors may well be to preserve the cash and immediately appoint receivers to disburse the available funds. Not sure if the creditors could force this or it would need to come from the administrators, who at this stage, still seem to be working out the true position.

[Icarus2001]

I was surprised to see Scurrah conduct the recent press conference with Strawbridge. It should have been the other way around.
Good pick up. Scurrah did not even need to be there.

[Section28- BE]

Hmmm-

'772' et-al, yes agree............, on all.

Point #1: PwC got 'rolled' on the AN Gig (back when) for, a consultation off-shore (not one of consequence- given current media quotations.. on the VAH gig- 'I' Believe????) in NZ with an NZ domiciled and registered entity, same Brand- but, NOT an entity inside the AU border/economic zone............... nor, were the contracting 'client'/entity .......???? from Memory?????

'772/& Icarus' Point #3- Roger That.... in Spades!!!!

The Rodeo 'begins'- once more............

Rgds
S28- BE

[B772]

Air Mauritius now in administration. Four units of Norwegian has filed for bankruptcy grounding 1,571 pilots and 3,134 cabin crew.

[Paragraph377]

Air Mauritius now in administration. Four units of Norwegian has filed for bankruptcy grounding 1,571 pilots and 3,134 cabin crew.So COVID-19 kills around 160 people per day worldwide. No death is a good death, however in comparison;


There are approximately 26,000 deaths per day from Cancer worldwide.
Coronary deaths are around 25,000 per day.
Diabetes deaths are around 4,400 per day.
Suicide takes around 2,000 to 3,000 lives per day.
Vector borne diseases (spread by animals) account for 700,000 deaths per year, of which at least 440,000 are by mosquitos alone through transmitting malaria and dengue fever which is around 1,205 per day.
Homicide takes around 1,270 lives per day.
378 people die from snakebite each day.

Now, I don’t wear a tinfoil hat and I know the illnesses above aren’t spread by cough droplets, but FFS enough is enough. Give people their lives, liberty and freedom back and end this global lunacy at the hands of Governments. Have they never heard the saying ‘the cure is worse than the cause’? This is bull****! People are losing their livelihood, their future, their soul. Millions upon millions of jobs, businesses, all gone. Years of recovery ahead of the world! The madness has to stop.

[Xulu]

So COVID-19 kills around 160 people per day worldwide. No death is a good death, however in comparison;

There are approximately 26,000 deaths per day from Cancer worldwide.
Coronary deaths are around 25,000 per day.
Diabetes deaths are around 4,400 per day.
Suicide takes around 2,000 to 3,000 lives per day.
Vector borne diseases (spread by animals) account for 700,000 deaths per year, of which at least 440,000 are by mosquitos alone through transmitting malaria and dengue fever which is around 1,205 per day.
Homicide takes around 1,270 lives per day.
378 people die from snakebite each day.

Now, I don’t wear a tinfoil hat and I know the illnesses above aren’t spread by cough droplets, but FFS enough is enough. Give people their lives, liberty and freedom back and end this global lunacy at the hands of Governments. Have they never heard the saying ‘the cure is worse than the cause’? This is bull****! People are losing their livelihood, their future, their soul. Millions upon millions of jobs, businesses, all gone. Years of recovery ahead of the world! The madness has to stop.


160 a day worldwide? UK alone is 7-800 a day of which it’s being assessed to be double in reality due to mis-reporting of others.

Worldwide the figure is at 7000 daily deaths before mis-reporting.

If there wasn’t a lockdown, it’d soon be hundreds of thousands of deaths per day until herd immunity built up. Very quickly COVID-19 would climb to the top of your charts if left to its own devices.

Thats why staying at home until we’re better prepared isn’t madness.

[oicur12.again]

“This is bull****! People are losing their livelihood, their future, their soul. Millions upon millions of jobs, businesses, all gone. Years of recovery ahead of the world! The madness has to stop.”

Maybe, but this downturn was going to be the biggest economic contraction for decades without Corona. You cannot pump trillions of worthless fiat into a global economy and expect it never to go bang.

For sure the virus has made it worse and the has made the collapse much faster but make no mistake central bankers all over the western world are keen to ensure as much blame as possible is misdirected to corona lest the real blame fall at their feet due to decades of mismanagement.

The CARES stimulus here in the US is yet another bail out for investor class malfeasance.

[Sunfish]

Paragraph337, if you don’t do lockdown, you will destroy the entire health system, closely followed. by Western societies as supply chains lock up and starving people start rioting, followed by looting and destruction.

No one is going to work if they cannot be offered the prospect of medical attention if they have an accident or fall ill.

[markontop]

Agreed Sunfish, however if you don’t have an economy you can’t afford to run a health system. Impossible dilemma. People without employment and income will also riot no matter what the state of the health system.
This is triple problem, economy, health and political. Lockdown is for some an easy decision as most of those in favour have employment and income certainty regardless. That would be politicians and public servants not forgetting self funded individuals.

[The Bullwinkle]

So COVID-19 kills around 160 people per day worldwide. No death is a good death, however in comparison;

There are approximately 26,000 deaths per day from Cancer worldwide.
Coronary deaths are around 25,000 per day.
Diabetes deaths are around 4,400 per day.
Suicide takes around 2,000 to 3,000 lives per day.
Vector borne diseases (spread by animals) account for 700,000 deaths per year, of which at least 440,000 are by mosquitos alone through transmitting malaria and dengue fever which is around 1,205 per day.
Homicide takes around 1,270 lives per day.
378 people die from snakebite each day.

Now, I don’t wear a tinfoil hat and I know the illnesses above aren’t spread by cough droplets, but FFS enough is enough. Give people their lives, liberty and freedom back and end this global lunacy at the hands of Governments. Have they never heard the saying ‘the cure is worse than the cause’? This is bull****! People are losing their livelihood, their future, their soul. Millions upon millions of jobs, businesses, all gone. Years of recovery ahead of the world! The madness has to stop.

Don’t forget the road toll.
By the end of March, 286 people had died on Australia’s roads, almost 4 times the Australian Coronavirus death toll. So let’s ban driving until we reduce that total to a more acceptable level!!!

I agree that this bull**** has to stop before the cure kills more people than the disease.
These lockdown laws are increasing the death toll amongst the young in our communities.

https://www.news.com.au/lifestyle/health/health-problems/coronavirus-teen-dies-after-suicide-attempt-due-to-isolation/news-story/9ed19548c4b06246d9f07e972334394c

https://www.legit.ng/1321651-covid-19-23-year-law-graduate-commits-suicide-28-day-lockdown.html

https://thewomenjournal.com/2020/04/17-year-old-singer-commit-suicide-because-lockdown-felt-like-300-years/

https://www.deccanherald.com/national/coronavirus-man-commits-suicide-as-he-missed-wife-in-lockdown-823182.html

https://nypost.com/2020/04/12/teen-commits-suicide-likely-over-stress-from-coronavirus-lockdown/

[machtuk]

Nobody wins here, Carpet bombing the nation to protect the people might sound plausible but at the end of the day we have mostly healthy people now living in a terminally ill ecomnomy!
RIP common sense!

[kingRB]

Maybe, but this downturn was going to be the biggest economic contraction for decades without Corona. You cannot pump trillions of worthless fiat into a global economy and expect it never to go bang.


and the Fed is only just getting started!

[Paragraph377]

and the Fed is only just getting started!
Agreed!! They are kicking the can further down the road. Meanwhile the bubble grows, and grows, and grows.....When it bursts (and the cracks in the dam wall are growing) 40+ years of fiat money and inventive ‘monetary’ policy is going to be very ugly. The GPWS has been sounding for a while now. Brace brace brace.

[The Shovel]

Branson is not coming to save the airline.
Which makes his video lampooning the Federal Government for not bailing out his airline even more offensive.
https://www.businessinsider.com/richard-branson-offers-up-private-island-to-save-virgin-airlines-2020-4

[markontop]

Maybe play his cheque ripping stunt in reverse?

[Turnleft080]

Add to the list WHO and pharmaceutical companies. They are married together. Drugs are designed to maintain your illness. If they were designed to cure you they would all go broke.
i.e. drugs suppress your immune system your saviour to defeating all bad bacteria and viruses. If people realised this the
only reason you would need to go to hospital is for lacerations and broken bones. Your body heals the rest. Why are we the sickest species still on this planet? Pets are our 2nd sickest because we feed them tin and packaged food.
The healthiest is our wild animals. When was the last time a giraffe, hippo, tiger, or lion ate junk food and dropped in to the local chemist to lower their high blood pressure or cholesterol.
They use the planet resources to have a healthy life so should we. Sorry getting angry frustrated back to saving an airline which we will.
https://youtu.be/h2RlQc-clck

Well this just came out 24 hours after my post BS hey goto 7.45 their's your typhoid fixed.

[TACQANAVIAVEC]

What a load of BS.....If your premise was true then why aren't millions in the developing world "still" dying from Malaria, Typhoid etc? The majority of people who live with long term illnesses or diseases are due to life style changes not some fake ass Vaccine conspiracy. Big pharma doesn't need to come up with a sophisticated scam to make people sick, people do it to themselves by making Burger Kings, KFC, Mc Donalds a regular part of their diet, accompanied these highly nutritious meals with a lovely high fructose diabetic cocktail called Coke and then topping it off with cancerlicious relaxing dose of nicotine!!

[ruprecht]

Add to the list WHO and pharmaceutical companies. They are married together. Drugs are designed to maintain your illness. If they were designed to cure you they would all go broke.
i.e. drugs suppress your immune system your saviour to defeating all bad bacteria and viruses. If people realised this the
only reason you would need to go to hospital is for lacerations and broken bones. Your body heals the rest. Why are we the sickest species still on this planet?
The healthiest is our wild animals. When was the last time a giraffe, hippo, tiger, or lion ate junk food and dropped in to the local chemist to lower their high blood pressure or cholesterol.
They use the planet resources to have a healthy life so should we. Sorry getting angry frustrated back to saving an airline which we will.

That explains where all the aluminium foil went...

[Buster Hyman]

That explains where all the aluminium foil went...
Doesn't explain the toilet paper though...:}

[Section28- BE]

ABC article on the ASX today link: https://www.abc.net.au/news/2020-04-24/asx-wall-street-modest-gains-coronavirus-drug-disappoints/12180628

Extract here:
"Qantas shares had risen 1.8 per cent to $3.40, despite a warning from the competition regulator (https://www.abc.net.au/news/2020-04-24/accc-boss-rod-sims-anti-competitive-qantas-virgin/12178208) it would take swift action if the airline engaged in any anti-competitive behaviour, following Virgin Australia entering voluntary administration

Virgin's administrator, Deloitte, said the company owed $6.9 billion to more than 10,000 creditors, following an initial review."

Rgds
S28- BE

[LostWanderer]

ABC article on the ASX today link: https://www.abc.net.au/news/2020-04-24/asx-wall-street-modest-gains-coronavirus-drug-disappoints/12180628

Extract here:


Rgds
S28- BE

So that's now around 2 billion more debt than the previous estimate?

[Led Zeppelin]

Virgin's administrator, Deloitte, said the company owed $6.9 billion

That's almost 40% more than the publically canvassed figure of $ 5 billion and is an awful lot of debt to manage through a voluntary administration.

[-41]

Is there a credible ASX link to the $6.8 B referenced here?

[crosscutter]

$450M employee entitlements. Does this figure assume redundancy provisions? It’s around 50k per employee.

[Des Dimona]

It will be very difficult to manage this through a restructure, given the true debt level may rise above $7 billion. Unless there is some very creative thinking about solutions, that would make receivership almost unavoidable.

[-41]

$7Billion is a long way from $5Billion this is looking terminal under the current conditions.

[B772]

Wow, last week we were told the debt was $4.8B, now we are told it is $6.9B. We know Scurrah asked the taxpayers for $1.4B. Now we learn there were a total of 9 requests. He kept watering the $1.4B amount down after being continually rejected until his last request was for $200M. WTF !

Just to prove Scurrah did not have a clue about the Virgin dilemma he stood in front of staff on 06/11/19 saying things such as we run a strong airline. The reality being not only were the liabilities much greater than the assets but the total annual revenue was less than the debt. Scurrah even purchased VA shares and bonds in November 2019. He must have been tempted by the unsecured 8% per annum.

I now understand the number of interested parties has dwindled in numbers.

[George Glass]

Add to the list WHO and pharmaceutical companies. They are married together. Drugs are designed to maintain your illness. If they were designed to cure you they would all go broke.
i.e. drugs suppress your immune system your saviour to defeating all bad bacteria and viruses. If people realised this the
only reason you would need to go to hospital is for lacerations and broken bones. Your body heals the rest. Why are we the sickest species still on this planet?
The healthiest is our wild animals. When was the last time a giraffe, hippo, tiger, or lion ate junk food and dropped in to the local chemist to lower their high blood pressure or cholesterol.
They use the planet resources to have a healthy life so should we. Sorry getting angry frustrated back to saving an airline which we will.

“And the 2020 Darwin Award goes to...............”

[Half Baked]

I never have liked this weasel.

Perhaps he he should listen to his own loud mouthed advice!

https://www.thelondoneconomic.com/business-economics/richard-branson-reminded-of-comments-as-virgin-appeals-for-government-support/21/04/


bloody parasite!

[kingRB]

Perth making sure Deloitte isn't forgetting them

Dramatic twist in the collapse of Virgin Australia as bulldozers and trucks are used to block planes from taking off until their debts are repaid (https://www.dailymail.co.uk/news/article-8252315/Extraordinary-twist-collapse-Virgin-Australia.html)

[B772]

Ed Bastian the head of Delta and the 49% owner of Virgin Atlantic has turned down a request by Virgin Atlantic for a capital injection. He went on to say he expects Virgin Atlantic to be placed under administration shortly. As Richard Branson is loathed by the establishment in the U.K Virgin Atlantic may find it difficult to raise funds in their own name.

[SHVC]

That’s full on Perth airport doing that 3 737s should cover the fees owed, just shows everyone is being affected by this.

[B772]

Perth Airport website shows the long term aircraft storage parking cost is $473.425 per day. For 3 a/c this is over $43,460 per month. The total cost for the fleet would be considerable.

[Buttscratcher]

Rancid parking inspectors!
Parasites.
Man, I hate those guys!

[KRviator]

Perth making sure Deloitte isn't forgetting them

Dramatic twist in the collapse of Virgin Australia as bulldozers and trucks are used to block planes from taking off until their debts are repaid (https://www.dailymail.co.uk/news/article-8252315/Extraordinary-twist-collapse-Virgin-Australia.html)Perhaps someone should tell Perth Airport to put the loader behind the plane. One would imagine the terminal building is a far more substantial obstruction to it departing fowards....

"Four planes are being blocked by airport vehicles to stop a towbar from being attached to them." Nothing at all stopping Virgin hooking one of those you-beaut remote controlled towbars on the main gear though...
https://www.abc.net.au/news/image/12183518-3x2-940x627.jpg

[NumptyAussie]

Perhaps someone should tell Perth Airport to put the loader behind the plane. One would imagine the terminal building is a far more substantial obstruction to it departing fowards....
https://www.abc.net.au/news/image/12183518-3x2-940x627.jpg

Please tell me that you are being sarcastic...
(in case you're not, the front is where the tug goes...)

[KRviator]

Please tell me that you are being sarcastic...
(in case you're not, the front is where the tug goes...)Not always...
Not always....

[ifylofd]

Funny how despite how much (was it like 14 Million AUD) Perth airport are in dispute with Qantas over unpaid fee's, haven't seen any Caterpillars parked in front of or behind any of their tails have you?

[Car RAMROD]

No tug required........with enough people!

https://youtu.be/Gj2yNAKKSPA

[Square Bear]

iflylofd,

There is a difference, QF is in a legal Dispute with PER Airport, and quite possibly could manage to the make good the disputed ammount should a judgement direct, whereas VA is looking less likely by the day to pay any outstanding debt whatsoever.

Don’t blame PER Airport Admin, blame the VA Management of past. 😢

[Icarus2001]

Perth airport are in dispute with Qantas over unpaid fee's, haven't seen any Caterpillars parked in front of or behind any of their tails have you? Perhaps because QF are not in administration with debts of MORE THAN $7 billion.

[Wizofoz]

Add to the list WHO and pharmaceutical companies. They are married together. Drugs are designed to maintain your illness. If they were designed to cure you they would all go broke.
i.e. drugs suppress your immune system your saviour to defeating all bad bacteria and viruses. If people realised this the
only reason you would need to go to hospital is for lacerations and broken bones. Your body heals the rest. Why are we the sickest species still on this planet? Pets are our 2nd sickest because we feed them tin and packaged food.
The healthiest is our wild animals. When was the last time a giraffe, hippo, tiger, or lion ate junk food and dropped in to the local chemist to lower their high blood pressure or cholesterol.
They use the planet resources to have a healthy life so should we. Sorry getting angry frustrated back to saving an airline which we will.
https://youtu.be/h2RlQc-clck

Well this just came out 24 hours after my post BS hey goto 7.45 their's your typhoid fixed.

You know that 99.9% of all species that have ever existed have gone extinct, right?

[2020Balance]

How’s B Rayner going to keep current and get over to Bne to grease his pole now ?

[Sunfish]

I hope Perth airport desists by Anzac day morning. Their behaviour is the type that brings on a bankruptcy. It also suggests QF dirty tricks to me. If Virgin were flying to Perth, they won’t from now on.

[Chris2303]

A silly move by Perth Airport.

Let's say I own an airline (I'm not that stupid) and I want to fly to Perth, but I've seen Perth airport do something stupid with a JCB to another airline's airplane for reasons best known to themselves.

I'd be saying stuff this, they can obviously do without me.

[cloudsurfng]

I hope Perth airport desists by Anzac day morning. Their behaviour is the type that brings on a bankruptcy. It also suggests QF dirty tricks to me. If Virgin were flying to Perth, they won’t from now on.

Im sure you would love that to be true, but seriously....

’hey Perth airport, it’s Alan. Good thanks. Hey can you go and park some stuff around some VA planes that they aren’t using? Yes yes I know we’ve been in court for years over unpaid fees, all good though, just go and block a few unused aircraft for me will ya? BTW I’m just going to release a statement saying what a bunch of knobs you are too OK?’

[KRviator]

Airports have form on this. Even Australian airports. Remember the QF 737 held hostage (https://www.abc.net.au/news/2018-05-25/qantas-canberra-airport-war-erupts/9798886) at Cant-berra a few years ago?

[itsnotthatbloodyhard]

It also suggests QF dirty tricks to me.

Of course it does.
:rolleyes::rolleyes::rolleyes::rolleyes:

[Sunfish]

I have no evidence for my assertion about QF dirty tricks. However the action is stupid on Four levels.

1. The aircraft are not required by Virgin ATM. The aircraft can sit and rot for all the administration cares. They are also blocking at least one gate. I would imagine terminal access is also closed.

2. Perth Airport is not going to improve its position as a creditor by this action. The aircraft are probably not owned by the airline so blackmailing is unlikely to succeed.

3. Virgin may not provide further services to WA as a result.

4. The action sends a powerful signal to the general public that Perth Airport does not expect Virgin to survive.


Why would anyone do something so stupid? My guess is they got a “confidential” tip that VB was going under. Who would say such a thing? Who benefits?

[Double_Clutch]

It is clear that the bulldozer driver didn’t read the memo correctly.
The genius parked it in front of an aircraft in long term storage! It’s not going anywhere with all the tape on it.

Nice stunt - clearly the Perth airport PR hamster wheel is in full swing........ and the media bought it (again).

[Section28- BE]

Link to Deloitte's page on the matter/Administration: www.deloitte.com/au/virgin (http://www.deloitte.com/au/virgin)

Rgds
S28- BE

[SHVC]

I have no evidence for my assertion about QF dirty tricks. However the action is stupid on Four levels.

1. The aircraft are not required by Virgin ATM. The aircraft can sit and rot for all the administration cares. They are also blocking at least one gate. I would imagine terminal access is also closed.

2. Perth Airport is not going to improve its position as a creditor by this action. The aircraft are probably not owned by the airline so blackmailing is unlikely to succeed.

3. Virgin may not provide further services to WA as a result.

4. The action sends a powerful signal to the general public that Perth Airport does not expect Virgin to survive.


Why would anyone do something so stupid? My guess is they got a “confidential” tip that VB was going under. Who would say such a thing? Who benefits?

I don't think point 3 would be entirely correct. If W.A need more services, anyone that can provide them will. It is unfortunate but PH do have the upper hand here, VA need a place to operate out of and I don't see any major player near PH airport.

[itsnotthatbloodyhard]

Why would anyone do something so stupid? My guess is they got a “confidential” tip that VB was going under.

Or maybe they just follow the news and noticed that Virgin have gone into administration with debts of around $7 billion? I completely agree with your points 1-4, though.

[George Glass]

No need to fabricate “ dirty trick “ conspiracy theories.
I remember when Compass went bust. First to know were the refuelers who started demanding cash.
Then followed the yellow sticker on the nose-gear putting a lien on the aircraft.
Perth Airport has a history of clumsy disputes with tenants.

[regional_flyer]

I hope Perth airport desists by Anzac day morning. Their behaviour is the type that brings on a bankruptcy. It also suggests QF dirty tricks to me. If Virgin were flying to Perth, they won’t from now on.

Except, Qantas has already come out against Perth Airport's tactics.

'Even by Perth Airport’s standards, this is extraordinary behaviour,' Qantas said in a statement on Friday.

'Protecting your interests is one thing but parking a bulldozer in front of an aircraft while saying you’re "working to secure an agreement’ is ridiculous.

'It’s no way to treat a customer of 20 years. This kind of action is deeply worrying for all users of Perth Airport.'

[Buster Hyman]

Put on a shuttle Bus & fly to Busselton until they pull their heads in! :}:}:}

[Beer Baron]

It also suggests QF dirty tricks to me.
I have no evidence for my assertion about QF dirty tricks.
Your escalating, absurd, vitriolic rants against Qantas are getting out of hand Sunfish. You might feel like a very clever industry observer but your posts relating to QF have more in common with a lunatic yelling at the sky.

[Paragraph377]

Except, Qantas has already come out against Perth Airport's tactics.

'Even by Perth Airport’s standards, this is extraordinary behaviour,' Qantas said in a statement on Friday.

'Protecting your interests is one thing but parking a bulldozer in front of an aircraft while saying you’re "working to secure an agreement’ is ridiculous.

'It’s no way to treat a customer of 20 years. This kind of action is deeply worrying for all users of Perth Airport.'
If the Perth Airport Board had any decency, which is unlikely, they would punt the bald foolish Scottish CEO effective immediately. Why? Well apart from the obvious - he is a ****** and an antognist with no thought about others, it doesn’t well serve the reputation of Perth airport in general or Western Australia. The weakling used his lapdog Deb Blaskett to do the dirty work too. As much as I despise Joyce, I hope QF stretch out their fees and charges payments to the Perth airport corporation for as long as possible!

[halas]

@Sunfish. Perth airport don't give a stuff about any of your points. If they did, this wouldn't even think of doing this.

More importantly, this is nothing but an attention seeking publicity stunt.

If they were serious about VA debt, they would be blocking the VARA FIFO flights, not some abandoned mainline hull.

Now if they did do that, they would seriously get in the **** with the government and the mining council.

Hence, why they did not.

halas

[TooFiddy]

I have a lot of sympathy for VA mates who are ex-Ansett and already been through this once and are now facing unemployment again.
Same with the newer lot who joined an established airline and thought they had a career for as long as they wanted it.
But the ones who were there with Branson in 2000 and 2001, be they pilot or ground staff, laughing and cheering and screaming at the imminent collapse of Ansett and the thousands of job losses get no sympathy whatsoever. You frothed at the opportunity to further your own cause at the expense of people who'd been working in a 65yo airline and now it looks like happening to you.
That niggly pain you're feeling is karma biting you squarely on the arse. Learn from it.

[Paragraph377]

I have a lot of sympathy for VA mates who are ex-Ansett and already been through this once and are now facing unemployment again.
Same with the newer lot who joined an established airline and thought they had a career for as long as they wanted it.
But the ones who were there with Branson in 2000 and 2001, be they pilot or ground staff, laughing and cheering and screaming at the imminent collapse of Ansett and the thousands of job losses get no sympathy whatsoever. You frothed at the opportunity to further your own cause at the expense of people who'd been working in a 65yo airline and now it looks like happening to you.
That niggly pain you're feeling is karma biting you squarely on the arse. Learn from it.
I was working in a Consultative role on the day that Ansett’s last Brisbane domestic flight pulled into the Brisbane domestic terminal. From memory it was onto Bay 39 or 40. The then Virgin Blue had aircraft on the adjacent satellite standoff bays, so the AN plane taxiied by quite close. Virgin ramp staff could be seen waving at the aircraft AND giving it the finger and laughing. AN staff unloaded their aircraft and VB staff drove nearbye on their tugs and were again laughing and giving the AN ground staff the finger. I will not only never forget that, but I was absolutely shocked and disgusted. Ansett, although financially failing, always offered superb service and looked and acted professional. The Virgin reaction was unbelievably disgusting. I am glad they eventually grew up somewhat and can only hope that none of their people received a return serve the day they went into Administration. It’s just not cricket.

[VH-ABC]

I was working in a Consultative role on the day that Ansett’s last Brisbane domestic flight pulled into the Brisbane domestic terminal. From memory it was onto Bay 39 or 40. The then Virgin Blue had aircraft on the adjacent satellite standoff bays, so the AN plane taxiied by quite close. Virgin ramp staff could be seen waving at the aircraft AND giving it the finger and laughing. AN staff unloaded their aircraft and VB staff drove nearbye on their tugs and were again laughing and giving the AN ground staff the finger. I will not only never forget that, but I was absolutely shocked and disgusted. Ansett, although financially failing, always offered superb service and looked and acted professional. The Virgin reaction was unbelievably disgusting. I am glad they eventually grew up somewhat and can only hope that none of their people received a return serve the day they went into Administration. It’s just not cricket.


The Virgin reaction? Only a bitter old fool would think the actions of some were the feelings of all. Tuck it in pal.

[Paragraph377]

The Virgin reaction? Only a bitter old fool would think the actions of some were the feelings of all. Tuck it in pal.
Emotive statement by you, muppet. I never blamed the entire airline for those actions on that day. Harden up princess.

[Sunfish]

Beer Baron: Your escalating, absurd, vitriolic rants against Qantas are getting out of hand Sunfish. You might feel like a very clever industry observer but your posts relating to QF have more in common with a lunatic yelling at the sky.

Who do you work for? Qantas by any chance? Why do you think ScoMo appointed Nick Moore to ride shotgun for the Virgin administrators?

[George Glass]

But here’s the thing Sunfish . You’re not addressing the issue . Why do you make unsubstantiated claims , that will certainly be proved wrong , for no other purpose than to continue your vendetta against QF ? Its unhinged . It contributes nothing . You don’t have a dog in the fight other than a foaming at the mouth sense of grievance. Why do you do it ?

[Sunfish]

George, I have made it quite clear that my animus with Qantas is economic. Foreign investment is critical to Australia. Every study of inbound foreign investment behaviour demonstrates that direct international flights to potential investment locations is a critical factor in deciding where the investment is made.

‘’I know for a fact that the Qantas practice of “hubbing most international flights out of Sydney during the 1970’sand 1980’s at least skewed foreign investment, principally in banking and IT disproportionately to NSW. It was deliberate and it cost QLD,VIC,SA a fortune in lost investment. The bias towards Sydney is NOT the behaviour of a business that claims to be a national airline, especially at the time it was taxpayer owned.

As for Qantas staff and operations, I have most always been delighted by their professionalism and training...most of the time. I wish all of them well. I probably did YMEL,YSYD,LHR at least six times during the 70’s and 80’s since I had British family to visit. The QF staff were awesome, not so being dragged to Sydney after 20 + hours from LHR, and having to wait for three+ hours while the aircraft was cleaned and refurbished before boarding for the flight to Melbourne. What QF was effectively doing was ensuring Brisbane, Melbourne and Adelaide were four hours further from New York and London than Sydney.

I am also not a fan of the previous managements failed attempt to steal, sorry, take over, the airline as well as its horrible treatment of its staff, particularly its engineers.

And you know what? Left to its own devices Qantas will do it again and strangle economic development outside NSW. THAT is why Brisbane Melbourne and Sydney state governments are prepared to fight to get Virgin, not the airline jobs..

‘’To put it another way, Qantas is not acting in the nations best interests, therefore it should not be accorded the status of a national airline and the associated political clout.

‘’Do I make myself clear?

[normanton]

‘’Do I make myself clear?
Nope. How many times did Qantas reject your application?

[Beer Baron]

Air New Zealand overwhelmingly operate international flights out of Auckland. British Airways operate predominantly out of London. Air France out of Paris. Etc, etc.

Do the residents of Christchurch, Wellington, Manchester, Liverpool, Marseille, Lyon, etc, etc, bitch and moan that their national carrier is trying to screw then over??

It’s the hub and spoke airline model used by countless carriers across the globe, most people understand the economic imperative of it.

As you proudly boast of not having flown Qantas internationally for a decade you may not be aware that you can get from Melbourne or Brisbane to London, New York, Tokyo, Hong Kong or LA in just as few stops as the lucky residents of Sydney.
I can’t imagine why Qantas offer these services when their guiding principal of business is to crush the Victorian and Queensland economies.

[Sunfish]

Beer Baron, I have a long memory. The problem is that post covid19 we may be stuck with a QF virtual monopoly like we had in the 60’s to the 80’s. Post Covid, Australia will again need foreign investment. Unless government or market action is taken, Sydney will steal a disproportionate share.

‘’If we are talking non stop flights for example, they had better not all terminate In ******* sydeny.(sic).

[Section28- BE]

Just, Fcukin- WOW !!!!!!!!!!!!! AVIATION Aye..........

'Guys'- nil WIN/Result in this/your ****ting Comp!!!! and Indeed, you maybe- correct in 'your' own Idaho.........., however- whatever!!!!

'Icarus2010'- has tried..............., for 'Mine', 'I' will/shall 'try' and assemble some links for 'the' folk THAT ARE IN this '****e-fight' that, maybe 'useful'........., Or NOT- Stuffs Me

e.g. the term- ‘majority in number and value’

The 'assembled' Rocket Technicians shall BE allover, How 'that' GIG, Rolls OUT!!!!

Be nice to each other/& look after yourselves.
Best wishes & sincere Regards
S28- BE

[Sunfish]

I think Virgin may have had it.

Virgin Australia owes thousands of creditors nearly $7 billion as fresh details of the failed airline's finances shed light on how difficult it would have been for the carrier to strike any rescue deal.]

https://www.theage.com.au/business/companies/failed-airline-virgin-australia-owes-nearly-7b-to-thousands-of-creditors-20200424-p54my4.html

[601]

Air New Zealand overwhelmingly operate international flights out of Auckland. British Airways operate predominantly out of London. Air France out of Paris. Etc, etc.

Do the residents of Christchurch, Wellington, Manchester, Liverpool, Marseille, Lyon, etc, etc, bitch and moan that their national carrier is trying to screw then over??

You could fit all of those cities within spitting distance of SY.
Explain why QF flies, or did fly, to more than one destination in the US and little old NZ.

[Chris2303]

‘’I know for a fact that the Qantas practice of “hubbing most international flights out of Sydney during the 1970s and 1980s at least skewed foreign investment, principally in banking and IT disproportionately to NSW. It was deliberate and it cost QLD,VIC,SA a fortune in lost investment. The bias towards Sydney is NOT the behaviour of a business that claims to be a national airline, especially at the time it was taxpayer owned.

That's not a problem created by QF, that's a problem created by Australia's system of Government. If you had one Government for the whole country like NZ and England and Eire do, it is unlikely you would have this problem. Besides, hasn't SYD been the dominant city right back to the beginning of white settlement?

Besides - define "fact"

But I'm following somebody else's off topic chase down the rabbit hole - I'm sorry

[krismiler]

Back in the 1970s and 1980s it was expected that you needed to go to a country's main city for a long haul flight, it wasn't much of a problem as you could only afford to do it a few times in your life. British Airways routing was LHR - BAH - SIN - PER - SYD. Brisbane didn't even have any night life, let alone a need for one stop to Europe. The Middle East airlines were able to make secondary cities viable because they could connect passengers through a hub. Emirates can offer Adelaide to Glasgow with one stop, QF can't.

In the UK, the equivalent of the entire population of Australia live within a reasonable travelling time by road and rail from Heathrow.

[Sunfish]

krsmiler, Brisbane and Melbourne are not “secondary” cities in any case. Furthermore even cities like Glasgow, Liverpool, etc now have direct international links.

[morno]

OMFG :ugh::ugh:

Are you really this thick in real life Sunfish?

QF will send their flights via the cities which will provide the best return. It’s simple economics buddy.

Like someone else said, in your ****hole, you can go direct to almost as many cities as Sydney on QF.

[George Glass]

George, I have made it quite clear that my animus with Qantas is economic. Foreign investment is critical to Australia. Every study of inbound foreign investment behaviour demonstrates that direct international flights to potential investment locations is a critical factor in deciding where the investment is made.

‘’I know for a fact that the Qantas practice of “hubbing most international flights out of Sydney during the 1970’sand 1980’s at least skewed foreign investment, principally in banking and IT disproportionately to NSW. It was deliberate and it cost QLD,VIC,SA a fortune in lost investment. The bias towards Sydney is NOT the behaviour of a business that claims to be a national airline, especially at the time it was taxpayer owned.

As for Qantas staff and operations, I have most always been delighted by their professionalism and training...most of the time. I wish all of them well. I probably did YMEL,YSYD,LHR at least six times during the 70’s and 80’s since I had British family to visit. The QF staff were awesome, not so being dragged to Sydney after 20 + hours from LHR, and having to wait for three+ hours while the aircraft was cleaned and refurbished before boarding for the flight to Melbourne. What QF was effectively doing was ensuring Brisbane, Melbourne and Adelaide were four hours further from New York and London than Sydney.

I am also not a fan of the previous managements failed attempt to steal, sorry, take over, the airline as well as its horrible treatment of its staff, particularly its engineers.

And you know what? Left to its own devices Qantas will do it again and strangle economic development outside NSW. THAT is why Brisbane Melbourne and Sydney state governments are prepared to fight to get Virgin, not the airline jobs..

‘’To put it another way, Qantas is not acting in the nations best interests, therefore it should not be accorded the status of a national airline and the associated political clout.

‘’Do I make myself clear?

Yes you have. And its even more disturbing.
Tell you what , take your corner shop economics and park them for the duration.
Your imaginary world is not coming back.
One of the only upsides to this catastrophe is that governments worldwide will be re-evaluating the whole concept of mindless privatisation and globalisation and will HAVE TO work out how to restore the industry to a sustainable long term future.
The last 30 years will come to be seen as an aberration.
No more cheap flights to Croatia for you.
Sorry.

[Ken Borough]

having to wait for three+ hours while the aircraft was cleaned and refurbished before boarding for the flight to Melbourne

Facts, Sunfish, facts! Back in the day when the QF2 operated via Sydney to Melbourne, the planned transit time was 100 minutes: STA was 0620LT while STD to MEL was 0800LT. Basic errors do little for whatever credibility you have. :ugh:

[Ducksnuts]

The journalist from the West, Australia's aviation expert, is under challenge from the village lunatic hijacking this thread. If you have an agenda to push, have a bit of respect for Virgin staff, and start another thread about Melbourne vs Sydney. Don't use their unfortunate situation to gain traction for your agenda.

Hopefully there is a new owner who keeps Virgin moving the way it was. I have been through the AN debacle, and seriously feel for all you employees and the uncertainty that comes with it. Along with everybody else in the industry who is stood down.

[morno]

And actually if my childhood memory is correct, I remember flying Singapore to Sydney VIA Melbourne. We got off in Melbourne while they cleaned it, then got back on the same 747 and flew to Sydney, and cleared customs in Sydney.

So you’re full of **** old man

[ozbiggles]

I’m sorry, when did this become a thread on Hubs?
I know like all threads it became a slanging match on page 1, that hasn’t changed.

[Transition Layer]

And actually if my childhood memory is correct, I remember flying Singapore to Sydney VIA Melbourne. We got off in Melbourne while they cleaned it, then got back on the same 747 and flew to Sydney, and cleared customs in Sydney.

So you’re full of **** old man

Quite correct. Remember doing SIN-MEL-SYD as a brand new SO. Horrible for fatigue too, with a red eye sector from SIN landing in MEL about 0430 then departing to SYD at 0600ish. :zzz:

[lucille]

I read through this thread with shame. I've spent my 35+ years of my working career overseas as a proud Aussie. Something in our national character has changed for the worse during my absence,

The low level comments and vitriol on this thread have dismayed me. I've always wondered why the rest of the world has treated us with contempt, now I finally understand why.

I wonder whether its the safety of anonymity which encourages this behavior, either way its unedifying to see professional pilots squabble like this. And it isn't helping the cause of Aussie pilots who will be seeking work overseas if their future managers/employers read these threads.

[DUXNUTZ]

I read through this thread with shame. I've spent my 35+ years of my working career overseas as a proud Aussie. Something in our national character has changed for the worse during my absence,

The low level comments and vitriol on this thread have dismayed me. I've always wondered why the rest of the world has treated us with contempt, now I finally understand why.

I wonder whether its the safety of anonymity which encourages this behavior, either way its unedifying to see professional pilots squabble like this. And it isn't helping the cause of Aussie pilots who will be seeking work overseas if their future managers/employers read these threads.

LOL, Aussie pilots have a reputation as Austro-nauts and back stabbers. Are you just realizing this?

[Square Bear]

.[/QUOTE]The low level comments and vitriol on this thread have dismayed me. I've always wondered why the rest of the world has treated us with contempt, now I finally understand why.[QUOTE]

Thank you for taking the time, and effort to enlighten us with your worldly views, I shall remember that sage advice when I consider posting comments on the region where I work....perhaps your low level comments could do the same?

[chance]

As the starter of this thread I am dismayed at how, like many post on PPRuNe it goes off thread. Folks from 1989 and 2001 are still upset for good reasons and contemporary contributors faced with the challenges of the last decade in the Australian industry are also peeved.
This thread is about Virgin in 2020 and its fate and while history cannot be ignored the economic times are different to years ago.. Tomorrow Deloitte will deliver its first statement to creditors on VAH.
Let us wait until then to see what it says and please keep on the thread and not be diverted by the circumstances for many of unpleasant past experiences in Australia's last 30 years of aviation history.
Keep calm and rational folks just like we expect on the flight deck.

[Sunfish]

And the first services that will start post pandemic will be XXX - SYD.

This is some of what is at stake and why QF is not a national carrier. It is a Sydney carrier. It is critical to Australia’s recovery from the pandemic that QF not be allowed to funnel International pax via Sydney.

There is any amount of literature on the impact of direct international flights on local economic growth. This is a real issue. Arguably, pre covid, Melbourne and Brisbane had finally got enough direct flights from foreign carriers to avoid the Sydney squeeze. However post covid, the Government needs to ensure that this bias towards Sydney by QF is not resurgent.

’Not long ago, it was thought that planes would flatten the world, spreading us out even more than the rise of railroads and cars did in previous eras. But the reality has been much the reverse. Airplanes, airports, and air travel have contributed to our geographic spikiness, fueling the growing concentration of population and economic activity in a small number of large, productive, and well-connected superstar cities.

That’s one of the key findings of a recent study (https://www.princeton.edu/rppe/speaker-series/Long-Range-Growth-Economic-Developments-in-the-Global-Newtork-of-Air-Links.pdf) on the effects of global airports and air connectivity on economic and urban development. The study, by economists at Harvard University’s Kennedy School of Government and the University of Zurich, examines air travel’s role in the economic performance of more than 819 cities and metro areas in 200 different countries. Using detailed data from the International Civil Aviation Organization, it looks specifically at how direct flights facilitate business links and investments between pairs of cities, with data on over half a million businesses and more than 30,000 major business events around the world.

https://www.citylab.com/equity/2017/10/how-direct-flights-shape-a-citys-fortunes/544478/


https://www.skyharbor.com/docs/default-source/default-document-library/economic-impact-of-nonstop-international-flights.pdf?sfvrsn=6a7a9a88_4
’

Air connectivity is an effective engine for increasing both competitiveness and economic growth. That is particularly crucial in Europe, which relies on aviation to provide the international transport links that make Europe a global hub of social and economic connectivity, and to compete on the world stage.

https://www.sciencedirect.com/science/article/pii/S2046043018300030


http://www.dlgrma.qld.gov.au/resources/brochure/invest-queensland-aviation.pdf

[Lookleft]

Keep calm and rational folks just like we expect on the flight deck.

Then right on cue comes this which is none of the above:

and the first services that will start post pandemic will be XXX - SYD.

This is some of what is at stake and why QF is not a national carrier. It is a Sydney carrier. It is critical to Australia’s recovery from the pandemic that QF not be allowed to funnel International pax via Sydney.

[Sunfish]

The flight deck doesn’t get to make investment decisions thank goodness. The question of a loan to Virgin is, fortunately or unfortunately an economic argument. Furthermore there are competing schools of economic thought.

[cloudsurfng]

So you think QF should just start flying from everywhere, regardless of demand or feasibility, just to keep you happy, even though you will never fly with QF?

[junior.VH-LFA]

Then right on cue comes this which is none of the above:

To be fair though; he's never worked on a flight deck in his life.

[Blueskymine]

Qantas will do exactly that for good reason. It won’t be able to fill a widebody initially out of Melbourne or Brisbane to wherever. It will be able to hub out of Sydney and possibly make it economical to fly one.

Of course the other hub carriers will do ex
exactly the same via their hubs. Even if they only half fill a widebody out of Melbourne to XXX, with the connecting passengers onto the next service the load may be full and the average load factor increases.

Of course, if Melbourne was closer than Sydney to the states or Asia, they’d hub there. However, as you know. It’s not.

Also let’s not forget Qantas ordered the 747-400ERs specifically to fly nonstop LA-MEL. It was the only carrier at the time to do so.

And the first services that will start post pandemic will be XXX - SYD.

[Potsie Weber]

Wherever Qantas or any other International Airline decides to focus on as a port of entry into Australia will most likely depend on which state government stumps up the most cash in a post COVID world. Which state government will subside the most testing, quarantining etc.

Forget about $200mil odd to get Virgin to relocate to whatever state, the real money will be in which state puts up the most cash to deal with all the COVID restrictions on eventual inbound foreign traffic.

[Ragnor]

Why is international flying even a thought at the moment?! No one will come here from foreign countries until there is a vaccine or COVID-19 is eradicated. No one will spend 14 days cooped up in a hotel (if they do, who pays for this?) which would be half of their holiday just to go back to country of origin to do it again. International air travel is dead for the foreseeable future, trans-con is the best we can hope for.

[VH-ABC]

Why is international flying even a thought at the moment?! No one will come here from foreign countries until there is a vaccine or COVID-19 is eradicated. No one will spend 14 days cooped up in a hotel (if they do, who pays for this?) which would be half of their holiday just to go back to country of origin to do it again. International air travel is dead for the foreseeable future, trans-con is the best we can hope for.


Trans Tasman is the best we can hope for?

[TCAS v2]

Trans Tasman is the best we can hope for?

Probably for the next few months at least and possibly the end of the year.

[Ragnor]

In terms of international flying I meant.

[kiwi grey]

Trans Tasman is the best we can hope for?
Yes, until there's a vaccine: so until March - June 2021
Maybe some of the Pacific Islands might come in - Cooks Is, Tonga, Western Samoa, possibly Fiji
:-(

[Mendi Matt]

There is another way to look at it. Air NZ was offered a rather large loan recently, to help with their immediate cashflow needs and 'keep the show on the road'. What may not be advertised is the interest rate - well over 8% I was told by an Air NZ mate.....!!! So if the Australian Govt. was fairly confident that VA will survive post Covid-19, this would be an opportunity for them to make money (borrow for 3-4%, or less....lend out at 8%+) and give an important lifeline too.

[normanton]

There is another way to look at it. Air NZ was offered a rather large loan recently, to help with their immediate cashflow needs and 'keep the show on the road'. What may not be advertised is the interest rate - well over 8% I was told by an Air NZ mate.....!!! So if the Australian Govt. was fairly confident that VA will survive post Covid-19, this would be an opportunity for them to make money (borrow for 3-4%, or less....lend out at 8%+) and give an important lifeline too.
Which loan do they pay back first? The Australian government loan, or the $7b they owe to creditors already?

Any money to bailout Virgin is equivalent to pissing into the wind.

[Section28- BE]

Stuff-It, shall have a crack here...................

Anybody, got a post COVID-19 market quote on 'what' a slightly used B738 maybe 'worth', at book value/at this time................., $100m/per head x 70 odd of 'em........... that, 'do-able' ....????

Ta/Rgds
S28- BE

[Progress Wanchai]

There is another way to look at it. Air NZ was offered a rather large loan recently, to help with their immediate cashflow needs and 'keep the show on the road'. What may not be advertised is the interest rate - well over 8% I was told by an Air NZ mate.....!!! So if the Australian Govt. was fairly confident that VA will survive post Covid-19, this would be an opportunity for them to make money (borrow for 3-4%, or less....lend out at 8%+) and give an important lifeline too.

In the current climate that’s actually very reasonable.

VAH’s last bond raising in 2019 was at about 8.5%. In the early days of COVID-19 it was trading at a yield of around 20%. I’d imagine a bond raising for any airline on the open market now would be well north of that.

If ANZ secured a loan at around 8% from the government then the airline got a steal and the taxpayer got a very questionable investment.
That being said, Air New Zealand is a net importer of foreign tourist dollars and subsidizing their operation is to the taxpayers’ advantage. It’s questionable whether either VA or QF fly as many tourist dollars into Australia as they fly out.

[rattman]

Stuff-It, shall have a crack here...................

Anybody, got a post COVID-19 market quote on 'what' a slightly used B738 maybe 'worth', at book value/at this time................., $100m/per head x 70 odd of 'em........... that, 'do-able' ....????

Ta/Rgds
S28- BE
Suspect a lot less than that. Eitihad sold 38 planes for 1billion 22 A330 and 16 777's which they immediately leased back. the a330's weren't worth much but the 777's still have life.

Also the a 737 purchased from southwest for conversion to fire bombers were 20-25 million each

[Colonel_Klink]

Second hand 737s would be almost worthless at the moment. Given the clear surplus of aircraft around the world even after COVID19, and the 100s of Max aircraft sitting on the ground - who is going to be buying up these old 73s?

It is the one thing in VAs favour when dealing with the leasing companies - if those companies want to see any cash, they are going to have to come to the table with a good deal. It may be the saving grace for the A330 too - the moronic leases on those aircraft may come back to be something far more reasonable.

[Ragnor]

Second hand 737s would be almost worthless at the moment. Given the clear surplus of aircraft around the world even after COVID19, and the 100s of Max aircraft sitting on the ground - who is going to be buying up these old 73s?

It is the one thing in VAs favour when dealing with the leasing companies - if those companies want to see any cash, they are going to have to come to the table with a good deal. It may be the saving grace for the A330 too - the moronic leases on those aircraft may come back to be something far more reasonable.

Everyone seems to say the leasing companies will bow down to what ever VA want to pay in cost and if they don't well come take your AC back, if it were that simple wouldn't more companies go into administration more often to clear their debt to a manageable level?.

If by a miracle Virgin actually survive would any further growth be inhibited by leasing companies telling them to jump as they owe them millions for the last failed venture then possibly have to stump up cash for AC which they wouldn't be able to?

Leasing companies won't just give them deals to not have them sitting in their backyard. I'm sure they would rather them sitting in their backyard then companies using them and always late or never paying up.

[Section28- BE]

ABC News overview article 30/04/20: https://www.abc.net.au/news/2020-04-30/virgin-australia-owes-7-billion-creditors-meeting-administration/12198130

Extract here:

"On April 23, Deloitte listed the carrier's debts as including:

Twenty-six secured lenders who are owed about $2.3 billion
Unsecured bondholders owed about $2 billion
Fifty aircraft lessors owed about $1.9 billion
More than 9,000 employees owed $451 million
More than 1,000 trade creditors owed about $167 million
Eighty-one landlords owed about $71 million

Virgin has about 144 aircraft and about half of them are under lease. These are mostly 737-800s, but also includes their A330s and ATR72s.

Deloitte has asked lessors for waivers over lease payments while it works through the voluntary administration process."

It would 'seem' (with what is reported via news outlets) that, the whole show (circa $7B) would need to be swung-off what value can be leveraged out of 70 odd B738's and the 'residual' value of the 'Business/Network'........???

As far as, the options that shall be presented at the 2nd Creditors Mtg of the 'process'- e.g. Liquidation vrs x/cents in the dollar..........

Rgds
S28- BE

[Ichiban]

Lots of talk here about the aircraft lease costs being reduced, because leasing companies have nowhere else for the aircraft to go.

What about pilot terms and conditions? Where else can pilots go at this time?

[Colonel_Klink]

Lots of talk here about the aircraft lease costs being reduced, because leasing companies have nowhere else for the aircraft to go.

What about pilot terms and conditions? Where else can pilots go at this time?

I don’t know too many pilots that aren’t considering that - and the harsh reality is that pilots will need to take a pay cut, especially if there is hope to avoid/reduce any further pilot redundancies.

I know I would certainly take a pay hit to secure my own, and my fellow colleagues, futures.

[KRUSTY 34]

I don’t know too many pilots that aren’t considering that - and the harsh reality is that pilots will need to take a pay cut, especially if there is hope to avoid/reduce any further pilot redundancies.

I know I would certainly take a pay hit to secure my own, and my fellow colleagues, futures.

Very noble Colonel Klink, and probably what will be required, and more.

Unfortunately if there is a VA Mk2 at all, there will be a significant number of pilots who will be “Surplus to requirements”, as a smiling HR type told me just prior to my retrenchment some years ago! It’s even probable that the entire current pilot group will have to compete for what positions there are. If that happens it will literally be every one for themselves.

It won’t be pretty.

[-41]

At least Rex and so on won’t be inconvenienced with another pilot shortage that requires 457 imports.

[piston broke again]

Pilot EBA's at least, according to Deloitte, will be honoured. I guess thats only in the interim whilst they're at the helm; Once they vacate it will be up to the new owners. In all reality, pilot wages may come down. I'm tipping the 330's will go, 777's may stay for the interim and they will be given back to boeing for a 787 fleet at some stage in the future. Massive discounts to be had for a buyer in the market. There'd be no better time (in recent history) than now to purchase an aircraft or 10.

[ozbiggles]

Ragnor I think your thoughts on leasing maybe so last month.
in a normal world one company might go into admin....not all of them at once.
There is no market for 2nd hand aircraft or even first hand aircraft. I don’t know how it will play out....other than bad for everyone.

[krismiler]

What about pilot terms and conditions? Where else can pilots go at this time?

Contracts will be drawn up by the new owners and posted out, if you want to work for the new entity you sign the contract and post it back, simple as that. It will be a few years before the unions will be in a position to engage in enterprise bargaining. Any pilot going back to work within the next two months on 80% or more of their previous package will be envied. It's going to be a long climb back for most of us, QF and a select few may be able to maintain their current T&Cs but the rest of are going to lose out at least in the short term.

[Ragnor]

How will that pan out for JQ crew, still an expired EBA. I wonder how that first meeting will go when it happens in the distant future.

[normanton]

How will that pan out for JQ crew, still an expired EBA. I wonder how that first meeting will go when it happens in the distant future.
Well I'm sure AFAP will be agreeing with the 3% group policy now.

[ECAMACTIONSCOMPLETE]

Well, the ‘why are JQ pilots getting paid less than Tiger’ argument has gone out the window.

[Colonel_Klink]

Contracts will be drawn up by the new owners and posted out, if you want to work for the new entity you sign the contract and post it back, simple as that. It will be a few years before the unions will be in a position to engage in enterprise bargaining. Any pilot going back to work within the next two months on 80% or more of their previous package will be envied. It's going to be a long climb back for most of us, QF and a select few may be able to maintain their current T&Cs but the rest of are going to lose out at least in the short term.

If the employment entity remains the same - the EA remains in force. I’m pretty sure what you have suggested is contrary to the Fair Work Act.

However, I am not sure if renegotiating an EA can form part of the DOCA? Can anyone shed any light?

I would be expecting my union to do all it can to keep as many pilots employed as possible - and if that means a reduction in Ts and Cs, then so be it.

[Colonel_Klink]

Well I'm sure AFAP will be agreeing with the 3% group policy now.

You’d have to think that policy is down the drain now!

[normanton]

You’d have to think that policy is down the drain now!
You would think so, yet Qantas let it go ahead in the LH EBA!

[Lookleft]

How will that pan out for JQ crew, still an expired EBA. I wonder how that first meeting will go when it happens in the distant future.

JQ: "3%"

Unions: "Ok where do we sign?"

JQ: " And by the way because of Covid-19 there will be no backpay, for the good of the Company."

Unions: "Ok"

[KRUSTY 34]

JQ: "3%"

Unions: "Ok where do we sign?"

JQ: " And by the way because of Covid-19 there will be no backpay, for the good of the Company."

Unions: "Ok"

The first realistic question should be, will everyone keep their job?

The second, In what order of seniority will they return?

[Ragnor]

The first realistic question should be, will everyone keep their job?

The second, In what order of seniority will they return?

Nothing to suggest anyone will loose their jobs at JQ or QF.

JQ like QF and VA will do what ever is cheapest to fire back up. I know JQ won't pax over a Perth Captain overnight them in Sydney to fly for a week then pax them back just because they're more senior. ML crew will do ML lines ADL crew will do ADL lines etc etc. There is nothing in the EBA to suggest that flying is rostered by seniority.

[krismiler]

Everything is up in the air regarding the new entity and a package needs to be put together to convince a majority of the creditors that this would be a better option than liquidation and getting cents on the dollar.

Asking creditors to write off a higher proportion of money owed to them in order for employees to maintain their current terms and conditions isn’t going to go down well, everyone needs to come to the party for a deal to work. An agreement lasting 2-3 years for T&Cs would need to be part of the package for the new owners to base their plans on.

The administrators should be able to put forward a proposal for a restructured airline but it will have very little room for negotiation in it. Obviously it looks better for them if the company can be saved, but they still get paid either way.

[AAGpilot]

I’m not sure but this may not be good news. Bain Capital is a corporate raider, and where Mitt Romney made his money.

https://www.afr.com/street-talk/bain-capital-bankers-up-for-virgin-calls-in-ansett-team-20200510-p54riq

[Denied Justice]

Good luck to the Virgin guys if Jane Hrdlicka gets her mitts on the controls at a revamped airline. Talk to the JQ guys about her time there. Not very flattering comments about her and the immediate past Chief Pilot, who has since returned to QF.

[Des Dimona]

The AFR article:

KordaMentha can forget about playing administrator at Virgin Australia - it has a serious horse on the buy-side.

Street Talk can reveal KordaMentha, whose "two Marks" Mark Korda and Mark Mentha (https://www.afr.com/companies/transport/history-suggests-qantas-won-t-be-left-alone-to-rule-the-skies-20200422-p54mbb) are big names in Australia's restructuring industry and oversaw Ansett Airlines' collapse nearly two decades ago, has been snapped up by global giant Bain Capital.

It is understood Bain has mandated KordaMentha as advisers with a view to have an indicative restructuring proposal to Virgin administrator Deloitte when the auction's first round finishes on Friday.
https://static.ffx.io/images/$zoom_0.124%2C$multiply_0.582%2C$ratio_1%2C$width_378%2C$x_5 8%2C$y_0/t_crop_custom/e_sharpen:25%2Cq_85%2Cf_auto/cdc813fe9314d6028a764755d52626b7127de3d7KordaMentha partner Mark Korda; The men who was asked to try to save Ansett in 2001 are back in the thick of it. AAP

Bain's camp also includes ex-Jetstar CEO (and recently departed a2 Milk Company boss) Jayne Hrdlicka, who ran the budget Australian airline from 2012 to 2018, and previously worked in Bain & Company's consulting arm.

While Bain will tap the expertise of its local advisers, the firm brings plenty of aviation experience from offshore, particularly when it comes to corporate revivals. Bain played key roles in several airline restructurings including Atlas Air, America United, and Northwest.Bain is believed to be working on its own at this stage, even as others partner up and form consortia. (Macquarie Group/Brookfield is one early example) (https://www.afr.com/street-talk/macquarie-brookfield-team-up-for-joint-virgin-australia-bid-20200429-p54o4e).

While Bain's based in Boston, it's expected to highlight its "Team Australia" type credentials in pitches to Virgin, governments and unions. The firm has been an active investor in Australia for a few decades and manages money for local institutions including the Future Fund and industry funds such as CareSuper, REST and EISS Super. Its local team includes private equity and credit/special situations type dealmakers.

KordaMentha's role comes after sources said it had earlier been positioning to run the administration. Virgin's board tapped Deloitte instead last month, (https://www.afr.com/companies/transport/virgin-collapses-appoints-deloitte-as-administrators-20200421-p54lno) and the company's creditors have since made no move to have Deloitte replaced.

[Paragraph377]

The AFR article:

KordaMentha can forget about playing administrator at Virgin Australia - it has a serious horse on the buy-side.

Street Talk can reveal KordaMentha, whose "two Marks" Mark Korda and Mark Mentha (https://www.afr.com/companies/transport/history-suggests-qantas-won-t-be-left-alone-to-rule-the-skies-20200422-p54mbb) are big names in Australia's restructuring industry and oversaw Ansett Airlines' collapse nearly two decades ago, has been snapped up by global giant Bain Capital.

It is understood Bain has mandated KordaMentha as advisers with a view to have an indicative restructuring proposal to Virgin administrator Deloitte when the auction's first round finishes on Friday.
https://static.ffx.io/images/$zoom_0.124%2C$multiply_0.582%2C$ratio_1%2C$width_378%2C$x_5 8%2C$y_0/t_crop_custom/e_sharpen:25%2Cq_85%2Cf_auto/cdc813fe9314d6028a764755d52626b7127de3d7KordaMentha partner Mark Korda; The men who was asked to try to save Ansett in 2001 are back in the thick of it. AAP

Bain's camp also includes ex-Jetstar CEO (and recently departed a2 Milk Company boss) Jayne Hrdlicka, who ran the budget Australian airline from 2012 to 2018, and previously worked in Bain & Company's consulting arm.

While Bain will tap the expertise of its local advisers, the firm brings plenty of aviation experience from offshore, particularly when it comes to corporate revivals. Bain played key roles in several airline restructurings including Atlas Air, America United, and Northwest.Bain is believed to be working on its own at this stage, even as others partner up and form consortia. (Macquarie Group/Brookfield is one early example) (https://www.afr.com/street-talk/macquarie-brookfield-team-up-for-joint-virgin-australia-bid-20200429-p54o4e).

While Bain's based in Boston, it's expected to highlight its "Team Australia" type credentials in pitches to Virgin, governments and unions. The firm has been an active investor in Australia for a few decades and manages money for local institutions including the Future Fund and industry funds such as CareSuper, REST and EISS Super. Its local team includes private equity and credit/special situations type dealmakers.

KordaMentha's role comes after sources said it had earlier been positioning to run the administration. Virgin's board tapped Deloitte instead last month, (https://www.afr.com/companies/transport/virgin-collapses-appoints-deloitte-as-administrators-20200421-p54lno) and the company's creditors have since made no move to have Deloitte replaced.
Well well now that is funny, Bain. And of course the 0900-1500 Mum will be involved as she is a consummate expert on aviation matters as a C-level executive. The village idiots will love her style - diversity, colouring in with crayons, females first in the workplace, all the ridiculous fluffy nonsense that VA was promulgating too. Hell, the ‘specialist’ title will undoubtedly stay too!! Fun times.

[Buster Hyman]

Not sure Bain is a good mix for an Airline...


https://cimg3.ibsrv.net/gimg/pprune.org-vbulletin/245x170/3e1k_c85ec52b32c8ed7b7bac86f33ae2908135da7492.gif

[2020Balance]

Well well now that is funny, Bain. And of course the 0900-1500 (tel:0900-1500) Mum will be involved as she is a consummate expert on aviation matters as a C-level executive. The village idiots will love her style - diversity, colouring in with crayons, females first in the workplace, all the ridiculous fluffy nonsense that VA was promulgating too. Hell, the ‘specialist’ title will undoubtedly stay too!! Fun times.

If Bain get the bid what happens to Paul, Stewie, the ELT, and the board???

[PoppaJo]

If Bain get the bid what happens to Paul, Stewie, the ELT, and the board???
Carla Hrdlicka
Chairman and Chief Executive Officer, Virgin Australia Group
9-3 Monday to Friday

[Con Catenator]

Chairman and Chief Executive Officer, Virgin Australia Group
9-3 Monday to Friday.........

Other times by appointment only

[Paragraph377]

Other times by appointment only
And bring your own milk!

[MickG0105]

And bring your own milk!
A2, Brute?

[The Bullwinkle]

Well well now that is funny, Bain. And of course the 0900-1500 Mum will be involved as she is a consummate expert on aviation matters as a C-level executive. The village idiots will love her style - diversity, colouring in with crayons, females first in the workplace, all the ridiculous fluffy nonsense that VA was promulgating too. Hell, the ‘specialist’ title will undoubtedly stay too!! Fun times.
How the hell do these incompetent halfwits keep turning up time after time?

[Kiwiconehead]

A2, Brute?

That's brilliant!!!

[Pundit]

Para, have you put in a bid, everyone else in Australia is incompetent in your inflated opinion. Have a go. Not sure you could do it a grenade chucker, you would have to be seen.

[Paragraph377]

Para, have you put in a bid, everyone else in Australia is incompetent in your inflated opinion. Have a go. Not sure you could do it a grenade chucker, you would have to be seen.
Really, I said that in my opinion - ‘everyone else in Australia is incompetent’? Please show me where I said that. And if you can’t, please please please go and crawl back under that executive managers desk and continue with what you do best. Every executive needs their lap poodle, and you do it so well. Kia Ora

[Pundit]

I could start with #1175 .....

[SHVC]

QLD Government are making a bid for Virgin “Project Maroon”. I guess Palaszczuk fell for the sales pitch.

[Lookleft]

Project Moron would be a better description.

[sunnySA]

perhaps "Rhinella 123", or "Toader 123" or even "Annastacia 123"

[rcoight]

Project Moron would be a better description.

Lol.

As if QLD isn't already in enough debt...

[ozbiggles]

It is OK, it is other people’s money! It is worth it to see Lookleft and Ragnor reaction!!!

On the plus side it should speed up the opening of state borders....if it goes ahead

[Square Bear]

Qld Govt buying Virgin...well that brightened my day😁😁😁😁.

Only laugh I’ve had since “furlough”.

[Fris B. Fairing]

The Courier-Mail's Department of Clever Headlines couldn't help itself.


https://cimg9.ibsrv.net/gimg/pprune.org-vbulletin/850x395/c_m_14may20_ecf08f9a491f3f3d034fa50c0f78e5c5969186c2.jpg

[Dale Hardale]

DICK BIDS FOR VIRGIN

This headline says it all very succinctly.

[ECAMACTIONSCOMPLETE]

https://www.smh.com.au/business/companies/virgin-australia-plan-for-dreamliner-fleet-fuels-bidder-disquiet-20200513-p54snq.html

Sounds like the administrators are quite delusional about the post COVID19 aviation market


Virgin Australia’s administrators have proposed the airline buy a fleet of new long-range Boeing Dreamliner 787 aircraft, but prospective buyers are concerned its plan for the collapsed airline ignores how fundamentally COVID-19 has changed the aviation industry.

Nineteen parties are weighing up rescue bids for Virgin following its collapse last month (https://www.smh.com.au/link/follow-20170101-p54mhp), with preliminary bids due by 6pm Friday, and they have been presented with a confidential management business plan for the relaunched carrier called "Virgin v2.0" (https://www.smh.com.au/business/companies/andrew-forrest-joins-20-bidders-circling-virgin-australia-20200430-p54omy.html).
https://static.ffx.io/images/$zoom_0.216%2C$multiply_0.3541%2C$ratio_1.776846%2C$width_10 59%2C$x_0%2C$y_95/t_crop_custom/q_86%2Cf_auto/5d8c6b8b7d6b132a5b2b5ae2ce6a09b7d5627bb6Deloitte and Virgin management's plan for the airline includes a new international fleet. CREDIT:EDWINA PICKLES

Several sources close to the process, who spoke on the condition of anonymity due to strict confidentiality agreements, said the plan includes buying eight Boeing 787 Dreamliners to replace Virgin's existing international fleet of five Boeing 777s and six Airbus A330s.

Boeing 787s have a "list price" of between $US250 million and $US338 million ($388 million to $525 million) depending on the model, although airlines normally negotiate significant discounts.
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Simplifying Virgin's fleet to reduce costs was a core part of chief executive Paul Scurrah's turnaround plan for the airline prior to it entering administration.

The Age and The Sydney Morning Herald previously revealed the business plan (https://www.smh.com.au/business/companies/virgin-to-keep-international-flights-under-plan-put-to-potential-buyers-20200512-p54s85.html), detailed in a memorandum distributed to key bidders, involves maintaining an international network, which was under a cloud because it was a source of heavy financial losses.'Fundamentally changed'Those details come amid growing frustration from potential bidders that Virgin’s administrator, Deloitte, is asking them to buy a business largely as it was before it collapsed and before the COVID-19 pandemic brought the global aviation industry to a standstill (https://www.theage.com.au/interactive/2020/coronavirus/silent-skies/).

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Airlines around the world have been devastated by the pandemic and major industry players expect it to take two to five years for passenger demand to recover. Deloitte hopes to secure a new owner for Virgin by mid-August.

More than half a dozen people close to potential bidders or working in senior aviation industry roles expressed concern and disbelief Deloitte was not using its administration powers to more aggressively restructure the airline by reducing its aircraft fleet and considering employee redundancies in recognition that a relaunched Virgin will operate in a significantly smaller aviation market.
“There’s no recognition that the market has fundamentally changed," said one source, adding administrators were setting up the winning bidder as the "bad guy" who would have to cut its fleet and workforce after they take ownership.

“They are setting themselves up for the most catastrophic failure - some of the consortiums are close to saying ‘ok, fine we’ll see you in the liquidation'."

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“This is the time to fix it,” another source close to one bidder said of the loss-making company. A third said the administration appeared to be controlled by Virgin management, with Deloitte adopting its long-term plan for the airline.RELATED ARTICLE https://static.ffx.io/images/$zoom_0.2062%2C$multiply_0.2842%2C$ratio_1.777778%2C$width_1 059%2C$x_0%2C$y_37/t_crop_custom/q_86%2Cf_auto/2dfe1455800b2e09422055cd2611c49461eb0d9b (https://www.smh.com.au/business/companies/andrew-forrest-joins-20-bidders-circling-virgin-australia-20200430-p54omy.html)AVIATION (https://www.smh.com.au/topic/aviation-5ut)Andrew Forrest joins 20 bidders circling Virgin Australia (https://www.smh.com.au/business/companies/andrew-forrest-joins-20-bidders-circling-virgin-australia-20200430-p54omy.html)Add to shortlistIntelligence firm CAPA - Centre for Aviation this week projected that Austrlaia's domestic airline capacity will be at only 49 per cent of last year's levels by October and at 60 per cent by December. International flights will be at just 15 per cent of 2019 capacity by the end of the year.

Deloitte has told potential buyers Virgin could triple its earnings to $1.2 billion in the 2022 financial year, which would be a drastic change in fortunes after being unprofitable for the past seven years and racking up combined losses of $1.9 billion.

Deloitte's lead administrator, Vaughan Strawbridge, has said he does not plan to make any workers redundant. Virgin employed around 9300 people prior to administration, most of whom have been stood down from work during the pandemic. Virgin made 1000 workers redundant in March as the pandemic started to bite.

AdvertisementRELATED ARTICLE https://static.ffx.io/images/$zoom_0.3096%2C$multiply_0.2842%2C$ratio_1.777778%2C$width_1 059%2C$x_573%2C$y_0/t_crop_custom/q_86%2Cf_auto/b009a1855708308e9b1c435bdf2ed88a06c29cab (https://www.smh.com.au/business/companies/the-week-that-virgin-australia-hit-the-ground-hard-20200423-p54mhp.html)AVIATION (https://www.smh.com.au/topic/aviation-5ut)The week that Virgin Australia hit the ground hard (https://www.smh.com.au/business/companies/the-week-that-virgin-australia-hit-the-ground-hard-20200423-p54mhp.html)Add to shortlistCOVID-19 has devastated airlines around the world. British Airways is making up to 12,000 staff redundant, while US carriers have signalled significant layoffs. Air New Zealand has said it will lay off about a third of its workforce, or around 3500 employees in the coming months.

Ed Bastian, chief executive of Delta Air Lines, which is the world's largest carrier, said last month that a full industry recovery would take two to three years, while jet maker Airbus has said it could take up to five years before passengers travel is at pre-pandemic levels again.

Groups known to be considering a bid for Virgin include US private equity firm Bain Capital, local private equity group BGH Capital and Canadian asset manager Brookfield. The Queensland government on Wednesday announced its intention to bid (https://www.smh.com.au/business/companies/serious-contender-queensland-government-to-bid-for-virgin-australia-as-race-tightens-20200513-p54slf.html) for the airline, while co-founder Richard Branson is said to be waiting in the wings to join a leading consortium.

[rmm]

It might be pitched towards the QLD Govt.

[LostWanderer]

These administrators just get more laughable by the day, I know airplanes are cheap right now but who cares, could be many years before anyone is able to fill a 787 long haul. Why not also suggest the lucky buyer purchase a fleet of Saturn V rockets as well. Could launch them next to Movie World, QLD to LHR in 18 minutes, NASA may offer them a good deal.

I truly hope I’m wrong but it sounds more likely that this is not going to end well.

[LostWanderer]

Meanwhile IATA thinks international travel to recover in 2023

https://amp.news.com.au/travel/travel-updates/health-safety/overseas-travel-wont-return-until-2023-due-to-coronavirus-experts-warn/news-story/3f45963b038f09ce54fc5fa0b325b073

it’s well accepted domestic to recover much sooner.

the article referring to CAPA predictions for second half 2020 is ridiculous. Pretty sure every interested party is thinking slightly longer term than this year.

2023 would be great, I’ve seen estimates ranging from December this year through 2027 by experts now.

You’re right that any buyer would be looking longer term, I guess it depends how much money they bring to the table with them and how long they can hold out til things get better someday, whenever that may be. I still think these administrators from all accounts are selling a farcically impossible dream and according to a few articles now, buyers appear to be catching on to the game.

[junior.VH-LFA]

Genuine question, can someone please explain to me how any business in administration is able to make demands on potential mew owners/investors about how they should run said business? I know it's not the same by a long shot but it feels like buying a train set and being told when and how you can use it.

[chookcooker]

2023 would be great, I’ve seen estimates ranging from December this year through 2027 by experts now.

You’re right that any buyer would be looking longer term, I guess it depends how much money they bring to the table with them and how long they can hold out til things get better someday, whenever that may be. I still think these administrators from all accounts are selling a farcically impossible dream and according to a few articles now, buyers appear to be catching on to the game.

got any links to experts predicting up to 2027?

[ozbiggles]

I think LFA what is happening is the media are making up inch columns with anonymous sources and half truths. Virgin always had a plan to consolidate their wide body fleet, they have already retrenched a thousand pilots and cabin crew and I think it was 750 from the office. It is all old news you can read in Aus Aviation, but never waste a good crisis, this was probably always the plan pre covid but got sped up by a few years. All the stuff I keep seeing is elements of what should/could/:might/won’t happen and what is coming out now is just a mish mash of what was and what was planned and the new reality. The sources the media keep ‘using’ are the usual half wits trying to make them selves relevant in a world where what was in the morning is not what is in the afternoon. VA in its present form can say whatever they had planned going forward, the new owner will make their decisions.

[MickG0105]

Genuine question, can someone please explain to me how any business in administration is able to make demands on potential mew owners/investors about how they should run said business? I know it's not the same by a long shot but it feels like buying a train set and being told when and how you can use it.
The Administrator can lay out whatever provisions and conditions they like in the information memorandum but at the end of the day it's up to the proponents to submit the bid that they want. Without knowing exactly how Deloitte are running the process I'm just speculating but having seen not dissimilar processes run in the past they may have asked for proponents to submit a 'conforming bid' - that is one embracing let's just call it the Scurrah-Strawbridge Delusion - and then provide the option to submit a non-conforming bid as well. The non-conforming bid will be what the proponent wants to acquire and how much they will pay for/how much of the existing debt they will take-on/roll-over.

For all the hoopla about twenty interested parties and sophisticated bidders, it will all be resolved tomorrow when the non-binding bids are submitted. I'd be surprised if there are more than four bids (maybe five) and none of them will be buying into the Delusion.

[Lookleft]

And the stressed out Virgin employee is left in the dark trying to work out what is going on and do they have a job. It was said at the beginning that it was going to be a roller-coaster ride for them and what is being published would be contributing to that. Unfortunately they might be thinking that the meeting tomorrow will provide some certainty but all it will do is provide a lot more uncertainty and no clearer picture as to when their nightmare ends.

[Fliegenmong]

And the stressed out Virgin employee is left in the dark trying to work out what is going on and do they have a job. It was said at the beginning that it was going to be a roller-coaster ride for them and what is being published would be contributing to that. Unfortunately they might be thinking that the meeting tomorrow will provide some certainty but all it will do is provide a lot more uncertainty and no clearer picture as to when their nightmare ends.

Yeah, pretty much that is so I would say Lookleft. .... and for realistic sake...did u think anything else was going to happen?

[Lookleft]

No I didn’t think it would be any different. Thankfully I don’t work for Virgin but I went through the whole Ansett debacle so I know how it feels. I wish them all the best during what will be a crap time.

[Ragnor]

I was embarrassed for Cam, he clearly does not have a clue what he is getting the QLD people into.

[Paragraph377]

I was embarrassed for Cam, he clearly does not have a clue what he is getting the QLD people into.
He is another dopey Politician who has spent his many years working within the protective Government bubble.. oh $200m, no problem, we can take that from the giant bucket (bucket of cash or bucket of debt, doesn’t matter). Wouldn’t have a clue. Stick him into a non government Corporation as a CFO and let’s see how good he is.I want VA 2 to succeed, but won’t if the Pollies have their hands on it.

[normanton]

Clueless QLD government.

[Traffic_Is_Er_Was]

Why not also suggest the lucky buyer purchase a fleet of Saturn V rockets as well. Could launch them next to Movie World
Are you privy to some insider information? Are GST one of the 20?
Pimpama (https://www.businessnewsaus.com.au/articles/gilmour-space-tech-counts-down-to-momentous-rocket-launch.html)

[neville_nobody]

The issue will be that the Government will do what is best for Queensland or the Labor party not necessarily what's best for the airline. You also lose bargaining power when dealing with interstate operations as the government will want as many jobs as possible in Queensland regardless of cost. So that helps the government at an election but raises the cost base of the airline significantly especially once all the big unions get involved.

[SHVC]

I’m not a business savvy person I truly don’t understand administration and how ppl can think all debt be wiped easily and we move on as it was pre covid I would think every big business would do this otherwise.
My question is does Deloitte really have us employees best interests in mind, or, is it best case scenario for them every time they do this.

[Bodie1]

Personally, I think the administrators are doing a fine job. Once the QE money starts making its way though the financial system there wont be any issue with money. The Americans have proved that printing money is not the problem everyone makes it out to be.

[Section28- BE]

SHVC- I’m not a business savvy person I truly don’t understand administration.......

Shall, NOT buy into the 'Context' as portrayed - however, this link 'may' prove useful to yourself: https://asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors/voluntary-administration-a-guide-for-creditors/

Think: Number and Value vis: Secured/Unsecured 'Creditors' and have a really great day.

Rgds
S28- BE

[Popgun]

When you hear people like Cam, Jayne and Rob as spearheads for the potential front runners within the bidders, something is diabolicaly wrong :

https://www.watoday.com.au/national/queensland-treasurer-defends-virgin-takeover-bid-20200515-p54t8l.html

Who’s Jayne? Oh I see....you mean Carla. 😂🤣🤮

Any of the troops associated with an organisation in which that individual is within whiffing distance of an executive role should expect nothing other than gender politics, self-interest and highly paid yet grossly ineffective chair-warming.

It looks more like a sad search for relevance after the wings were clipped and then the dairy went from fresh to sour!!!

🤮

PG

[SOPS]

Is PG against PT?

"Pop-Tarts have a sugary filling sealed inside two layers of thin, rectangular pastry crust. Most varieties are also frosted. Although sold pre-cooked, they are designed to be warmed inside a toaster or microwave oven ..."

Google Davy Barry Pop Tarts.. you will love it!

[normanton]

Copy paste article please for us poor folk.

[Ragnor]

Guess Deloitte optimism early was a little preempt.‘More cash, please’, says Virgin Australia, as it apparently struggles to keep runningVirgin Australia is understood to have reached out to the federal government on Monday night for emergency funds to keep the airline in operation until the conclusion of the sales process, say sources.

It comes after administrator Deloitte shortlisted four parties (https://www.theaustralian.com.au/business/deloitte-plays-risky-game-keeping-suitors-in-play-for-virgin/news-story/273ee5127a0f0b122bc7a09875db5488)on Monday to take through to the second round of a sales process, where final bids are due around June 12.

The hope is to reach a conclusion for a transaction by the end of next month.

However, some in the market believe that the timetable could be overly ambitious and say that with all the stakeholders that need to be consulted, including unions, governments and other creditors, they believe that a sale of Virgin Australia is unlikely to be concluded any time before at least September.

Virgin Australia collapsed last month owing its creditors $6.8bn (https://www.theaustralian.com.au/business/aviation/virgin-sales-pitch-silent-on-68bn-debt-price/news-story/5ad1f10a4bb4fecc52f7a6657f220d7e)and fears are mounting that it is running out of cash.

Some say that should Virgin Australia be unable to pay its bills to stay in the air, liquidation might be the only option.

However, it is thought that all parties involved would be resistant to see this outcome.

Qantas has earlier made known that it was expecting a cash burn of $40m a week by June.

Earlier this month, The Australian’s John Durie reported that Virgin administrator Vaughan Strawbridge was borrowing around $200m to help keep operations afloat pending a decision on the sale of the airline.

At that time, it was understood free cash stood at just $30m when Mr Strawbridge was called in.

Now, some say that Virgin Australia has about $100m left in cash, which would likely keep the airline in the air for about two months.

This is with lower fuel costs, leasing payments and the JobKeeper scheme, given that services had been heavily cut back.

One interesting point will be how long Foreign Investment Review Board approval could take following a sale or recapitalisation agreement by one of the suitors.

Typically, approval takes at least 42 days.In terms of a sale, some market experts believe that the amount paid by any suitor would be seen from the approach as to what creditors the buyer chooses to pay to keep certain services operating.

In particular, the aircraft leases.

What changes might come?

Certain routes may be abandoned, yet the Virgin Australia camp has earlier indicated that Deloitte would be eager to see as many jobs preserved as possible.

Government subsidies from states such as Queensland could be offered as an incentive to a buyer, provided that it continues to offer certain services.

In the shortlist to buy the business (https://www.theaustralian.com.au/business/dataroom/virgin-bidders-sharpen-pencils/news-story/15372c1c853cfcef2e2b9deff65ad856)are BGH Capital, Cyrus Capital Partners, US-based Indigo Partners and Bain Capital.

The approach to government comes after Virgin Australia made a plea to the federal government to secure a loan worth up to $1.4bn to keep the business in operation amid the COVID-19 travel restrictions.

It was a plea which triggered much debate about a government bailout of a commercial carrier that had earlier posted losses.

However, it was later placed in voluntary administration.

[PoppaJo]

I think the hard line on preserving ‘as many jobs as possible’ and ‘keeping the airline in its current form’ could potentially be more dangerous than say dropping the axe now and moving on, albeit smaller.

We are all for keeping jobs and so on, of course we don’t want people sacked, but if it drags on and on and on, and on, post June, it gets to the point where everyone is out of a job, due to some narrow minded view.

What is most disturbing is the comment that the process is on ‘Virgin Management’s’ agenda’. They need to rid themselves of this Management and start again. It seems Virgin’s Management team will be selecting the winning bidder. Won’t be Bain then, as Carla would wipe them all out.

[Icarus2001]

So there is a race to sell it before there is no cash.

Inconsistent messages, no job losses, full service but right sized and leaner.

[Section28- BE]

Above article Quote/Extract here:
"Virgin Australia is understood to have reached out to the federal government on Monday night for emergency funds to keep the airline in operation until the conclusion of the sales process, say sources."

So (should 'that' be so) in the 'Real' world of Straws/& Camels (it is 'In' a constituted "Voluntary" Administration process, at 'this' time), is 'this' starting to get into the vector of 'freaky'/+ some- yet.....?????

Given- , the 'said' term Solvency and all that goes with that, on more than 1x level/s-

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

Extract here:

"An insolvent company is one that is unable to pay all its debts when they fall due for payment. The law prescribes serious penalties for allowing your company to trade while insolvent. You should consult an appropriately qualified specialist insolvency accountant or lawyer, a financial advice service or a registered liquidator about your company’s financial situation as soon as possible if you suspect that you or your company cannot pay debts when they are due."

Just a question.....
Rgds all
S28- BE

[Denied Justice]

If there is no cash, there is no cash and the government would be foolhardy to put anything into Virgin. The administrators know that this is there only very tiny window of opportunity to get any return on the dollar, and if that fails then it's all over and a new entrant will rise from the ashes. All that those circling the remains of Virgin need to do is wait - the price will be much less once the receivers move in.

[Section28- BE]

We are all in this 'together' ! Secured, Unsecured ..etc!!

https://www.afr.com/companies/transport/government-should-ready-for-second-virgin-bail-out-request-sources-20200519-p54ugi

Mr 'Blackout'- bloody PayWall on 'that' sucker............:{:p

Any 'Cut & Paste' solution/action- at your disposal..?? or a summary thereof.......

Rgds- ("Gas turbine blades of conventional rotorcraft turboshaft engines.....")
S28- BE

[Section28- BE]

Sharp/preemptive/intuitive.................. Cool.

So having read the article-

Can we deploy all these various reserves/cash (encumbered or not)/equity/funding options (spoken of on numerous occasions) to meet the debts as and when they fall due.......????- Yes or No

ta/Rgds
S28

[MickG0105]

What is most disturbing is the comment that the process is on ‘Virgin Management’s’ agenda’. They need to rid themselves of this Management and start again. It seems Virgin’s Management team will be selecting the winning bidder. Won’t be Bain then, as Carla would wipe them all out.
It's a decidedly odd administration, that's for sure. A bit like having Captain Schettino managing the Costa Concordia's salvage operation.

It seems that high on the list of assessment criteria for the sale is 'Buys into Virgin v2.0 (Full service domestic + international +LCC Qantas Mini-Me) business model (aka the Scurrah-Strawbridge Delusion). And you get the sense that 'Retains current management team' is also towards the top of the criteria along with 'Minimises job losses'. Pesky stuff like the financials hasn't been getting much in the way of airplay.

In terms of the financials you can run the numbers on the back of napkin to get a feel for what this deal has to looks like.

Any prospective new owner buying into 'the Delusion' is going to have to be able to take on about $3 billion in debt and liabilities. That will be comprised of $1.5 billion of the currently $2.3 billion in secured debt plus around $1 billion in leases (roughly half of the current $1.9 billion). The other half billion is the employee entitlements that will simply be rolled over as a liability.

Then there's what needs to be stumped up in cash. If you're going to continue trading with the current landlords and supplier base, you are not going to be able to stiff them on what was owing when the business went into administration. That's $235 million. The unsecured bond holders aren't going to take much less than 20 cents on the dollar, so that's another $400 million. So, that's the best part of $650 million just to open the doors again.

You then have the vexed matter of recapitalising the business. That will be about $1 billion in cash or cash equivalents plus sufficient float to cover a very likely first year loss. If the new owner decides to honour the travel credits issued the loss could easily run to $500 million; if they don't they might squeeze by with a loss in the double-digit millions, it just depends on how much they bleed market share by not honouring the credit vouchers.

So the deal looks like $5 billion in cash and debt and that's before you even think about buying out the current equity. One dollar sounds like the right price but I suspect it could go up to around the $100 million mark.

Call the deal $5 billion and change.

It is probably instructive that the crowd with half a trillion under management, Brookfield, walked away on Monday. They were being advised by Virgin's former Chief Financial Officer. I wonder if they know something the rest of us don't.

Any old how, from a financial perspective, Bain could probably manage the $5.x billion. A deal like this would double Cyrus's assets under management so, short of finding a deep-pocketed partner, they'd have to struggle to make the cut I would think. It would also be a stretch for Indigo. BGH would also struggle to come up with $5 billion unless it lent heavily on AustralianSuper (and I'm trying to picture what that investment case would look like - it would have to be heavily weighted towards making a return on a subsequent public float).

Back on the philosophy criteria, BGH is the only proponent likely to buy into 'the Delusion' and look to retain Scurrah and Co. Cyrus and Indigo would not go near that business model. Bain might but I doubt it, and in any event Bain would be handing Schettino and the bridge crew their hats just as quickly as the could replace them.

I think that this thing will quickly come down to whether BGH can fund the transaction. That in turn comes down to whether AustralianSuper will stump up the required coin. And it's likely that Bain, Cyrus and Indigo will pretty quickly join the dots on how important embracing 'the Delusion' is to a successful outcome (probably the day that they meet with management and the unions) and realise that their money is better spent elsewhere.

And now, there's the added complication of whether the administrator has enough cash to run the sale process while remaining solvent. Like all good circuses there's plenty to see ... and no shortage of clowns.

[Con Catenator]

Why would anyone buy the debt now, when it will no longer be a factor if receivers are appointed and firesale the assets to a new starter. Everyone is too focused on a resurrection rather than a genuine re-birth.

[galdian]

It's a decidedly odd administration, that's for sure. A bit like having Captain Schettino managing the Costa Concordia's salvage operation.

It seems that high on the list of assessment criteria for the sale is 'Buys into Virgin v2.0 (Full service domestic + international +LCC Qantas Mini-Me) business model (aka the Scurrah-Strawbridge Delusion). And you get the sense that 'Retains current management team' is also towards the top of the criteria along with 'Minimises job losses'. Pesky stuff like the financials hasn't been getting much in the way of airplay.

In terms of the financials you can run the numbers on the back of napkin to get a feel for what this deal has to looks like.

Any prospective new owner buying into 'the Delusion' is going to have to be able to take on about $3 billion in debt and liabilities. That will be comprised of $1.5 billion of the currently $2.3 billion in secured debt plus around $1 billion in leases (roughly half of the current $1.9 billion). The other half billion is the employee entitlements that will simply be rolled over as a liability.

Then there's what needs to be stumped up in cash. If you're going to continue trading with the current landlords and supplier base, you are not going to be able to stiff them on what was owing when the business went into administration. That's $235 million. The unsecured bond holders aren't going to take much less than 20 cents on the dollar, so that's another $400 million. So, that's the best part of $650 million just to open the doors again.

You then have the vexed matter of recapitalising the business. That will be about $1 billion in cash or cash equivalents plus sufficient float to cover a very likely first year loss. If the new owner decides to honour the travel credits issued the loss could easily run to $500 million; if they don't they might squeeze by with a loss in the double-digit millions, it just depends on how much they bleed market share by not honouring the credit vouchers.

So the deal looks like $5 billion in cash and debt and that's before you even think about buying out the current equity. One dollar sounds like the right price but I suspect it could go up to around the $100 million mark.

Call the deal $5 billion and change.

It is probably instructive that the crowd with half a trillion under management, Brookfield, walked away on Monday. They were being advised by Virgin's former Chief Financial Officer. I wonder if they know something the rest of us don't.

Any old how, from a financial perspective, Bain could probably manage the $5.x billion. A deal like this would double Cyrus's assets under management so, short of finding a deep-pocketed partner, they'd have to struggle to make the cut I would think. It would also be a stretch for Indigo. BGH would also struggle to come up with $5 billion unless it lent heavily on AustralianSuper (and I'm trying to picture what that investment case would look like - it would have to be heavily weighted towards making a return on a subsequent public float).

Back on the philosophy criteria, BGH is the only proponent likely to buy into 'the Delusion' and look to retain Scurrah and Co. Cyrus and Indigo would not go near that business model. Bain might but I doubt it, and in any event Bain would be handing Schettino and the bridge crew their hats just as quickly as the could replace them.

I think that this thing will quickly come down to whether BGH can fund the transaction. That in turn comes down to whether AustralianSuper will stump up the required coin. And it's likely that Bain, Cyrus and Indigo will pretty quickly join the dots on how important embracing 'the Delusion' is to a successful outcome (probably the day that they meet with management and the unions) and realise that their money is better spent elsewhere.

And now, there's the added complication of whether the administrator has enough cash to run the sale process while remaining solvent. Like all good circuses there's plenty to see ... and no shortage of clowns.


As I've said before love your work, think it's as good as any on the forums. :D

Question I'd have - and maybe already asked in a similar way - as the whole show seems to be deteriorating at a great rate of knots how long before the administrator (deloittes) places the whole thing into liquidation to ensure the administrator (deloittes) do not incur costs against themselves...as apparently in administration they're meant to be controlling the finances therefore are responsible for the same??
What - if anything - would be the trigger??

Cheers

[wheels_down]

But does a rebirth require a new AOC? (another 12 months...)

What - if anything - would be the trigger??

Cheers
Canberra saying no I guess. Which they did the previous ten times I don’t see why last night would have been any different.

[MickG0105]

But does a rebirth require a new AOC? (another 12 months...)


Canberra saying no I guess. Which they did the previous ten times I don’t see why last night would have been any different.
Definitely not my area of expertise but if Virgin is liquidated, the AOC goes with it, doesn't it? That's one of, if not the overwhelming attractions of maintaining the business as a going concern; you preserve the AOC.

[zanthrus]

S28- BE makes less sense than Yoda. Follow his posts you can? Hmmmmm? Write clearly or do not there is no try!

[MickG0105]

As I've said before love your work, think it's as good as any on the forums.
Thank you. That's back of the fag packet stuff but I think that the quanta are about right.

One thing I missed above was Temasek's reported tie up with BGH. That might make the funding easier to manage.

Question I'd have - and maybe already asked in a similar way - as the whole show seems to be deteriorating at a great rate of knots how long before the administrator (deloittes) places the whole thing into liquidation to ensure the administrator (deloittes) do not incur costs against themselves...as apparently in administration they're meant to be controlling the finances therefore are responsible for the same??
What - if anything - would be the trigger??

Cheers
Good question. Deloitte have been studiously making applications to the Federal Court to minimise their liabilities. Even so, there must be some concerns amongst their Restructuring Services partners that they are far more exposed on this administration than pretty much anything else they've taken on recently.

I think that Deloitte would have some well articulated risk management guidance and thresholds that would be relevant in a circumstance like this.

Perhaps the thing that would be front of mind for Deloitte is their assessment of just how doable a sale is. They've got to come up with a deed of company arrangement that is amenable to a buyer. At the end of the day the sale will only occur if they can get the debt to a position that a buyer is happy with. That means corralling the creditors. They should already have a sense of the creditors' opening positions on what they'll accept. Having just received non-binding offers they'll have a view as to prospective buyers' appetites for debt. There'll be a gap between the two positions and Deloitte should have a professional view as to whether that gap can be closed such that a deal is possible. They'll have an evolving view as to whether they're in the Go Zone for a deal. If they ever get too far out of that zone they'll have to call time.

The fact that Deloitte are already rattling their cup and we're only just into the short-list phase of the sale process does not augur well. The fact that the bidders know that Deloitte is rattling the cup does not augur well. Same same with Brookfield walking early.

Equally worrying is the way this thing is playing out as a public spectacle. Generally speaking the most successful commercial deals are the ones that you read about for the first time after they've concluded. Clearly Deloitte can't run this whole thing under the radar given that Scurrah ran the lead up to the administration in full view but Deloitte have got to try to get the machinations out of the papers for at least a couple of days at a time.

[Buster Hyman]

I bet they wish that KM had their Administration now...

[Double_Clutch]

Why would they want Korda?

[Forced Labor]

I think that Deloitte would have some well articulated risk management guidance and thresholds that would be relevant in a circumstance like this.

Spot on - Deloittes will have to be very careful with this one - I would not be surprised if they walk away (read call in the receivers) if there is even a sniff of running beyond the limited cash remaining. The government should not touch this with a barge pole, and commercial imperatives must be allowed to run their course.

[Buster Hyman]

Why would they want Korda?
Sorry, I meant that about Deloittes.

[wheels_down]

Today they want $238m. Who knows what the figure will be tomorrow.Virgin Australia administrators eye $238m in restricted cash to help keep the airline flyinghttps://www.google.com/amp/s/amp.theaustralian.com.au/business/aviation/virgin-australia-administrators-eye-238m-in-restricted-cash-to-help-keep-the-airline-flying/news-story/90ed873726e5da25562a4f82ea621f31

[Double_Clutch]

Restricted cash - how can they access it if it is restricted? Surely it’s “restricted” for a reason.
Who deems it restricted? The company, law or the administrators?
All seems a little prickly to me?

[MickG0105]

From today's The Australian
https://www.theaustralian.com.au/business/aviation/scurrah-urges-virgin-reboot-with-737s/news-story/

Scurrah urges Virgin reboot with 737s
By ROBYN IRONSIDE12:00AM MAY 22, 2020

Virgin Australia CEO Paul Scurrah has told prospective buyers of the carrier the best way forward is to rebuild the business as a domestic airline with a strong frequent-flyer program.

The 20-year-old airline went into voluntary administration on April 20 with debts of $6.8bn, sparking a flood of interest from prospective buyers.

Four bidders were short-listed on Monday including Bain, BGH Capital, Indigo Partners and Cyrus Capital.

In a series of three-hour presentations to two of the bidders on Thursday, with two to follow on Friday, Mr Scurrah outlined how the airline could prosper by ditching its hodgepodge fleet of aircraft for a line-up of Boeing 737s. The domestic network could be rebuilt from scratch focusing on high-demand, lucrative routes, while international services and low-cost carrier Tigerair would be “optional extras”.

Costly contracts with Wi-Fi providers and caterers would be up for negotiation, presenting opportunities for significant savings.

As Mr Scurrah outlined the possibilities for Virgin 2, administrator Deloitte hosted the first committee-of-inspection meeting with 35 creditor representatives including unions, airports, banks, bondholders and suppliers. They were told of the increasing urgency for further funding to keep Virgin Australia flying. With government subsidies for flights due to come to an end on June 11, administrators revealed they were exploring various avenues for financial assistance including state governments and commercial lenders.

Although an existing $100m in cash was expected to see the airline through till the end of July, concern centred on Virgin Australia’s ability to ramp up to keep pace with rival Qantas. The meeting heard administrators were eyeing up to $238m in restricted cash, tied up against hedging and in merchant and credit card facilities.

Failing that, Deloitte also suggested to the committee one of the final two bidders could enter into some funding arrangement before settlement — precisely the scenario that scared off Brookfield.

It also emerged on Thursday that a group of restructuring experts calling itself Australia Connected Aviation Partners approached Virgin Australia’s administrator last week with a plan they believed best protected the interests of creditors in the administration process.

ACAP is being bankrolled by American entrepreneur Augie Fabela, the co-founder of the New York Stock Exchange-listed VEON, the seventh largest mobile phone operator in the world boasting $US22bn ($33.5bn) in revenues. Mr Fabela was also the chairman of the Koenigsegg Group, which acquired Swedish vehicle maker Saab more than a decade ago from General Motors.

In the ACAP team are three former EY partners who have started their own turnaround services business known as Spiique, which last year worked with *Deloitte’s Vaughan Strawbridge on the rescue of Axsesstoday, a publicly listed SME lender that went into voluntary administration.

Also in ACAP’s ranks is Dermot Mannion — former CEO at Aer Lingus and deputy chairman of Royal Brunei Airlines — and former AMP bank CEO Sally Bruce.

“The concern of our team is that there will be a financial restructure of Virgin done quickly that will disenfranchise creditors who have seen value destroyed. You could end up with a very valuable business that somebody hasn’t had to pay for,’’ said Spiique co-founder David Hewish, noting ACAP had already held discussions with Virgin creditors.

Under its recapitalision plan for the airline, Virgin’s unsecured creditors would be given the option to convert all or a portion of their debt into equity; roll over their debt on a “standstill basis” or elect to receive a cash payment. New senior notes would be issued together with a potential equity component to investors underwriting the note offering.

“We certainly believe there is room to develop a plan B solution for Virgin. Fixing the business is the missing element in the current process,” Mr Hewish said. “The current tight timeline doesn’t give the business a chance to work with the stakeholders and come up with a plan.”

'Mr Scurrah outlined how the airline could prosper by ditching its hodgepodge fleet of aircraft for a line-up of Boeing 737s.' From Mr Oblivious to Captain Obvious. I wonder if there was a phone booth and a costume change involved? It would have been interesting to watch Paul Scurrah explaining to Bill Franke how an airline should be run.

Separately, the emergence of Australia Connected Aviation Partners can't be good for Deloitte's hit-and-run sale process. If ACAP can get the bondholders on board Deloitte could very easily be well and truly out of cash before a sale can be finalised.

[Chronic Snoozer]

From today's The Australian
https://www.theaustralian.com.au/business/aviation/scurrah-urges-virgin-reboot-with-737s/news-story/


Does he mean the 737 MAX?

Forbes (https://www.forbes.com/sites/cathybuyck/2020/05/21/ryanair-still-wants-its-boeing-737-max-200-gamechanger-aircraft-despite-covid-19-traffic-slump/#67d140667b8e)

[MickG0105]

Does he mean the 737 MAX?

Forbes (https://www.forbes.com/sites/cathybuyck/2020/05/21/ryanair-still-wants-its-boeing-737-max-200-gamechanger-aircraft-despite-covid-19-traffic-slump/#67d140667b8e)
Anyone's guess. If you were starting with a blank sheet of paper and were totally unconcerned about the potential for the reputational hangover impacting market share, the MAX 8 and 10 would logically figure in your plans given the legacy fleet.

[wheels_down]

I don’t think Carla or Bill give two ****s about Scurrah and his slideshows.

They have their own plans and agenda. Most certainly does not involve anyone from Virgin.

Carla will want the Corp model but gut the costs, Billy will probably go down the Alaska route with Tiger surviving. Scurrah or Dani wont be involved.

Is Elizabeth still with us?

[Sunfish]

When you do restructures or sales in business, you either do it “slow and clean” or “quick and dirty” this last method involving loose ends and risking some chaos to get the deal done.

That said, I’m not sure Deloittes have the money to do this slowly and still have Virgin survive. I also wonder if they even care from their own a business perspective, although I hope they do, and I hope their fee agreement reflects it.. How long did Korda Mentha take to wrap up Ansett? Ten years?

For all of your sakes, I hope Deloittes are working 24/7 to get this done NOW. Time is not on your side. You want a heads of agreement and finance organised as quick as possible. Bugger the details. That can all be sorted later. Lock in a buyer RFN.

[Led Zeppelin]

Lock in a buyer RFN

Why lock in now with debt, when the going price in 8 weeks will be much less, with the debt gone as the receivers sell the assets at fire sale prices ??

The bidders currently left are only in there to confirm the true financial position. Pretty sure they would not believe Deloitte’s very optimistic forecasts.

Both Bain and BGH will have a bottom line that is the worst case scenario for the administrators.

[Sunfish]

Led Zeppelin, because “the assets” doesn’t include the staff. It’s them I worry about. Selling the airline as a going concern includes the staff. All the assets are is office furniture, old computers, a few old aircraft, some tools and...........a coffee machine.

[The Bullwinkle]

Led Zeppelin, because “the assets” doesn’t include the staff. It’s them I worry about. Selling the airline as a going concern includes the staff. All the assets are is office furniture, old computers, a few old aircraft, some tools and...........a coffee machine.
Yeah, but apparently the coffee machine in Adelaide is pretty bloody good!

[Led Zeppelin]

Sunfish - sad but true to say that bidders will not give a fig for staff. They are bottom line feeders that are only interested in the dollars around the deal.

[didrechambers77]

The cull of 750 didn't make it anywhere near it. Official oracle report was 349.

[didrechambers77]

Open your eyes, to the real reason why its being rushed. It'll fall into liquidation from 23 June.

[MickG0105]

The cull of 750 didn't make it anywhere near it. Official oracle report was 349.
And that tells you pretty much all you need to know about the abject lack of purpose demonstrated by Scurrah and Co in getting the business's cost base under control. Virgin was losing between a half to a million dollars a day - if that doesn't galvanise a sense of urgency I don't know what does - and they couldn't manage to achieve 50 percent of their 'rightsizing' target in six months of trying.

Despite Scurrah telling Elizabeth Knight of the SMH in November last year that, 'By Christmas, most of the 750 in headcount reductions, designed to shave $75 million from Virgin's cost base, will be complete.' the FY20-H1 interim report stated that only 'approximately 140 employees had left the business before 31 December'.

[didrechambers77]

Or the fact the boys club didn't have the balls to have tough convo's or take it seriously. Many GM's et al were overheard at drinks with "Oh they'll take a couple of sacrificial lamb's but I'll keep the rest", when the reality came and many of them were far off the target. Awkward looks across the room.

[MickG0105]

Failed to meet his KPI and still pocketed a bonus! The world of aviation executives.
Well, I know that it's unusual to find anyone with a kind word for AJ in these forums but what few remember (or know, as there was no fuss made about it) was that back in 2012 when QF tumbled to a loss, because of the way the scorecards were structured AJ was still entitled to a $792,000 STIP bonus. He turned it down. He also declined the $65,000 increase to his base pay he was entitled to that year.

[The Bullwinkle]

Well, I know that it's unusual to find anyone with a kind word for AJ in these forums but what few remember (or know, as there was no fuss made about it) was that back in 2012 when QF tumbled to a loss, because of the way the scorecards were structured AJ was still entitled to a $792,000 STIP bonus. He turned it down. He also declined the $65,000 increase to his base pay he was entitled to that year.
Wow, what a legend! How on earth did he survive with just a few million bucks?
I’m sure he really missed the $65,000 increase to his base pay! :mad:

[cloudsurfng]

Open your eyes, to the real reason why its being rushed. It'll fall into liquidation from 23 June.


that’s some pretty specific information action you claim to have there.

[Led Zeppelin]

I can't see any way that Scurrah will be part of a new operation, whoever picks up the pieces. They will want their own people as unpleasant as that may be, particularly if Bain gets hold of it.

[MickG0105]

I can't see any way that Scurrah will be part of a new operation, whoever picks up the pieces. They will want their own people as unpleasant as that may be, particularly if Bain gets hold of it.
The BGH-AustralianSuper-Temasek crowd are likely the most open to retaining Scurrah and almost most likely to buy into the Virgin Mk.II Qantas Mini-Me business model of full service domestic plus international plus LCC (aka 'The Delusion'). I can't see how they'll get the numbers to work on that model though.

Someone mentioned the debtors earlier. Here it is instructive that the unions, acting as a block, will be able to vote down any proposed Deed of Company Arrangement by virtue of their representation of the employees. Even though the employee debt is a pittance in the grand scheme of things each of the 9,000-odd employees counts as a creditor for voting purposes and votes are carried or lost on value and number. We'll have to see what carries the day - pragmatism or principle.

[timbo1]

Hey Jethro, if it only were so,
The 75 million in savings required, was a spreadsheet exercise, aimed at drawing favor from the financial markets immediately prior to the bonds issue, that funded the Velocity buyback. When announced there were zero plans in place as to how to achieve it, and remarkably the contractors and consultants were the first group exempted, and then there was the call centre, and then anyone who was on an EBA, and then anyone on the front line, all exempted. Easy to see how buy into the program was so low.

It was a shame, I had thought the new boss, was evidence of the grown ups being in charge, but this an now the Delusion just go to show you, that the circus just goes on.

[MickG0105]

To play devils advocate for a moment, I believe it was 750 individual contract positions that were to be reduced to achieve a target of $75 mil. Not necessarily 750 people to be made redundant. If an identified role was vacant, became vacant or was merged with another role, then I would imagine this would be counted toward the target but not counted as a redundancy. Having said that, the process did drag too long and with some disappointing results, namely some of the talent departing the organisation as compared with what was being retained or worse brought back in. Unfortunately, by the time it got to the lower levels of the structure COVID 19 fun began.
You're taking an interesting semantical approach to what was in essence a hard dollar financial problem. From a cost control perspective two things were important - elimination of roles and elimination of costs associated with the role. Offering up a role that was vacant achieves the former without necessarily contributing towards the latter. In order to save money in this context you need to stop spending it. If you're already not spending it (eg the role is vacant) then offering up that up as part of the rightsizing doesn't contribute to a real saving.

In any event, Virgin's own reporting in ASX filings explicitly links 750 employees to the 750 roles being ostensibly eliminated. The FY20-H1 interim report states that of the 750 roles targeted, '140 employees' had left as of 31 December (18.7 percent achievement against target), with roles impacting a further '280 employees' having been identified to leave the business by 30 June 2020 (in aggregate, a 56 percent achievement). The report notes that further plans were under consideration for the remaining 330 roles.

By any ordinarily accepted business practices relating to cost reductions that effort was glacial and almost literally half-hearted in terms of execution against a plan. It is all the more of a capital F Fail in that Scurrah had told the SMH in November that 'most of the 750 in headcount reductions' would be complete by Christmas. Less than 20 percent had been achieved by Christmas.

The whole rightsizing exercise is just further evidence, to the extent that it is needed, of the absence of any sense of either urgency or purpose and the abject lack of accountability at the top of the business.

[Tommy Bahama]

You're taking an interesting semantical approach to what was in essence a hard dollar financial problem. From a cost control perspective two things were important - elimination of roles and elimination of costs associated with the role. Offering up a role that was vacant achieves the former without necessarily contributing towards the latter. In order to save money in this context you need to stop spending it. If you're already not spending it (eg the role is vacant) then offering up that up as part of the rightsizing doesn't contribute to a real saving.

In any event, Virgin's own reporting in ASX filings explicitly links 750 employees to the 750 roles being ostensibly eliminated. The FY20-H1 interim report states that of the 750 roles targeted, '140 employees' had left as of 31 December (18.7 percent achievement against target), with roles impacting a further '280 employees' having been identified to leave the business by 30 June 2020 (in aggregate, a 56 percent achievement). The report notes that further plans were under consideration for the remaining 330 roles.

By any ordinarily accepted business practices relating to cost reductions that effort was glacial and almost literally half-hearted in terms of execution against a plan. It is all the more of a capital F Fail in that Scurrah had told the SMH in November that 'most of the 750 in headcount reductions' would be complete by Christmas. Less than 20 percent had been achieved by Christmas.

The whole rightsizing exercise is just further evidence, to the extent that it is needed, of the absence of any sense of either urgency or purpose and the abject lack of accountability at the top of the business.

And exactly why I'm so suspicious that Voluntary Administration was Virgins AND Deloittes plan all along.

[ozbiggles]

Yes, and they cunningly spent 10 years of losing money to achieve it....

[Des Dimona]

The VAH board had their head in the sand for years, but they will be gone when the company disappears and a new entity is started.

[MickG0105]

Yes, and they cunningly spent 10 years of losing money to achieve it....
I don't think that it was a ten year plan but it is notable that given current circumstances VA has managed to reacquire 100 percent of Velocity for significantly less than half of the earlier sale price.

They raised the $700 million purchase price plus the $11 million in transaction costs plus sufficient to cover KS's bonus payment in an unsecured bonds issue that they never had to make a coupon payment on. They'll end up settling with bondholders for what? 20 cents on the dollar. That means that they will have reacquired that 35 percent stake in Velocity that was sold back in 2014 for $355 million for around $150 million.

​​​​​​Funny how things have worked out, Velocity not being part of the Voluntary Administration and all.

[Sunfish]

Sorry for the pun, but Virgin was stuffed from the start by an antiquated Board structure populated by dickheads. It still is - until it’s sold or wound up.

Specifically, JB and Scurrah are/were “Managing Directors” which is a disaster waiting to happen. There is a huge conflict of interest between the role of “manager” and Director. The Directors job is to safeguard the assets and the interests of the shareholders. The managers role is to use the assets to make money.

The key here is risk. The Director MUST ensure that risk is managed to protect the assets. The manager has to accept risk to make money. The whole business plan/strategy thing is about balancing risk and return. If the Board and the manager cannot come to agreement or the manager screws up, then the manager is fired by the board.

Now if you have an MD, the poor board can’t even have a private conversation about the performance of the manager, let alone sack the MD. The roles are hopelessly conflicted. That’s why JB was there until he felt like leaving. If he was a CEO and not a Board member, the Board could have given him three years or else.


As for the staff cuts, that simply demonstrates weak and inexperienced management. You cut FIRST, then you tell the remaining people to get busy and restructure to cope with the work. To do otherwise gives the drones more time to burrow in, make more work for themselves and prove how essential they are. They are then almost impossible to remove.


To put that another way, why do you think that a football coach is always an employee of the club and not a member of the board of directors?

[galdian]

I don't think that it was a ten year plan but it is notable that given current circumstances VA has managed to reacquire 100 percent of Velocity for significantly less than half of the earlier sale price.

They raised the $700 million purchase price plus the $11 million in transaction costs plus sufficient to cover KS's bonus payment in an unsecured bonds issue that they never had to make a coupon payment on. They'll end up settling with bondholders for what? 20 cents on the dollar. That means that they will have reacquired that 35 percent stake in Velocity that was sold back in 2014 for $355 million for around $150 million.

​​​​​​Funny how things have worked out, Velocity not being part of the Voluntary Administration and all.

OK I'll be the financial bunny:
- who "owns" velocity and why (if bought back by VA) is it not part of the VA adiministration?
- who, if anyone, primarily benefits from velocity being outside the VA administration ( as you assert).

Finally simple yes/no: will there be a VA2?

I personally believe the administrator will keep finding financial blackholes and will end up in receivership/liquidation.... whatever.
More so wonder if the creditors will accept anything like 20cents in the $ and let others walk away with the entity/assets to be stripped, force receivership and get a better result (maybe?) and let the asset strippers eat ****.

From memory in the AN days one of the lead characters, upon departing these shores after failure to acquire/strip, was rather blunt and rude to the QF staff assisting his departure because of their "opportunity lost".

Cheers

[wheels_down]

Would it be public knowledge if another operator lodged early plans for a AOC?

There was reports in March about Indigo considering submitting for a AOC, as well as looking at Virgin.

They could have lodged a 30 odd A320/1 AOC, and could be operational by Octobe/November. Tiger in 2007 lodged in March, went live late November.

[MickG0105]

OK I'll be the financial bunny:
- who "owns" velocity and why (if bought back by VA) is it not part of the VA adiministration?
- who, if anyone, primarily benefits from velocity being outside the VA administration ( as you assert).

Okey doke, so Velocity Frequent Flyer Group Pty Ltd is a business entity in its own right that is wholly owned by Virgin Australia Holdings. It has two directors - Paul Scurrah and Keith Neate. Interestingly up until early March it had a third director, Ken Dean. He is also a VAH director. Dean ceased being a director of Velocity on 29 February and he was not replaced. The Velocity FFG is in turn comprised of seven different business entities.

Why isn't it part of the administration? There are 38 VAH business entities covered by the administration and Velocity FFG isn't one of them. I can only imagine that Velocity FFG is deemed to be sufficiently solvent and liquid that it doesn't require the protection of voluntary administration.

Que bono? I'm not 100 percent sure that anyone does but it just strikes me as odd that the business entity that creditors' money helped buy back isn't currently subject to the administration. The timing of the change to the composition of the Velocity board strikes me as curious though.


Finally simple yes/no: will there be a VA2?

Pass. I just think that there are currently too many variables and unknowns to make a straight up and down yes/no call on that.

Something will most assuredly rise from the ashes but it's hard to say at this stage what you'll be able to call that. A lot of it comes down to what Deloitte can do with the debt. Apparently the bidders teleconferenced with the unions today so they will now have a feel for how difficult any substantial restructuring will be. I'm thinking more and more that the emerging complexities are going to swamp Deloitte's sales process. I suspect that any of the bidders apart from maybe BGH would be just as happy picking through a liquidation rather than this process and it's only FOMO that's keeping the process ticking over.

[galdian]

Mick

Thanks, clear info and stuff to think about, appreciated.

Q: probably pertains to "ownership" but when AN went down everyones FF points disappeared, no longer any value.

If there's no VA2 do all the velocity points disappear??
Suppose simply the Q is difference between AN Frequent Flyers and VA Velocity, why there'd be a difference.

Pass! on the VA2 question. Disappointing but a measured response.

Cheers

[strobes_on]

To me it would make more sense to run this through receivership as this will mean asset pricing lower than any deal brokered by Deloittes under administration.

The other big attraction is that the debt will be quarantined to the current entity in this scenario.

The other point claimed is that the staff may be able to veto any deal made under administration. I don’t know whether that is factually correct. If it is, that may further complicate an already messy situation.

Whatever happens, there will be a new airline at the end of it.

[non_state_actor]

Receivership would mean the loss of the AOC which would render the whole exercise futile.