Government Loan to Virgin Australia

[chance]

Lunch time TV news had a Channel 9 reporter, Chris Uhlmann saying that after the daily press conference with the PM that the Government is unlikely to prop up Virgin Australia with the loan that they were seeking. Shudder to think what will happen to all the staff and their families, suppliers etc if they don't reverse that. Not to mention what Qantas will do with airfare costs if Virgin collapses.

[Alfie.floor]

As disappointing as this may sound for some, this could just be the glimmer hope for many pilots recently made redundant.

[Led Zeppelin]

Something has to come from Scurrah now, if only to stem the rumours that are floating around.

He needs to confirm the company is solvent and can pay its debts as and when they fall due. If so, good and well.

If not, then Administrators need to be called in to preserve the remaining cash.

[RampDog]

Lunch time TV news had a Channel 9 reporter, Chris Uhlmann saying that after the daily press conference with the PM that the Government is unlikely to prop up Virgin Australia with the loan that they were seeking. Shudder to think what will happen to all the staff and their families, suppliers etc if they don't reverse that. Not to mention what Qantas will do with airfare costs if Virgin collapses.
Here's a thought?
Virgin Australia will collapse only if its owners allow (or want) it to, not because the Australian Govenment ( with taxpayers money) won't lend them cash.
The owners are by majority all global players (including RB) and got in understanding the strategic risks they were taking with the existing business model that VA has operated under.
Maybe they can redefine the business for the times... and the future.
Here's a radical suggestion...let Sir Richard have his brand back, saving a few $$$$$ with that, and continue to run Tiger LCC (including a Tiger regional op) as OZ's competition to Qantas.
Unfortunately Darwin's Theory of Evolution also applies to business too.

Accreditation to - https://www.livescience.com/474-controversy-evolution-works.html
Quote "The theory of evolution by natural selection, first formulated in Darwin's book "On the Origin of Species" in 1859, is the process by which organisms change over time as a result of changes in heritable physical or behavioral traits.
Changes that allow an organism to better adapt to its environment will help it survive and have more offspring." Unquote

One more thought, everyone knows how this one panned out.
Back in the day, Ansett Australia, who had more than a competitive share of the Australian aviation market, but not fit enough to survive its failings and circumstances was deemed not worthy of a Government handout because of its foreign ownership.
It died an (un)natural death and the vacuum was quickly filled by a leaner and meaner operation.
So.... Go Tiger!! :ok:

[dontgive2FACs]

Just wanted to send best wishes to everyone at VA in this very difficult time.

I understand the premise of why the government can’t prop-up VAH.

It’s bad enough with COVID-19, without having to navigate your future with an employer who’s becoming seemingly insolvent as a result. Please everyone, reach out to colleagues in and outside of VAH for support. It doesn’t matter what carrier you work for, we all understand the strain. It could quite easily be any of us

If VA are going to wind-up, I hope it happens shortly before the cash is drained. Employees need to get their entitlements.

[Icarus2001]

Employees need to get their entitlements. They will under this scheme...

https://www.ag.gov.au/industrial-relations/fair-entitlements-guarantee/Pages/default.aspx

[The Bullwinkle]

If VA are going to wind-up, I hope it happens shortly before the cash is drained. Employees need to get their entitlements.
Absolutely correct!
If VA is going to go broke, call in the administrators now and give the employees their full entitlements rather than just sit around and wait until the cash is gone and there's nothing for anyone!
If VA isn't going to go broke, then tell us what the situation truly is and give us belief that the company will survive.

[chance]

Absolutely correct!
If VA is going to go broke, call in the administrators now and give the employees their full entitlements rather than just sit around and wait until the cash is gone and there's nothing for anyone!
If VA isn't going to go broke, then tell us what the situation truly is and give us belief that the company will survive.

Why no Government Loan? Its majority foreign owned. Etihad 21%, Singapore Airlines 20%, Nanshan 19%, HNA Holdings (Hainan) 19% , Virgin Group (Branson) 10.4% with less than 10% owned by a raft of minor shareholders from Australia. So Government will have trouble bailing it out because it a foreign owned entity given in contrast to Qantas that is a majority Australian owned company by a slim margin as the Qantas Sale Act prevents foreign ownership by majority share holding.
If they have no hope of a line of credit from somewhere then they will burn the cash and they don't have tons of assets to borrow against as Qantas was able to do by taking a loan with the Qantas owned B787 fleet as security. A horrible situation but better to shut now and call in the Administrators and then pay out the 10,000 employees their entitlements if there is no chance of a buyer.

[George Glass]

Sow the wind , reap the whirlwind.
The government of the day deliberately allowed Ansett to fail so that Virgin Blue could lead the Australian travelling public to the sunlit uplands of low-cost deregulated airlines and the nirvana of $ 50.00 fares between Sydney and Melbourne. And nobody joined the dots. Conditions of employment trashed , zero security and an endless chase to the bottom. The a#se was always going to fall out of it eventually when exposed to a crisis. Now it has.

[RampDog]

Absolutely correct!
If VA is going to go broke, call in the administrators now and give the employees their full entitlements rather than just sit around and wait until the cash is gone and there's nothing for anyone!
If VA isn't going to go broke, then tell us what the situation truly is and give us belief that the company will survive.

Prior to the Ansett collapse, employees had to get in the (far) queue of creditors fighting for the scraps left by failed businesses.
The only good thing to come out of that whole debacle was that we were made first in line. for whatever was left in the kitty.
I absolutley, and from the bottom of my heart, wouldn't want VA employees to have to experience the trauma of that sh!tfight :yuk:
Why has there not been a single word heard from VA's owners, they've made CEO Paul Scurrah the messenger and they are letting him cop all the arrows!
Regardless of how much they pay him, from a due diligence perspective they need to be more open and transparent, this is a life or death situation for Virgin Australia.

Understanding how big business operates in the background, I reckon our pollies know alot more than they are prepared to tell us.
We can't continue to accept that they have no control over businesses failing (or surviving), they are intrinsicly involved at all levels!

[The Bullwinkle]

We can't continue to accept that they have no control over businesses failing (or surviving), they are intrinsicly involved at all levels!
Particularly when it is the Governments actions, rightly or wrongly, that is causing businesses to fail.
If you force an airline to be grounded, then you need to accept some of the responsibility for their demise.

[Gnadenburg]

Having gone through the Ansett demise and a period of unemployment, the government did a good job with helping ensure the payment of owed wages and benefits. The tax liability was small and I ended up with far more cash in hand than expected.

With % rates near zero, hopefully for many Australians affected by current airlines troubles, there's enough personal funds to sustain until better times.

Even as an employee of AN, at the time, I did not feel it right AN was propped up by taxpayers funds. Those funds would soon be far better spent on our War of Terror throughout the Middle East.

[Dookie on Drums]

Particularly when it is the Governments actions, rightly or wrongly, that is causing businesses to fail.
If you force an airline to be grounded, then you need to accept some of the responsibility for their demise.

I hear what you're saying and sympathise but management at VAH should also accept some responsibility for the position they're in. They were forced to be grounded (like MANY airlines around the world) because of a pandemic and the risk it poses not only to the nation but the world. Not for ****s and giggles.

[TBM-Legend]

I hear what you're saying and sympathise but management at VAH should also accept some responsibility for the position they're in. They were forced to be grounded (like MANY airlines around the world) because of a pandemic and the risk it poses not only to the nation but the world. Not for ****s and giggles.


​​​​​​Virgin Australia Holdings annual losses2009: $160million

2011: $67.8million

2013: $98.1million

2014: $353.8million

2015: $93.8million

2016: $224.7million

2017: $185.8million

2018: $653.3million

2019: $315.4million

Source: Virgin Australia Holdings annual reports showing the statutory net loss after tax for the full year

[The Bullwinkle]

management at VAH should also accept some responsibility for the position they're in.
Yes, but unfortunately the one responsible has long since left the building with millions in his pocket and he's now comfortably swanning around the countryside in a McLaren, never to be held to account for his actions! :yuk:

[Anti Skid On]

​​​​​​Virgin Australia Holdings annual losses2009: $160million

2011: $67.8million

2013: $98.1million

2014: $353.8million

2015: $93.8million

2016: $224.7million

2017: $185.8million

2018: $653.3million

2019: $315.4million

Source: Virgin Australia Holdings annual reports showing the statutory net loss after tax for the full year

Do their losses stem from specific areas of the business? Does the domestic SH do better than the long haul market? What about the Trans Tasman and PI flights? VA are my preferred carrier on Trans Tasman, Free baggage and meals and better seat pitch than Jetstar, and a similar price, cheaper than QF and NZ.

[chookcooker]

Do their losses stem from specific areas of the business? Does the domestic SH do better than the long haul market? What about the Trans Tasman and PI flights? VA are my preferred carrier on Trans Tasman, Free baggage and meals and better seat pitch than Jetstar, and a similar price, cheaper than QF and NZ.
don’t bother asking him.
He’s been a VA hater forever and is loving this right now.

[The Bullwinkle]

Do their losses stem from specific areas of the business?
Ahhh…… Where to begin!

[Icarus2001]

Do their losses stem from specific areas of the business? The part where they fly people around on aeroplanes is the problem.

The frequent flyer scheme made money so a genius manager sold it. A slighter smarter manager then bought it back in house.

[PPRuNeUser0182]

https://www.youtube.com/watch?v=pn1Y00xALlY

Brings back some memories doesn't it.

History is so sad sometimes. The opening song "born to try"! Then it completely unravels at 08:45 into the clip. :(:mad:

[markontop]

Good to see GFI (grinning f.. idiot) eventually appears.
But wait no young things in bikinis and where is idiot’s dress?

[Dookie on Drums]

Brings back some memories doesn't it.

Sure does. Glad I've still got the birthday DVD's from years gone by. Ahhhh those hangar parties....happy memories. Still got a few of the Christmas pressies also.

[Anti Skid On]

Good to see GFI (grinning f.. idiot) eventually appears.
But wait no young things in bikinis and where is idiot’s dress?
He is a thoroughly unlikeable person

[Dookie on Drums]

He is a thoroughly unlikeable person

I remember he came onto the flight deck one day before push back... a limp, weak handshake. Says it all.

[markontop]

The bearded burbler or Benny Hill with a beard?
Can’t decide.
The best irony is the politically correct press lining up to sing his praises.
Free tickets or blatant hypocrisy. (Can’t fault the Age here)
Another chapter in “Branson the unauthorised biography” is due.

[Berealgetreal]

Do their losses stem from specific areas of the business? Does the domestic SH do better than the long haul market? What about the Trans Tasman and PI flights? VA are my preferred carrier on Trans Tasman, Free baggage and meals and better seat pitch than Jetstar, and a similar price, cheaper than QF and NZ.

Worthy of an Order of Australia.

[RampDog]

He is a thoroughly unlikeable person
The business world is chock-a-block full of unlikeable and dysfunctional people with no empathy or symapthy.
Not so with Sir Dick, he has done everything to make himself loved, in turn his staff have made him squazillions.
He's made his $$$$$$$$$ but when did he last publicly discuss his not so flash ventures.
Not deliberately trying to be negative, but who remembers Virgin Cola, Virgin America, Virgin Trains, Virgin Lotteries or Virgin Megastores to name a few?

Curiously for a fella that knows business why has he been content to allow VA to continue making losses year in and year out.
He's obviously outvoted by the Chinese, Singaporean and Middle Eastern partners, so I can only assume it must be a tax dodge?? For the others too??
We know he loves to party, but wouldn't it be great if he came out and spoke seriously about what they intend to do to fix all their woes?
They're playing with Aussies livelihoods here, no fun in that!

[markontop]

He made his money and he has gone. Please don’t get misty eyed. This is what he does - repeatedly. Arrives with all glitz, glamour and sequins then sells.
Weren’t VB staff promised holidays?
Where is that other luminary B Godfrey?
Still following in the white knight’s footsteps?

[TBM-Legend]

He made his money and he has gone. Please don’t get misty eyed. This is what he does - repeatedly. Arrives with all glitz, glamour and sequins then sells.
Weren’t VB staff promised holidays?
Where is that other luminary B Godfrey?
Still following in the white knight’s footsteps?


Correct observation. Study the Branson business model and you will find a trail of V branded failures "after" RB has cashed out and kept minimum exposure. Remember Virgin Atlantic went ti%ts up big time once before and was bailed by SQ.

He runs like the Dali Lama with followers ogling his life style [no disrespect to His Highness]...

[B772]

RampDog. Who could forget Virgin Bride.

[RampDog]

He blamed that failure on the realisation that there weren't too many Virgin brides, haha.
The promotional photos would have scared the rest off.....

https://i.insider.com/574d703352bcd01f7b8c598d?width=700&format=jpeg&auto=webp

What about Virgin Interactive, Virgin Pulse and Virgin Digital, flops too.
There's a whole generation out there that couldn't care less about Branson or the Virgin brand, they're looking for the "next big thing"
Time to re-brand, save millions on franchise fees and start afresh. Paul are you reading this??

[Lapon]

To play the devils advocate it must be asked is this really that much of Bransons fault?
As far I can tell he contributed to the start up, largley cashed out, and was presumably not involved involved in the running of the company.

I dont know enough about the other enterprises mentioned, but if his game is to start a business and largley cash out and hand over the running to someone else, is he really that responsible for the float or flop outcome?

I think responsibility lies with historical management, not particular shareholders in the case of VA

[RampDog]

Too true, Branson is not the Messiah, he's just a naughty boy! He's a distraction from the real issue.
The majority stakeholders not coming up with a better plan to cut the losses or stumping up today to rescue the business.
C'mon Hainan, Nashan, SQ, EY, there are thousands of jobs on the line...... wait a minute who was that at the back of the room who said "tough t!tties, Aussie"?

[markontop]

He wants his brand on the tail.
Therefore he chooses to be associated with it. Can’t have it both ways.

[wheels_down]

To play the devils advocate it must be asked is this really that much of Bransons fault?
As far I can tell he contributed to the start up, largley cashed out, and was presumably not involved involved in the running of the company.

I dont know enough about the other enterprises mentioned, but if his game is to start a business and largley cash out and hand over the running to someone else, is he really that responsible for the float or flop outcome?

I think responsibility lies with historical management, not particular shareholders in the case of VA
The guy is all bells and whistles, but your right, his decision making in the current business was essentially zero. He was wheeled out for route launches in dragons and appeared coming out of baggage belts. That’s about it.

Singapore and Etihad need to bail the thing out. They were both as bad as each other with the tinkering and capex plans. Well, they were the ones pumping the cash in after all, so rightly so. Hogan was then moved on so that relationship and money stream dried up. Singapore got distracted with its own ventures.

He could have saved Virgin America with some cash of his own dollars to keep it as it was albeit not under Alaska, but no dice.

Its no different here. His got his cash and gone. Same with RyanAsia. They made a lot of cash selling out of Tiger and have gone.

[DanV2]

The majority stakeholders not coming up with a better plan to cut the losses or stumping up today to rescue the business.
C'mon Hainan, Nashan, SQ, EK, EY, there are thousands of jobs on the line...... wait a minute who was that at the back of the room who said "tough t!tties, Aussie"?

The current shareholders are perhaps broke themselves due to the pandemic and are busy saving their own asses?

HNA (Hainan) has already been basically taken over by the Chinese Government under bankruptcy and will not likely be a shareholder for much longer.

[Anti Skid On]

The current shareholders are perhaps broke themselves due to the pandemic and are busy saving their own asses?

HNA (Hainan) has already been basically taken over by the Chinese Government under bankruptcy and will not likely be a shareholder for much longer.
Be very interesting to see how the numbers of Chinese travelling LH pans out after COVID-19. How will the vast fleets that have grown within China Southern survive?

[Berealgetreal]

Interesting how 10 years of multi million dollar losses went unchecked by all the various bodies and now after the Government a. Leaves the borders open too long and b. Grounds the entire country, it suddenly becomes an issue.

Where is the mention of the man, board and chair people involved of the last decade? Not one mention. It’s incredible.

How would the government go if the tax payer just switched off paying tax overnight? Probably not too well. Afterall they haven’t exactly managed our money that well have they. Pot call kettle black me thinks.

Whats also been completely ignored is that Paul Scurrah has been working behind the scenes cleaning up the mess and indeed making some massive calls that have never been made in the history of Virgin (Vanz/Tiger Pilot redundancies). Hardly light hearted stuff.

So clearly the company is moving in the right direction but hey if you work under a government that ignores all the warning signs for eight weeks straight then haphazardly ground the country then the request for help shouldn’t be a surprise then should it?

Meanwhile the frontline staff and their families just sing from the song sheet and in the end will just get fricken speared while all the executives parachute into other roles.

Close it up go on. Get Ryanair or Air Asia in see how you like those boats.

[RampDog]

In the Brave New World, I foresee Air New Zealand becoming the domestic carrier to fill the defunct VA's shoes (slots?)
They will buy out Tiger for $1.00, making them instant Aussies.
Hey it's a rumour network after all.....:E

[-41]

Tiger would come with debt
VA comes with debt
VARA comes with debt

unfortunately it looks like no one will buy Virgin group with Billions of debt, not to mention the existing shareholder mix is toxic.

[PDR1]

"The theory of evolution by natural selection, first formulated in Darwin's book "On the Origin of Species" in 1859,

Not true. The basic theory of survival of the fittest and evolutionary development was around much earlier. For instance Lamark published a proposed theory on "Transmutation of Species" in 1809, but it is understood that he was codifying and recording ideas that had been being widely discussed in the scientific community for some time, building on the work of people like Joseph Kölreuter and Erasmus Darwin (Charles' granfather). Robert Grant and Robert Knox started joining up the theories into a structure relating to a "single ancestor species" theory, and in 1844 Robert Chambers published work linking all of this to the fossil record.

Charles Darwin did a lot of useful work collating and assembling all of this into a coherent structure that he then published in a book, but he didn't invent the idea or even formulate it.

NALOPKT(&EFGAS),

PDR

[RampDog]

-41, all that debt, it's so very true.
But any entity who invests money in airlines is intrinsically taking a financial risk, it's been proven too many times.
But like every gamble, it's a matter of balancing your bet against how much you can make in return (I'm not a gambler btw, I work work too hard to just throw money away)
The return would be a chance to play for some of the best domestic money spinning routes in the entire world.
https://www.forbes.com/sites/ericrosen/2019/04/02/the-2019-list-of-busiest-airline-routes-in-the-world/#1b3feefe1d48

[longjohn]

Ramp - why would anyone invest in a business that’s barely made a cent for the last 10 years, is saddled with debt and is dominated by its main competitor?

Now imagine its market has collapsed and is unlikely to return to previous levels for some time?

Branson took millions as did others when this business was floated. Why should taxpayers now bail it out?

[AmIInsane]

Not true. The basic theory of survival of the fittest and evolutionary development was around much earlier. For instance Lamark published a proposed theory on "Transmutation of Species" in 1809, but it is understood that he was codifying and recording ideas that had been being widely discussed in the scientific community for some time, building on the work of people like Joseph Kölreuter and Erasmus Darwin (Charles' granfather). Robert Grant and Robert Knox started joining up the theories into a structure relating to a "single ancestor species" theory, and in 1844 Robert Chambers published work linking all of this to the fossil record.

Charles Darwin did a lot of useful work collating and assembling all of this into a coherent structure that he then published in a book, but he didn't invent the idea or even formulate it.

NALOPKT(&EFGAS),

PDR

The ‘ No idea of the context of the posts ’ award goes to PDR1.

PDR1 you utter flog.

[Switchbait]

Alliance or Air New Zealand for the win.....

[IsDon01]

Alliance or Air New Zealand for the win.....

Air NZ?

Ansett, failure, who owned Ansett?
Virgin, probable failure, who was a shareholder?

Two dismal failures after two attempts.

Maybe Kiwis are slow learners but I don’t think even a Kiwi would try that for the third time.

[Berealgetreal]

Alliance or Air New Zealand for the win.....

Agree Alliance, sharp company they could take over the reigns. I think it’s also possible to see an Asian carrier fill the shoes of Virgin. Air Asia etc. There are already calls to open it right up.

[RampDog]

Ramp - why would anyone invest in a business that’s barely made a cent for the last 10 years, is saddled with debt and is dominated by its main competitor?

Now imagine its market has collapsed and is unlikely to return to previous levels for some time?

Branson took millions as did others when this business was floated. Why should taxpayers now bail it out?
longjohn, excellent point and a very valid question relative to Virgin Australia's current predicament.
No person or business with any sense would throw 100s millions in, so why should the Australian Government?
The only possible way they could justify it, is that they are rescuing Aussie jobs, and from past experience that was never their credo. (Remember HIH and Ansett, Ford, Holden etc etc, goodbye jobs!)
It would be the height of financial incompetence to use today's and future taxpayer dollars to prop up this business.
No one wants airline employees above or below the wing, to lose their current jobs. Been there, and you wouldn't wish it on anyone.
The challenge for the Government will be rescuing the economy, as there will be not one industry spared by the COVID19 crisis.
Government has done its bit and now VA management, if they really believe they have a viable business, has to come up with a different strategy......

Is it not true that your current situation is, to a large extent, the result of your past actions, choices and experiences?
The positive side should be that your future is determined by how you act in the present moment.

[Window heat]

Just watched the video, Branson had no idea, he just seemed to have been lobbed in and given a microphone.

[ECAMACTIONSCOMPLETE]

Air NZ?

Ansett, failure, who owned Ansett?
Virgin, probable failure, who was a shareholder?

Two dismal failures after two attempts.

Maybe Kiwis are slow learners but I don’t think even a Kiwi would try that for the third time.

The difference with this though is that they wouldn’t be investing in another airline to gain a foothold in the Aussie domestic market. They can use their AOC, aircraft and crew. Just set bases in MEL, SYD & BNE and it’s good to go.

ive always felt it a little strange that I, as an Aussie, flying a VH registered plane can fly NZ domestic services, but thems the rules. Absolutely no reason the Kiwis can’t do the same here.

[kiwi grey]

I've always felt it a little strange that I, as an Aussie, flying a VH registered plane can fly NZ domestic services, but thems the rules.
Absolutely no reason the Kiwis can’t do the same here.
Last time that looked like a possibility, Keating (IIRC) changed the rules so that it couldn't happen.
That in turn led to Air NZ buying Ansett to attempt to achieve a similar result.
Which in its turn led to tragic catastrophe

[Lapon]

I don’t think even a Kiwi would try that for the third time.

Adding to both Virgin and Ansett the attempts at getting hold hold of Australian Airlines before the Keating goverment blocked them, you have three attempts in the last 30 years.
If it were not for the fact Air NZ has just been bailed out again I wouldn't have put it past them.

[Turnleft080]

https://www.tvnz.co.nz/one-news/new-zealand/air-nz-averaging-two-passengers-per-flight-during-coronavirus-lockdown-exec-says
Speaking of ANZ this is ridiculous.

[Denied Justice]

The deputy PM, Michael McCormack is reported to have said this morning that there would be no exceptional assistance for one company. “Whatever we do for Virgin we are going to have to do for other companies as well. We can’t just pick and select individuals and winners out of this.” He said Virgin should consider raising capital from its existing shareholders, including Singapore Airlines and Etihad Airways.

[DanV2]

The difference with this though is that they wouldn’t be investing in another airline to gain a foothold in the Aussie domestic market. They can use their AOC, aircraft and crew. Just set bases in MEL, SYD & BNE and it’s good to go.

ive always felt it a little strange that I, as an Aussie, flying a VH registered plane can fly NZ domestic services, but thems the rules. Absolutely no reason the Kiwis can’t do the same here.

NZ just got a loan from their government. Don't think NZ will be setting up in Australia anytime soon.

On another note, the same anti argument can be applied to the Singaporeans.

SIA had two previous goes at the Australian market through equity (Air NZ/Ansett Group and Tiger Airways Australia) and both equity investments ended in dismal failure. SIA also had full ownership control of the later (although separate management teams) before they "sold TT to VA" to save face on their own incompetence.

[Arctaurus]

Transfer 100% ownership to SQ for $1 which includes them taking the debt. VAH is folded and re launched as Tiger (already a familiar entity here).

Etihad and China don't have any capacity for funding, so they write the loss off.

Branson won't fund it in this environment, so he'll have to take a haircut as well.

Get rid of all the regionals and stick to core mainline operations with one aircraft type.

[megan]

Yesterdays "Australian" - behind a paywallExpectations are mounting that Virgin Australia will receive government assistance to stave off collapse, with suggestions key decision—makers have long memories about the windfall reaped by Qantas after Ansett Australia collapsed in 2001.

Virgin Australia has gone cap- in-hand to the federal government asking for a $1.-4bn loan, which if not repaid would see the government take an ownership stake within two or three years.

Singapore Airlines, HNA, Etihad and China’s Nanshan all own about 20 per cent of the airline, and Virgin Group about 10 per cent, while the rest is publicly listed.

The understanding is that Singapore Airlines would have been willing to bail out the Australian carrier. However, some believe the government would be hesitant about the foreign airline gaining a foothold in the Australian market. Singapore Airlines is essentially owned by the Singaporean government.

Preventing Singapore Airlines from owning Virgin Australia would in fact offer protection for the government-backed Qantas.

Singapore Airlines was also understood to have been keen to buy Ansett when that airline collapsed.

The dilemma for the federal government is that if it does not offer help to Virgin Australia, it faces a situation where Qantas would have a market monopoly, to the potential detriment of Australian travellers.

This is if it also disallows full foreign ownership.

Qantas made attempts to seek assistance from the federal government in the aftermath of the global financial crisis around 2014, but the treasurer at the time, Joe Hockey, declined the request.

[Toruk Macto]

Etihad and China don't have any capacity for funding, so they write the loss off.

Abu Dhabi is the richest , they could buy EK before breakfast . Australian tax payers asked to bail out a company that when profitable will pay dividends to the Chinese government ( HNA) , Abu Dhabi and Singapore government. If the Australian government put 1.4B in then they better get a seat at the table and take some profit along side of these other governments .

[DanV2]

Transfer 100% ownership to SQ for $1 which includes them taking the debt. VAH is folded and re launched as Tiger (already a familiar entity here).

Etihad and China don't have any capacity for funding, so they write the loss off.

Branson won't fund it in this environment, so he'll have to take a haircut as well.

Get rid of all the regionals and stick to core mainline operations with one aircraft type.

Been there done that for SQ, re Tiger Airways. SQ failed dismally and ended up selling their 50% stake to VA for $1.

SQ were also offered AN for $1 before AN filed administration and they declined. Likely will be same scenario if SQ were offered VA for $1 (5B debt and all).

Edit: Also, if SQ couldn't make their three attempts at the Australian market work (Strike 1: Air New Zealand/Ansett, Strike 2: Tiger Airways and Strike 3: Virgin Australia), especially when SQ had full management control of Tiger Australia, what makes people think SQ could make a 4th attempt work?

SQ are not much better than EY when it comes to investments. Mediocre at best, when compared to EY which are largely failures.

[Anti Skid On]

Adding to both Virgin and Ansett the attempts at getting hold hold of Australian Airlines before the Keating goverment blocked them, you have three attempts in the last 30 years.
If it were not for the fact Air NZ has just been bailed out again I wouldn't have put it past them.
Bailed out? No, offered a NZ$900 million loan facility, bit like QF have been offered by Scomo. And when they can't repay the loan the company becomes a state owned enterprise.

[wheels_down]

Been there done that for SQ, re Tiger Airways. SQ failed dismally and ended up selling their 50% stake to VA for $1.

SQ were also offered AN for $1 before AN filed administration and they declined. Likely will be same scenario if SQ were offered VA for $1 (5B debt and all).

Edit: Also, if SQ couldn't make their three attempts at the Australian market work (Strike 1: Air New Zealand/Ansett, Strike 2: Tiger Airways and Strike 3: Virgin Australia), especially when SQ had full management control of Tiger Australia, what makes people think SQ could make a 4th attempt work?

SQ are not much better than EY when it comes to investments. Mediocre at best, when compared to EY which are largely failures.

SQ never had full control of Tiger Oz, same in Singapore. The Poms did. They gave full rein to RyanAir and co. Who remembers Tony Davis? Tim Berry....Mr Dugan. It was quite odd, a booming middle class market and the hand balled the entire concept to a group of British and had nothing to do with it.

When things continued to go backward and SQ decided to take control, well they didn’t in Oz, they just ‘sold’ or told Virgin your taking it.

What is the point in kickstarting Tiger again with half a dozen 737s. Clearly the leisure market will take a year to build once this is over, just cede it and let the other guys in T4 do the job.

[Dookie on Drums]

It's wishful thinking that VA will be saved. No one with any sense will invest in a loss making venture. I feel for the guys and gals but sometimes you have to eat a sh!t sandwich and it's not their fault. People are kidding themselves if they think everything will return to normal in 12 or 18 months. Those lower down the rung...forget about it. There is going to be an abundance of VERY qualified crew out there to fill VERY limited positions.

[exfocx]

Having gone through the Ansett demise and......................................................Eve n as an employee of AN, at the time, I did not feel it right AN was propped up by taxpayers funds. Those funds would soon be far better spent on our War of Terror throughout the Middle East.

What a sad comment; The War on Terror? More innocent people killed in a war that never had to happen and is still ongoing today. Evidence manufactured for a gnome of President to go to war for his ego, how can anyone be happy with the outcome of Iraq and Afghanistan.

[exfocx]

Correct observation. Study the Branson business model and you will find a trail of V branded failures "after" RB has cashed out and kept minimum exposure. Remember Virgin Atlantic went ti%ts up big time once before and was bailed by SQ.

He runs like the Dali Lama with followers ogling his life style [no disrespect to His Highness]...

Yes, just like a lot of IPOs; pigs with lipstick and an endorsement from a financial house that is gunna get a nice fat commission and then 2-5 yrs down the track it goes to the abattoir.

[Dragun]

Is anyone giving any thought to the fact that under normal business conditions with a functioning economy, yes, there would probably be another carrier from any number of places that could come in to pick up where VA left off as is being discussed above....but every carrier everywhere in the world will be nursing a balance sheet too weak to do anything but pick up their own pieces, or have been bailed out by their own respective government that would severely restrict investments in markets anywhere, let alone here, prior to those debts being paid or conditions satisfied?

Why is no one understanding that this is just simply not going to happen any time in the next 2-3 years given the unique circumstances surrounding the ultimate reason that Virgin will fail if there's no bail out?

This is 100% different to a normal business failing in a free market.

All the post above just seem to ignore this one simple fact - that VA has had its operations shut down by the government (indirectly not their fault) which, regardless of its balance sheet prior to this crisis, stopped any chance it had of getting back into the black. Most importantly, this is not unique - every airline in the world is in the same boat. Qantas itself will likely need a bail out if this continues, at the very least for its international segment.

Why are people focusing so heavily on the past and ignoring the likely outcome, that no one is coming and a monopoly will exist?

You can point fingers at poor management and bad balance sheets and the fact they deserve to fail, not arguing about that, but the rife speculation of some other carrier coming to pick up the pieces shows a delusion beyond reason at what is actually happening on a broader level here. Please have a think about that fact before speculating on who, what, where and when the next carrier will come from. It's naive at best.

The country needs to prepare itself for a monopoly for a very long time, at least in the premium market, if Virgin goes to the wall. Those are the objective facts.

Time will tell.

[porch monkey]

Your wise words don't fit the general agenda here, mate, that's why......

[deja vu]

[QUOTE=Gnadenburg;10736457]Having gone through the Ansett demise and a period of unemployment, the government did a good job with helping ensure the payment of owed wages and benefits. The tax liability was small and I ended up with far more cash in hand than expected.

If I recall correctly, you guys got your "owed wages and benefits' as as an enforced levy on air tickets from a blackmailed flying public, a disgraceful sham.

[ABP]

Is anyone giving any thought to the fact that under normal business conditions with a functioning economy, yes, there would probably be another carrier from any number of places that could come in to pick up where VA left off as is being discussed above....but every carrier everywhere in the world will be nursing a balance sheet too weak to do anything but pick up their own pieces, or have been bailed out by their own respective government that would severely restrict investments in markets anywhere, let alone here, prior to those debts being paid or conditions satisfied?

Why is no one understanding that this is just simply not going to happen any time in the next 2-3 years given the unique circumstances surrounding the ultimate reason that Virgin will fail if there's no bail out?

This is 100% different to a normal business failing in a free market.

All the post above just seem to ignore this one simple fact - that VA has had its operations shut down by the government (indirectly not their fault) which, regardless of its balance sheet prior to this crisis, stopped any chance it had of getting back into the black. Most importantly, this is not unique - every airline in the world is in the same boat. Qantas itself will likely need a bail out if this continues, at the very least for its international segment.

Why are people focusing so heavily on the past and ignoring the likely outcome, that no one is coming and a monopoly will exist?

You can point fingers at poor management and bad balance sheets and the fact they deserve to fail, not arguing about that, but the rife speculation of some other carrier coming to pick up the pieces shows a delusion beyond reason at what is actually happening on a broader level here. Please have a think about that fact before speculating on who, what, where and when the next carrier will come from. It's naive at best.

The country needs to prepare itself for a monopoly for a very long time, at least in the premium market, if Virgin goes to the wall. Those are the objective facts.

Time will tell.
Agree completely. Also in their defense, analysts predicted a break even point for just after July this year, due to the cost reduction restructure (remember, there's a difference between statutory and underlying). Virgin Australia was expected to slowly make it through without COVID-19. At this stage however, I don't think a direct "bailout" from the Government will occur.

The Financial Review is owned by Channel 9 and both have reported numerous time loudly and proudly the Government will not bailout Virgin Australia. Other articles quote the Financial Review and Channel 9. Once again, I personally don't think it will happen in the form the CEO wants, but the battle is not over just yet. Once again, this evening the Financial Review has just posted another article yet again against Virgin Australia, rebuking Virgin Australia's monopoly theory. I thought they'd wait at least one day before writing another article against the airline.

https://www.afr.com/companies/transport/airports-question-virgin-s-monopoly-theory-20200403-p54gp2

[ABP]

[QUOTE=Gnadenburg;10736457]Having gone through the Ansett demise and a period of unemployment, the government did a good job with helping ensure the payment of owed wages and benefits. The tax liability was small and I ended up with far more cash in hand than expected.

If I recall correctly, you guys got your "owed wages and benefits' as as an enforced levy on air tickets from a blackmailed flying public, a disgraceful sham.
You remember correctly. It was the Air Passenger Ticket Levy (Imposition) Bill 2001. It was $10 a ticket, which is $16 in today's market.

[Fatguyinalittlecoat]

Is anyone giving any thought to the fact that under normal business conditions with a functioning economy, yes, there would probably be another carrier from any number of places that could come in to pick up where VA left off as is being discussed above....but every carrier everywhere in the world will be nursing a balance sheet too weak to do anything but pick up their own pieces, or have been bailed out by their own respective government that would severely restrict investments in markets anywhere, let alone here, prior to those debts being paid or conditions satisfied?

Why is no one understanding that this is just simply not going to happen any time in the next 2-3 years given the unique circumstances surrounding the ultimate reason that Virgin will fail if there's no bail out?

This is 100% different to a normal business failing in a free market.

All the post above just seem to ignore this one simple fact - that VA has had its operations shut down by the government (indirectly not their fault) which, regardless of its balance sheet prior to this crisis, stopped any chance it had of getting back into the black. Most importantly, this is not unique - every airline in the world is in the same boat. Qantas itself will likely need a bail out if this continues, at the very least for its international segment.

Why are people focusing so heavily on the past and ignoring the likely outcome, that no one is coming and a monopoly will exist?

You can point fingers at poor management and bad balance sheets and the fact they deserve to fail, not arguing about that, but the rife speculation of some other carrier coming to pick up the pieces shows a delusion beyond reason at what is actually happening on a broader level here. Please have a think about that fact before speculating on who, what, where and when the next carrier will come from. It's naive at best.

The country needs to prepare itself for a monopoly for a very long time, at least in the premium market, if Virgin goes to the wall. Those are the objective facts.

Time will tell.

Totally agree that VA have been thrown into this COVID crisis through no fault of their own. It's not their fault. But so have every other business in Australia. And i think that's the point the Government is making. They can't bail out VA without bailing out every other business that has been neutered by this. They can only supply assistance to an industry. VA are stuck. They have to make it work with what they have.

[ABP]

Totally agree that VA have been thrown into this COVID crisis through no fault of their own. It's not their fault. But so have every other business in Australia. And i think that's the point the Government is making. They can't bail out VA without bailing out every other business that has been neutered by this. They can only supply assistance to an industry. VA are stuck. They have to make it work with what they have.
So everyday Aussies should make it work with what they have too? We've all been given a 'bailout'!

[Fatguyinalittlecoat]

Yep, we have. That's it.

Funds will only flow to an industry, not a company.

[Icarus2001]

We've all been given a 'bailout'! Don't worry you will be paying it back to the government soon enough through a higher GST and other taxes. Think of it as a loan...

[chance]

Yep, we have. That's it.

Funds will only flow to an industry, not a company.
Given the vast majority of erudite comments that reflect a knowledge of the history of VA and its various owners and iterations one could only think that:
"THE VIRGIN IS NO LONGER A VIRGIN"
Should it be rescued it should be renamed one of the following choices: "VIRGIN MARY" , "IMMACULATE CONCEPTION" or "JOSEPH AIRLINES"

[Dragun]

Totally agree that VA have been thrown into this COVID crisis through no fault of their own. It's not their fault. But so have every other business in Australia. And i think that's the point the Government is making. They can't bail out VA without bailing out every other business that has been neutered by this. They can only supply assistance to an industry. VA are stuck. They have to make it work with what they have.

Yes it's a reasonable point that has been around the media with the unfortunate difference in this case that Virgin forms part of critical infrastructure whether the government and public like it or not. In addition it contributes around $11 billion p.a. directly to the Australian economy and much more indirectly. I'm not saying other big business won't come to this either, but this is the first and it's a much bigger enterprise to let go than a collection of smaller and generic SMEs. I know that sounds harsh, and it's not meant to, but just highlighting the reality of the current predicament for government.

[Dragun]

Yep, we have. That's it.

Funds will only flow to an industry, not a company.

This does appear to be the angle even PS is going for now. He even went as far as to essentially ask for $5 billion to include Qantas suggesting a collective overdraft facility during interviews this morning. It's a smart play because although Virgin's need is immediate, Qantas would well be advised to consider their medium term position and the likely prospect of having to do the same in 12 months if international demand is still non-existent. It will be a tough ask for them to go to the government asking for money at that point if they advocated the failure of Virgin 6 months prior and got their way. For now, they are saying they can make it through, but as it has been shown already, the nature of this beast is unpredictable and very different.

Perhaps a joint approach by both airlines will be the smarter play, gain the traction they are looking for with public support and not favour any one carrier as the government has stated.

Again, time will tell.

[Alfie.floor]

Given the vast majority of erudite comments that reflect a knowledge of the history of VA and its various owners and iterations one could only think that:
"THE VIRGIN IS NO LONGER A VIRGIN"
Should it be rescued it should be renamed one of the following choices: "VIRGIN MARY" , "IMMACULATE CONCEPTION" or "JOSEPH AIRLINES"
what’s another name for someone who trades money for love?😉

[Berealgetreal]

fatlittleguyjnacoat, my post discussed it but not as well written as yours ;)

How is any airline supposed to survive in this environment? As stated above if it goes long enough QF will need help as well. It’s simply not possibleto have hundreds of airplanes sitting idle for months or years and just expect them to crank up as per normal on the other side. Maybe they assume it’s like the government where he money is endless.

The reality is that every Tom Dick and Harry has been sitting at the airline’s table eating Xmas dinner for years and years. Dare say it’s time for some of that money to be to be redistributed back.

[krismiler]

The major difference is that Qantas is well run and profitable in normal times whereas Virgin have lost an average of $215 million a year for the last ten years. Any bailout without a significant restructuring is likely to see the losses continue. When Ansett folded, Virgin Blue was in a position to step into the gap and prevent QF from having a monopoly, this time there is no potential replacement waiting in the wings and given the current financial situation, no one will be wanting to try.

A possible compromise would be a bail out of both airlines, but only to prevent a monopoly which would be unacceptable to the ACCC. The conditions on Virgin might be a cessation of wide body operations, a removal of premium class and a restructuring of the company back to its low cost roots.

A 70/30 market split in favour of QF, who would fly the long haul routes and carry the higher yielding pax, leaving the lower yielding pax to Virgin who would become a Ryanair/Easyjet low cost carrier. Whilst not a perfect solution, jobs would be retained and a monopoly avoided. Losses at Virgin could be brought down to a much more manageable level, there would be choice and some degree of competition in the market.

[-41]

It's wishful thinking that VA will be saved. No one with any sense will invest in a loss making venture. I feel for the guys and gals but sometimes you have to eat a sh!t sandwich and it's not their fault. People are kidding themselves if they think everything will return to normal in 12 or 18 months. Those lower down the rung...forget about it. There is going to be an abundance of VERY qualified crew out there to fill VERY limited positions.

great news then!

No more pilot shortage, problem solved with the China virus.

[Gnadenburg]

What a sad comment; The War on Terror? More innocent people killed in a war that never had to happen and is still ongoing today. Evidence manufactured for a gnome of President to go to war for his ego, how can anyone be happy with the outcome of Iraq and Afghanistan.

Nope. The War of Terror. That was a joke, Joyce.

I see you have been impaled with a CX sense of self-seriousness. Lighten up fella.

[exfocx]

Nope. The War of Terror. That was a joke, Joyce.

I see you have been impaled with a CX sense of self-seriousness. Lighten up fella.

Lolololol sorry, read that as ON.

[Colonel_Klink]

The major difference is that Qantas is well run and profitable in normal times whereas Virgin have lost an average of $215 million a year for the last ten years. Any bailout without a significant restructuring is likely to see the losses continue.

You’d have to say a significant restructure has and is going on. The 750 redundancies announced last year represented about 7.5% reduction in (mostly) head office staff.

You now have had 200 odd Tiger pilots been made redundant, as well as TT cabin crew from Sydney and Brisbane as the whole TT operation is to be brought on to VA AOC. This will drive further efficiencies and I would envisage more possible job losses from TT head office in ML.

And finally you have had the whole NZ operation, 200 pilots as well as the entire VANZ cabin crew and AKL and CHC based office staff are gone too. Again, the international short haul network when it eventually returns is to be crewed and flown from Australia.

These are all big changes and what I would consider significant restructuring. If VA come out the other side of this, they will be a lot leaner operation.

[Dragun]

The major difference is that Qantas is well run and profitable in normal times whereas Virgin have lost an average of $215 million a year for the last ten years. Any bailout without a significant restructuring is likely to see the losses continue.

A couple of points in relation to this.

Firstly, the restructuring was already in place with projections Virgin was well on track to break even by mid to late this year. Scurrah had already made significant changes to structure and the cost base with more to come. This was why was brought in by the board and he was doing his job well. The timing of this is unfortunate and year from now Virgin would likely have been at or close to profitability.

Nevertheless, the historic profits or losses of an airline are largely irrelevant in this case, despite the claims here that they are. Debating this is an emotional reaction to a lack of knowledge of business in general. It is perfectly acceptable, and often done, that investment in a loss making business takes place. It's important to understand the basic premise that a loss making business (Uber, as one example) can continue to increase in value despite posting billions in losses again and again.

The underlying value of a business, both direct and indirect, does not relate to whether it is posting a profit or a loss or whether it's worthy of investment - this depends on its importance and projections, both of which are a strong positive for Virgin given the very recent changes within the business. Once again, and most importantly, this is not a case of failure in a free market capitalism environment - that can't be stressed enough. The other point to make is that Virgin has added billions to Australia's economy while foreign (not domestic) shareholders absorbed those losses. Not a bad outcome for the country.

By the "loss logic", had this happened 5 years ago, people have been pointing at Qantas that their billions in losses in the few previous years made them unworthy of a bail out. We know this simply not to be the case - Qantas adds far too much to Australia's economy and more to allow it to go under, regardless of its balance sheet.

Secondly, the factors that are largely being taken into account according to the media are the fact that it is majority foreign owned, and whether or not the infrastructure adds enough to the country's economy for it to be worthwhile of lending. Regarding foreign ownership, the government just last week bailed Rex out, an airline 100% foreign owned by a Singaporean and one that has made consistent profits for years with all of those profits heading offshore. The logic of not bailing out a foreign carrier because it is foreign owned has already been show to be secondary in the current environment with the government focusing on whether or not they believe its survival adds enough to the economy and the regional infrastructure. Just this morning the government is chartering both Qantas and Virgin flights, underwriting their losses, to repatriate citizens. This is an important recognition that Virgin is indeed adding to an important part of our country's infrastructure, by that action alone.

I'm trying to be impartial and objective here and simply trying to point out the realities of how it works on a business and economic level. Obviously there is a lot of emotion and sentiment but overall, it simply does not appear to be in the country's interest for Virgin to go under given the specific circumstances surrounding the predicament they find themselves in. There will be no one to fill the void and the country will pay the price in many different ways for many years to come, which isn't desirable for anyone at all.

Cheers.

[No Idea Either]

Dragun, you’re being much to reasonable:-) let’s also mention that VA pays (I believe, but don’t have an actual figure) about 400 million a year in employee income and payroll taxes. Let’s also mention that QF has breached its foreign owned ratio a few times over the years, yes it was marginal due to bulk buying and was corrected when detected but, for a brief moment it was majority foreign owned. AJ has been spruiking for years to relax the Qantas Sale Act so they could get more foreign investment. Imagine if HNA or Etihad had invested in QF instead, and they would have if allowed, and were now struggling, dodged a bullet there........

[markontop]

Optimistic business projections based on a “turnaround” playing with other people’s money?
Which airline has ever made money from a loss making position reinventing itself into the worst recession in history?
But heh I’m a pilot. I’ll wait for the business experts and those voicing “national interest” with a side of self interest to prove me wrong.
PS is that you?

[dragon man]

Interesting read, I make no comment.

https://www.zerohedge.com/economics/delta-passenger-volumes-down-94-it-burns-60mm-day-buffett-dumps-delta-southwest-shares

[Dragun]

Optimistic business projections based on a “turnaround” playing with other people’s money?
Which airline has ever made money from a loss making position reinventing itself into the worst recession in history?
But heh I’m a pilot. I’ll wait for the business experts and those voicing “national interest” with a side of self interest to prove me wrong.
PS is that you?

I'm not sure I understand your point about other people's money. It's public company with an incredibly small free float. Can you elaborate?

Businesses project all the time based on restructure and turn it around. Qantas shed 5000 jobs as part of attacking their cost base only a few years ago, this is common practice every few years by any large enterprise.

Not trying to prove anyone wrong or right, no one knows which way this will go. As I've said all along, I'm just being objective which means no self interest. I'd be the first to say that if Virgin found themselves going hat in hand to the government a year ago (in a normal, functioning economy) then they absolutely should not have received it and gone to the wall. However, these times and the reasoning behind this request is very, very different. That's the reality whether people like it or not.

[crosscutter]

However, these times and the reasoning behind this request is very, very different. That's the reality whether people like it or not.

If 8 out of the last 10 years Virgin had been profitable the argument might hold, but it’s the other way round.

For this reason, even with possible support, I suspect the business we know is gone. You can put a line through every route than ran at a loss the last 24 months. Reduced capacity at a minimum. Assets sold to match the demands of the white knight. QF will be rationalising also.

[markontop]

I would say that post Carona there will be no need for the capacity from pre Carona from even one airline.
QF will have way more aeroplanes than the market needs.
Other people’s money;
Creditors (please help, national interest, keeping the air fair- twenty years old now)
Tax payers (that would be Airnav charges)
Staff (leave without pay, that would be yours)
Playing would be the newspaper ads.
Finally do VA have the money to last for how long?

[crosscutter]

Why do people think Virgin or Qantas is different to Holden? You’ve got to prove an ability to stand on your own two feet. What more support can the government provide that is industry wide? How do you provide support to one business without changing the competitive landscape? If you have the answers get it public quickly because it’s going to be more effective than a political advertising campaign!

[Berealgetreal]

It’s better to exclude all the actions taken by Scurrah as that doesn’t justify spearing 10,000 hard working employees Then you can hand over the keys to all the gates and routes to the larger competitor which already has the lions share of corporate and government work for decades.

Can’t imagine how they made a profit and we didn’t adopting their petulant child for decade.

Let’s also ignore Godfrey’s record: 9 profits out of 10 with the 1 being the GFC while we are at it.

The orchestrator of most of the problems rode off into the sunset with millions never to be questioned by anyone.

[B772]

VAH can expect zero bail out funds from the Commonwealth. If the Queensland Government wish to assist that is their prerogative. I am afraid VAH are going to have a slow uncomfortable demise. A contact in Treasury has stated VAH are in a hopeless position. The VAH board have to make a decision soon re administration or face the prospect of jail time. Ansett were put in Administration after losing $182M over the course of a year.

[Berealgetreal]

A hopeless position created by someone that didn’t close the borders when it was clear what was going to happen.

The restructure had started a year ago and was gaining momentum.

[t_cas]

. A contact in Treasury has stated VAH are in a hopeless position. The VAH board have to make a decision soon re administration or face the prospect of jail time..

Careful. Does your source have a name or are you just trying to influence an outcome....? This is the same as AJ claiming he has intimate knowledge of his competitors financial position and stating such to journalists....

[das Uber Soldat]

A hopeless position created by someone that didn’t close the borders when it was clear what was going to happen.

The restructure had started a year ago and was gaining momentum.
This is an absurd argument. You cannot be a financial disaster for more than 10 years straight and then lay the blame for your failure with a perceived misstep by the Government in dealing with an unprecedented health crisis at the 11th hour. Its like skydiving with a faulty parachute into someones house, then claiming the house owner is responsible for the death because they built the house in wrong place.

The 'hopeless position' was created by Virgin management, stop trying to offset blame. Virgin have nobody to blame but themselves.

[Berealgetreal]

This is an absurd argument. You cannot be a financial disaster for more than 10 years straight and then lay the blame for your failure with a perceived misstep by the Government in dealing with an unprecedented health crisis at the 11th hour. Its like skydiving with a faulty parachute into someones house, then claiming the house owner is responsible for the death because they built the house in wrong place.

The 'hopeless position' was created by Virgin management, stop trying to offset blame. Virgin have nobody to blame but themselves.


You must be pretty confident the situation will resolve pretty shortly. What if it drags out and starts eating away at the QF reserves.

The government had all the information to close the borders and fumbled there way to where we are today.

You’re happy with the actions of the government?

What I can’t get my head around is front line QF staff wishing the failure of friends and former colleagues.

[Paragraph377]

Interesting read, I make no comment.

https://www.zerohedge.com/economics/delta-passenger-volumes-down-94-it-burns-60mm-day-buffett-dumps-delta-southwest-shares
Good link DM. I read that article early this morning. There are some serious aviation issues in play. United could be losing up to $100m per day. Phenomenal amounts of money.

I stick to my prediction, albeit based upon a lot of unknowns yet to come, there will be only 20 or so mainline carriers worldwide that will remain in play once this crisis is over. As aviators we often get caught up in what’s happening in our own patch. It’s not a criticism, it’s just what we do. But there is a bigger picture and we are only a small spec. Just as the world changed after 9/11 the world will have changed again by the time COVID-19 it is under control. Economies, house prices, taxation levels, future infrastructure, services, superannuation - all changed, and not for the better. Sadly, VA is gone. Done and dusted. It’s the bitter and unpalatable truth. It joins Ansett, Pan Am and others. Any Phoenix rising out of VA’s ashes will be a different, new airline.

The worlds obsession with printing money, endless debt and creative accounting could only go on for so long. The day Nixon ended the gold standard and murdered the Bretton Woods system was the day fiat money entered the worlds financial system, which after 50 years has culminated in the mess we are in today. COVID-19 is the match that finally ignited the financial tinderbox. Some of you younger pups will be thinking; ‘what is this old fart going on about’. Sadly, the inevitable collapse of the Ponzi scheme has commenced. If you think the **** has hit the fan now, I suggest you buckle in tightly as this is only the beginning. Unless you have studied economics and understand financial systems in depth you likely never saw this coming. Not in a million years.

Best of luck to everybody as we are going to need it.

[das Uber Soldat]

You must be pretty confident the situation will resolve pretty shortly. What if it drags out and starts eating away at the QF reserves.

The government had all the information to close the borders and fumbled there way to where we are today.

You’re happy with the actions of the government?
Yes, the Government actions are a contributory factor. The house in my analogy is also a contributor factor, after all, it killed the skydiver. Whats plainly obvious however, is that if the skydiver didn't hit the house, he would have hit something else just as deadly soon enough.

I've listened for more than a decade about Virgins 'plans' to turn it all around. The reality is no investor would look at their situation and assign this claim any credibility beyond all those before it, which is exactly why they've been entirely incapable of securing financing and have had to approach Government.

Now, as you say, this may drag on (hope to hell it doesn't), and it may eat into QF's ability to remain solvent. The difference however, is that COVID would be the cause, not a contributory factor. QF is profitable, and would have continued to exist indefinitely were it not for this crisis. Virgin on the other hand, well, there aren't any "QF pilots worried about employment in 2021" threads that were created long before this crisis now are there?

Now there is a temptation to take what I've written and believe it an attack on the people of Virgin, or a desire to see it go. Thats the last thing I want, I like all of us have many friends there and know the devastation a collapse will bring. However this doesn't mean I accept the apportioning of blame where it doesn't belong.

If Virgin folds, the primary cause is their own management.

[Toruk Macto]

What’s virgin worth to Australia post virus ? If government want cheap seats to help stimulate economy then there are lots of wide body’s flying in from overseas that can stop in Darwin and pick up domestic passengers . Triangulate Brisbane , Sydney and Melbourne before heading back overseas , requires opening Australia to overseas players . Allow Qantas a monopoly? They have capacity but watch prices rise and Qantas get bloated and slow ? $1.4B is a big ask to keep a badly managed company going and it does not pass the pub test for fairness but what’s in best interest of the nation for next 3-5 years ? I think the owners of virgin know the answer and that’s why they not putting any money in .

[crosscutter]

What I can’t get my head around is front line QF staff wishing the failure of friends and former colleagues.

This comment is off the mark. That’s not the topic being discussed. I have friends who have already lost their job. I am deeply saddened and frustrated by it.

It doesn’t mean a fair argument can’t take place around whether a business which has lost money for 7 straight years deserves tax payer support.

I suspect some support will come, but it will allow a Virgin barely recognisable to the one we had.

[34R]

What I can’t get my head around is front line QF staff wishing the failure of friends and former colleagues.

This view seems very popular among Virgin people at the moment. Not sure why. Perhaps it helps to justify the very hard sympathy line their PR mob are currently taking, with regards to full page adds and massive social media blitzes.

[Turnleft080]

If Virgin folds, the primary cause is their own management.
Make sure you put that correctly. Past management JB.

[wheels_down]

The concern is, even if they take a large loan of Canberra, how the heck will they ever get out of their debt situation?

It will take the rest of this decade to get rid all of the debt.

If they file for admin, who picks up the debt? Clearly have no assets to pay for much. It seems a lot of banks and lenders will be in the red but who pays for it?

[The Bullwinkle]

For all you "Angels" out there, Virgin was in the process of rectifying the atrocities of the last decade and were making many changes which were taking the company in the right direction.
Now, a "Black Swan" event comes along which threatens not just Virgin but indeed every airline in the world, your beloved QANTAS included, and all you want to do is kick a man when he's down.
I'm sure the Leprechaun is vey proud of your actions but you're actually quite disgusting!

[longjohn]

Neither Virgin OR Qantas should be given any more government assistance IMHO. Why should government prop up shareholders?

If Qantas is the last one standing, then so be it. If they price gouge, then by virtue of their margins they invite competition. Government can assist here by guaranteeing gates, slots tax concessions etc. They can also threaten / allow or even assist with cabotage. This was done post AN collapse with the likes of United operating Sydney - Melbourne. Qantas are terrified of cabotage, especially on the international front.

There are times when a monopoly is actually good. Government can regulate to protect consumers and the economy.

If Qantas fails, it will not be the end of the world. Again, foreign carriers can be asked to step up (US Airlines?) at least until such time as a new local airline emerges. No airline is too important to fail. In fact, the list of prominent failures is long.

Ansett’s collapse demonstrated, Australia’s second carrier simply does not feature. In fact, there will be some in Government and opposition actively pushing for a VA collapse. In AN’s case it was the Transport minister and the Prime Ministers Chief of Staff.

[SandyPalms]

You know what Bullwinkle. You’re an jerk. And one that’s incapable of reading at that. Good riddance.

[The Bullwinkle]

You know what Bullwinkle. You’re an jerk. And one that’s incapable of reading at that. Good riddance.
Says it all really.

[Toruk Macto]

What happens if Australia comes out of this first . American Airlines might be 6-12 months behind in recovery . Same for Asian countries . Government encourage Australians to holiday domestically . They need a airline industry that is ready to go now ! Not a start up . Not rely on international carriers . For $1.4B you got that airline , no state government subsidies , no airport freebies for the new guy no federal support for a brand new entrant . Just take the covers off and check the oil and kick the tyres and get those holiday makers into domestic resorts , get the country moving again ASAP ?

[The Bullwinkle]

no state government subsidies , no airport freebies for the new guy no federal support for a brand new entrant
And no preferential treatment from CASA.

[C441]

When Alan Joyce grounded Qantas back whenever, the first person to drop me a note was a Virgin friend who'd been through the dispute, an overseas stint with a very young family and then the collapse of Ansett. It was a kind, considerate thought from someone I've known for years but only catch up with occasionally.

Now once again the airline world is in turmoil and I think you'll find that, apart from a few posters here on Pprune (and on the whole that's not many QF staff), most Qantas people want to see the Virgin staff retain a job and an employer. Many of us have friends & family who are Virgin staff.

​​​​​​​The few on here that openly appear to want to see Virgin collapse are just that……a few.

[Dookie on Drums]

The few on here that openly appear to want to see Virgin collapse are just that……a few.

It's not about WANTING to see Virgin collapse. it's just inevitable. Poor management and losses throughout the years. What makes them any different from other companies doing it tough?

[The Bullwinkle]

It's not about WANTING to see Virgin collapse.
That's not what I understood from the "Survival of the fittest" comments.
Joyce has an absolute bloodlust for the collapse of Virgin!

[Dookie on Drums]

That's not what I understood from the "Survival of the fittest" comments.
Joyce has an absolute bloodlust for the collapse of Virgin!

Well, so what? It still doesn't dismiss the poor management over the years and I was there for it. What exactly would you like AJ or anyone to do?

[wondrousbitofrough]

It's not about WANTING to see Virgin collapse. it's just inevitable. Poor management and losses throughout the years. What makes them any different from other companies doing it tough?

I think that most reasonable minded people at VA would see the end result, whatever it may be, as being brought on by BOTH the poor previous financial management of the company AND the current media hatchet job being carried out by the senior management at Q.

I think the majority of people at VA don't bare any ill wishes to the people over at Q

[markontop]

And yet VA were the beneficiaries of the hatchet job done by the political arm of QF, Mr Anderson. Not forgetting the internal financial train wreck of AN.

[dontgive2FACs]

It's not about WANTING to see Virgin collapse. it's just inevitable. Poor management and losses throughout the years. What makes them any different from other companies doing it tough?

I don’t think anyone is intentionally wanting to see Virgin go into administration but yes, sadly perhaps it is inevitable. The cause probably doesn’t matter now. Perhaps some decisions would be made differently in hindsight. COVID-19 was most probably the catalyst.

Businesses will come and go with the economic cycle. There will be another carrier step in to replace them. It’s my hope that everyone who loses-out can be re-employed ASAP.

Again, it’s not the entity that matters. It’s the airlines employees and their families. Please reach out to your colleagues in the industry to share grief. Don’t take it out on your family. In their eyes, you’re a hero. Whether you fly for VA, QF, JQ and whatever Rex is (sorry I don’t know), your well-being beats the colour, size or shape of your aeroplane.

all the best.

[krismiler]

Any company going under has a knock on effect, you know what happens when the major employer in a small town goes broke, everyone is affected. It’s not just Virgin, it’s their maintenance providers, fuel and catering suppliers, advertising agency, IT system managers, accounts, landlords of their office buildings etc etc etc.

The country will be in survival mode for a long time to come. Vital sectors will need to be preserved to provide the framework to support the recovery. A skeleton critical mass needs to be kept in place to develop around.

There will be very little spare money as tax revenues will plummet and welfare demands will soar.

An airline industry is critical to Australia given its isolation and vast domestic distances. The bankruptcy of Sabena wasn’t critical to Belgium as there were no domestic flights and everywhere was easily accessible by road and rail. International destinations were served by other airlines flying into Belgium or easy connections through a multitude of nearby hubs such as Amsterdam or Paris.

Even the shortest routes of Australia’s economic golden triangle, Sydney/Melbourne/Brisbane have no practical alternative to flying and having large areas of the country cut off wouldn’t be acceptable.

My take is that there will be a small and highly conditional bail out of Virgin which would enable it to retain a limited domestic network on critical or previously profitable routes. Employee and fleet numbers will be slashed, international and wide body operations curtailed. Staff will be handed new contracts on a “take it or leave it” basis. The company will revert back to where it was around the time Ansett went under.

[Colonel_Klink]

What exactly would you like AJ or anyone to do?

Advocate for an industry wide package (akin to the US) to ensure that both airlines can get through this crisis in the interests of the aviation industry, the tourism industry and the economy more broadly.

[Dookie on Drums]

Advocate for an industry wide package (akin to the US) to ensure that both airlines can get through this crisis in the interests of the aviation industry, the tourism industry and the economy more broadly.

How nice. But one company has performed strongly and the other hasn't.

[The Bullwinkle]

Advocate for an industry wide package (akin to the US) to ensure that both airlines can get through this crisis in the interests of the aviation industry, the tourism industry and the economy more broadly.
Precisely.

[Dookie on Drums]

Precisely.

I just think you are clutching at straws here. The Government is not going to invest in a dying venture. If QF and VA were on an equal playing field then sure. The fact is VAH are a bad investment. Multiple losses over the years etc. What more do you want?

[Toruk Macto]

Aviation in Australia is akin to a blood sport , no doubt AJ is a rabid dog trying desperately to get at VA’s throat for the kill .

We not in a fair world , it’s more like a war footing where we put aside our normal competitive behaviour and do what’s best for the country .

The way VA has been managed, in normal times it may deserve to be left to fend for itself .
This is not normal times , the government need to do what’s best for the future not what’s right for now .

[TACQANAVIAVEC]

Agree. Another point to consider that the longer this goes it's almost assured both airlines would return as smaller versions of them selves meaning lay offs. Like you mentioned if both airlines were on an equal footing then bailing out VA would seem worth while in the interest of saving jobs however why should the bottom layer of QF's employees be laid off at the expense off keeping alive out chronically miss managed Airline owned mainly by three foreign carriers?

I say let its three foreign backers bail VA out and if it fails well there's probably going to be a lot of jobs in QF's and Jetstar and eventually another carrier will replace Virgin just as it replaced Ansett back in the days.

[Bug Smasher Smasher]

You guys seem to be missing the point(s).

1) No one (with a heart) at Qantas wants to see VA go under. It could very well be any one of us in that position and I can’t imagine any one of us would wish that situation on their worst enemy. As has been said, there are a very small few people on here who may think otherwise but I can guarantee they don’t speak for the rest of us.

2) Qantas as a business doesn’t want to see VA go under. Better the devil you know than the devil you don’t.

[das Uber Soldat]

For all you "Angels" out there, Virgin was in the process of rectifying the atrocities of the last decade and were making many changes which were taking the company in the right direction.
Now, a "Black Swan" event comes along which threatens not just Virgin but indeed every airline in the world, your beloved QANTAS included, and all you want to do is kick a man when he's down.
I'm sure the Leprechaun is vey proud of your actions but you're actually quite disgusting!
What are you on about. There is no 'kicking' old mate when he's down, but holding what he says to account. Its terrible whats happening to not just Virgin but the industry, but that doesn't give you licence to just say whatever you want without consequence.

The failure of Virgin, if it occurs, is not the fault of this Government. Far out.

And for all this braying about people on here who want to see Virgin fail, I haven't seen one yet. Care to provide example?

[RedClaw]

I love the fact that everyone has a crystal ball. I love the fact that we are in the middle of a health crisis that is causing the biggest economic reset in history, and all you can do is discuss how a company will collapse taking with it 1000s of people.

Yes JB spent a truckload of money, and yes the company has tried every strategy to compete with the competition, and yes it’s ok to take sides, you love VA or you love Qantas, Tiger, Jetstar or whoever... I hate the bulldogs,, but I don’t want their team to be taken out of the NRL comp because they go bankrupt, they provide for a good competition.

If you all think that Aviation as a whole does not need more cash through this... you are delusional, including Qantas the whole industry will need support now, in 3 months time, in 6 months time and most likely the next 2 years. The Australian economy will need affordable air services to recover. For the love of god, let the industry leaders and government sort this out, it is truly above your pay scale..

[Dookie on Drums]

You guys seem to be missing the point(s).

1) No one (with a heart) at Qantas wants to see VA go under. It could very well be any one of us in that position and I can’t imagine any one of us would wish that situation on their worst enemy. As has been said, there are a very small few people on here who may think otherwise but I can guarantee they don’t speak for the rest of us.

2) Qantas as a business doesn’t want to see VA go under. Better the devil you know than the devil you don’t.


Absolute rubbish. No one wants to see people lose their jobs. The rest is just business.

[The Bullwinkle]

The Government is not going to invest in a dying venture.
It could be argued that due to COVID-19, most airlines around the world are dying ventures and yet most other governments are supporting their nations airlines. Why should Virgin be any different?
This is not normal times , the government need to do what’s best for the future not what’s right for now.
Exactly. Everybody is well aware of how badly managed Virgin was over the previous decade, but that was being turned around and Joyce knows it was.
He is obviously afraid of the transformation at Virgin but taking advantage of a worldwide crisis to try and destroy a competitor, as well as the livelihoods of the employees is abhorrent and despicable, yet not surprising from someone of such limited moral fibre.

[crosscutter]

I think the less said the better..and this will be my last post on this thread.

It’s a sh*t spot. I wish everyone in Virgin the best, as I do the industry. Good luck to us all.

[Dookie on Drums]

It could be argued that due to COVID-19, most airlines around the world are dying ventures and yet most other governments are supporting their nations airlines. Why should Virgin be any different?.

Their past history. They have lost sh!tloads year after year. We have Qantas so that is supported and that is that.

[The Bullwinkle]

Their past history. They have lost sh!tloads year after year. We have Qantas so that is supported and that is that.
Can’t get over the past can you.

[Fatguyinalittlecoat]

VA don't deserve saving anymore than any other business. COVID or not. It may not feel it, but it's not personal.
I don't want to see VA fail. That would mean restarting the fight against "crap money, pay for your training" type operators again. That's no fun. We all wish you the best if luck.

[Dookie on Drums]

Can’t get over the past can you.

I can but I am not blinded by it like you apparently are

[The Bullwinkle]

and that is that.

https://getyarn.io/yarn-clip/46953329-18d8-4840-bab8-bff561be2f0d

[TACQANAVIAVEC]

People don't consider Joyce objective is purely in the interest of his business performance and by de-facto those employees that will have to be laid off when flying eventually resumes?. I'm sure most at QF don't wish their colleagues at VA to be out of work but would also side on wanting to keep as many of their lot with a job to return too.

The equation is simple: VA goes down = All of QF's employees very likely come back and many at VA's are employed at QF' and JQ just as it did happen after Ansett's collapse. Again I don't imply Joyce is doing it out of the kindness of his heart but purely as a business leader looking out for the performance of his business under very difficult and unique circumstances.

[wheels_down]

They can’t cede their 35% Corporate Market share if they go back to 2001, because they will go back to 5%, and are fighting against Jetstar. They did not have a competitor with 60 aircraft back then, because that was them.

The corp revenue is key going forward. It’s also a key driver in Velocity, and it’s 200m earnings.

Its just unnecessary overheads that exist that is the issue, the Airbus and it’s SH International network. It’s no trade secret that he is aware of this, and it’s certainly no secret that in his first year his intentions are clearly on this.

Three crew bases will pull enormous cost out. Kiwi flying will be obviously cut or to a basic point to point. I wouldn’t bother with Japan but the partnership could remain. Tiger is clearly done, so more cost gone. ATR program gone. All contracts and leases have just been negotiated. Forget Bali. Forget Pacific Islands. That’s a large chunk of expenditure gone.

The MAX order is clearly going to be shelved until late this decade.

737 can do Canberra. Inefficient, yes, but still ahead once the ATR overheads removed.

*60-70 737s
*4/5 Triples

Dive into their past results, you can really see the issues lie around International and a Fleet complexity.

[Icarus2001]

Tiger is clearly done, No from what PS has said. The pilots have been made redundant but not the cabin crew. The Tiger airframes will be flown by VA pilots, that is the plan. Not sure about the A320s though. VARA 320 pilots?

[Chris2303]

Why are people suggesting cabotage?

All it does is adds extra costs for little revenue, and the problem of getting domestic pax through the international terminal. It also ruins connections at (say) Sydney.

I can't see UA or AA rushing to recommence South Pacific flying either

[TACQANAVIAVEC]

I think you'll find most of QF's drivers here are those who likely find them selves at the bottom of the barrel and thus the ones in the firing line when flying eventually resumes at a smaller scale.

People here seem to forget that theres another side of the story with real people, family and commitments at stake who, should VA be spared with tax payers money will literally mean sacrificing those at the bottom of the barrel across QF and their subsidiaries at the expense of saving a badly managed business.

I don't wish my colleagues at VA to be out of work but I also side with those colleagues of mine at QF who are staring at possibly not having a job to come back too. History shows many at VA's would be needed at QF and JQ to fill the void left behind and eventually another airlines would rise from the ashes to provide further employment.

[DanV2]

Why are people suggesting cabotage?

All it does is adds extra costs for little revenue, and the problem of getting domestic pax through the international terminal. It also ruins connections at (say) Sydney.

I can't see UA or AA rushing to recommence South Pacific flying either

Considering UA was pulling out of SYD-LAX during the NS months and reducing those services to NW seasonal before the pandemic hit. UA's pull out on SYD-LAX would leave a little wriggle room for QF/AA and perhaps DL/VA should the later joint-venture group return to TransPacific flying when this subsides (and if VA survives in a smaller form for that matter).

[Ichiban]

Obviously a bit US-centric to US laws, but still interesting from an airline business perspective.

Joshua D. Rauh is a senior fellow at the Hoover Institution and Ormond Family Professor of Finance at the Stanford Graduate School of Business.

https://www-chicagotribune-com.cdn.ampproject.org/c/s/www.chicagotribune.com/opinion/commentary/ct-opinion-coronavirus-airlines-bailout-congress-bankruptcy-20200326-dfzermiffrc5nfiyldeboygszy-story.html?outputType=amp

[AerialPerspective]

[QUOTE=Gnadenburg;10736457]Having gone through the Ansett demise and a period of unemployment, the government did a good job with helping ensure the payment of owed wages and benefits. The tax liability was small and I ended up with far more cash in hand than expected.

If I recall correctly, you guys got your "owed wages and benefits' as as an enforced levy on air tickets from a blackmailed flying public, a disgraceful sham.

Yes, every cent of which was paid BACK to the Commonwealth before the final entitlements were paid and NO, the total owed wages and benefits were not paid, given most got around 93% and I guess with each successive payment being treated as a separate ETP, probably came out roughly square.

The reason that was done is because, along with a litany of company problems, the dumb government that was there when the axe fell had some modicum of responsibility for having given FIRB approval to the sale of the final 50% to Air NZ, the same Treasurer and PM who bailed out the PM's brother's company a few years earlier, the same Treasurer who gave FIRB approval to APA to take over Qantas, a takeover that ultimately failed and so did APA several months earlier. Thanks to these idiots, Qantas would have went with it. Qantas was indeed lucky that one single shareholder held out and told APA to get stuffed as he held the balance of shares and knew they were just there to skin it, empty it's bank accounts and throw away the carcass. Mr bloody Costello, Keating was right when he said Costello was the laziest treasurer in history and a low altitude flyer. If FIRB exists to protect the national interest, why would this moron give approval for two major airlines when billy the blind man's dog could see it was not in 'the national interest'.

[AerialPerspective]

Any company going under has a knock on effect, you know what happens when the major employer in a small town goes broke, everyone is affected. It’s not just Virgin, it’s their maintenance providers, fuel and catering suppliers, advertising agency, IT system managers, accounts, landlords of their office buildings etc etc etc.

The country will be in survival mode for a long time to come. Vital sectors will need to be preserved to provide the framework to support the recovery. A skeleton critical mass needs to be kept in place to develop around.

There will be very little spare money as tax revenues will plummet and welfare demands will soar.

An airline industry is critical to Australia given its isolation and vast domestic distances. The bankruptcy of Sabena wasn’t critical to Belgium as there were no domestic flights and everywhere was easily accessible by road and rail. International destinations were served by other airlines flying into Belgium or easy connections through a multitude of nearby hubs such as Amsterdam or Paris.

Even the shortest routes of Australia’s economic golden triangle, Sydney/Melbourne/Brisbane have no practical alternative to flying and having large areas of the country cut off wouldn’t be acceptable.

My take is that there will be a small and highly conditional bail out of Virgin which would enable it to retain a limited domestic network on critical or previously profitable routes. Employee and fleet numbers will be slashed, international and wide body operations curtailed. Staff will be handed new contracts on a “take it or leave it” basis. The company will revert back to where it was around the time Ansett went under.
Actually, it won't revert back, it will either revert or it will go back, but not 'revert back'. That's the same as saying 'return back' instead of return or go back, it's a tautology.
As for the remainder of the comment, I think your probably quite right.

[AerialPerspective]

Why are people suggesting cabotage?

All it does is adds extra costs for little revenue, and the problem of getting domestic pax through the international terminal. It also ruins connections at (say) Sydney.

I can't see UA or AA rushing to recommence South Pacific flying either
Exactly. The comment was in fact pretty uninformed, the 'cabotage' was actually SQ, AC, NZ and others operating on behalf of AN. This occurred also during the 767 grounding, with coming to work in the morning to see two 767s on Gates 31 and 33 in Sydney, one AC and the other NZ.
The post collapse effort was only temporary until QF leased a few ex AN leased aircraft and ramped up.
The original idea was for AN Pilots and Crew to operate a wet lease with QF flight number, using AN equipment of course, but who stopped that? Unions, who insisted it operate from AN terminals so the AN ground staff could check it in and load it, logistically dumb considering they would all have to have been trained by QF to use the QF system(s), albeit similar to AN's and ticketing, etc. So, a lifeline of sorts was offered and the opportunity for some pilots and cc to continue working lost because of shortsighted unions.
AN's 'genius' HR department also threatened anyone who actually took a job with QF temporarily would be considered to have resigned because they had taken a job with a competitor and would thus not be entitled to redundancy. When that was said, any respect left for the company dissipated for quite a few.

[itsnotthatbloodyhard]

Actually, it won't revert back, it will either revert or it will go back, but not 'revert back'. That's the same as saying 'return back' instead of return or go back, it's a tautology.
As for the remainder of the comment, I think your you’re probably quite right.

Not a tautology, at least. :ok:

[TimmyTee]

Imagine how short this thread would be if we had a way of turning off all the "expert financial analysis" comments made by current and former Qantas employees...
(could probably mop up a few of the remaining comments if we also could exclude QF shareholders)

[TBM-Legend]

Propping up failing businesses is a road to nowhere. Please look at the Australian car manufacturing industry and the outcome of hundreds of millions spent on them. VA losses are gigantic by any measure. They can not keep using a credit card to survive. Sooner or later you reach the limit and then in their case demand another card...

There will be another airline in Australia. Upgrade Alliances AOC and put some B737's on it and voila..[QF sells their bit in this case]

[Paragraph377]

[QUOTE=deja vu;10737875]

Yes, every cent of which was paid BACK to the Commonwealth before the final entitlements were paid and NO, the total owed wages and benefits were not paid, given most got around 93% and I guess with each successive payment being treated as a separate ETP, probably came out roughly square.

The reason that was done is because, along with a litany of company problems, the dumb government that was there when the axe fell had some modicum of responsibility for having given FIRB approval to the sale of the final 50% to Air NZ, the same Treasurer and PM who bailed out the PM's brother's company a few years earlier, the same Treasurer who gave FIRB approval to APA to take over Qantas, a takeover that ultimately failed and so did APA several months earlier. Thanks to these idiots, Qantas would have went with it. Qantas was indeed lucky that one single shareholder held out and told APA to get stuffed as he held the balance of shares and knew they were just there to skin it, empty it's bank accounts and throw away the carcass. Mr bloody Costello, Keating was right when he said Costello was the laziest treasurer in history and a low altitude flyer. If FIRB exists to protect the national interest, why would this moron give approval for two major airlines when billy the blind man's dog could see it was not in 'the national interest'.Oh yes, Peter Costello, the man who took his eye off the ball for several years while being consumed with his lust for Howard’s job. The same jerk that authorised the sale of Australia’s 167 tonnes of gold in 1997, in a sale timed to suppress the price of gold, to bury it forever, and replace it with government paper. Gotta love that fiat money hey Pete, you can just keep printing off more!!! He sold it at market price (fool) and it was around $400 per ounce back then. We lost at least $5b on that deal, in today’s value even more.

[Berealgetreal]

The word is an Asian LCC into The Virgin space.


Though I think Alliance would do a great job of it personally.

[galdian]

Has anyone asked Alliance if they woulds want to play in the ****fight that Australian RPT ops have become?

Maybe they're happy just doing what they do in their little niche, making profits along the way?

Equally if VA went bust how much of a hit to the Alliance balance sheet for services provided but (probably) income never received?

Not saying they couldn't make a go of it....but why bother?

Cheers

[markontop]

Asian LCC?
Great provided CASA acts without fear of favour.
Or professionally without political(that’s you QF) influence.

[krismiler]

A while back there was talk of Indonesia's Lion Air starting a subsidiary in Australia. Before everyone falls about laughing we would be looking at Australian registered aircraft, on an Australian AOC, flown by Australian licensed pilots with CASA oversight.

[longjohn]

Imagine how short this thread would be if we had a way of turning off all the "expert financial analysis" comments made by current and former Qantas employees...
(could probably mop up a few of the remaining comments if we also could exclude QF shareholders)

Timmy - are you suggesting that despite being taxpayers, those having any involvement with QF should forfeit their say on how their tax dollars are spent on matters pertaining to VAH?

With due respect, bias, so long as its recognised, does not invalidate an argument.

[Berealgetreal]

I reckon a new operator would just pick the low hanging fruit ie triangle and capital cities.

Regional ports will be Qf Group and the rest. The days of having multiple jet services at a regional port not making a dollar are coming to an end.

[PoppaJo]

Due to large oversupply of flight crew for the rest of this decade, Air Asia and Lion would be able to get away with paying Right Seat 80k and Left Seat 150k. Those numbers are being generous also. They contract the entire ground crew, and the cabin crew to third party operators. They already have the large scale low priced Jet orders coming.

[Icarus2001]

be able to get away with paying Right Seat 80k and Left Seat 150k.

If VA shuts down, in six months time pilots will be lining up for a job with those numbers.

[krismiler]

When we eventually get back to work again, I reckon we'd be lucky to be on 75% of our previous incomes, and that's for those fortunate enough to have a job. Even airlines which were profitable and had substantial cash reserves are being hammered, there are very few which won't need a bail out or some form of rescue package, and the list gets shorter everyday this goes on.

Any government support will come with a long list of conditions, one of which will certainly be a "realistic" wage deal with the employees. There will be very little sympathy for someone previously on $250 000 a year having their pay cut to $180 000 when millions of people are out of work. Anyone such as baggage handlers and flight attendants in QF whose pay and conditions are substantially higher than those in similar jobs, simply because it's Qantas, will see their pay brought back to rates comparable to what other Australians doing the same work will be getting.

Very few sectors will have any bargaining power with their employers except for example dockers, police and emergency services.

There will be little scope for enterprise bargaining until the industry is back on its feet again which will take years. There are very few of us who will be back at work on our old terms and conditions, I was going to say current terms and conditions but with so many redundancies, lay offs and groundings the contract you have at the moment is past tense.

One upside is that everyone is in the same boat and the financial institutions know it, so renegotiating current loans to a longer term at a lower interest rate will be relatively easy. Also prices will fall so anyone who's reasonably cashed up will be able to pick up a few bargains.

[Lapon]

I was going to say current terms and conditions but with so many redundancies, lay offs and groundings the contract you have at the moment is past tense.

If your airline survives and you keep your job your contract is not going to change.
Pilot wages and conditions in this part of the world have rarely been dictated by supply and demand.

[PoppaJo]

The guys in Singapore, Vietnam or Japan won’t have choice. No Union No Choice.

Jetstar Asia will probably slash Pilot Remuneration considerably. Expect 10 or 20% cuts. Tiger Singapore did this about a decade ago, didn’t go down well, but the industry didn’t crash, just high fuel prices. As the market was relatively stable and big twin jobs were available, they lost half the captains almost instantly.

Back then, you cut pilot wages and everyone walked and went to Qatar or Emirates. Management will be well aware that there isn’t many jobs for those to escape to now, so the wider group will just have to suck it up.

I have been talking to many who say they hope their company will ask for Voluntary Redundancies, as they are 2-3 years away from retiring, but it’s going to be a slow and miserable last few years of the career, so take the cash and run.

Obviously they can’t chop and change current agreements here as such, but I imagine it would be more culling, than attempting to change conditions. Eg. Jetstar entire 787 fleet parked, sold and pilots made redundant. The long haul leisure market is the pain point, Air Asia X is probably finished. They could barely pay their leases last month according to some reports. Scoot will be the long term survivor, although I might be nervous if I was on the 787 there.

[B772]

It appears any pilots that have been working outside of Aust and released to return home may be in for an extended stay on our shores regardless of who they worked for. One friend at 56 years of age who went to China 4 years ago is concerned he may have operated his last flight.

[ECAMACTIONSCOMPLETE]

https://mumbrella.com.au/virgin-australia-kicks-off-campaign-against-monopoly-in-australian-skies-623773

Full page ads in the paper today.

[Brakerider]

https://mumbrella.com.au/virgin-australia-kicks-off-campaign-against-monopoly-in-australian-skies-623773

Full page ads in the paper today.

What a waste of money. Money that could be better spent paying staff the entitlements they deserve.

[Rashid Bacon]

QF does indeed need a challenger - it just may not be Virgin.

Would the Australian government be quietly sounding out with other parties the possibility of another startup if VAH is unable to continue trading.

It's pretty clear at this stage anyway, that there is little appetite for a commercial bailout of a single operator.

[Lookleft]

They must be getting desperate They will discover what most of us who work in aviation already know, that the public really don't care about aviation especially at this time when no-one is flying anyway. I once heard the statement "The Australian public will demand their union pilots in the flightdeck" Turned out they couldn't care less then and they will care even less now. .

[altocu]

"Danielle Keighery, Virgin Australia’s chief experience officer"...

There's part of the problem right there and not just at VA either.

[chookcooker]

https://mumbrella.com.au/virgin-australia-kicks-off-campaign-against-monopoly-in-australian-skies-623773

Full page ads in the paper today.

wow,
mumbrella.com!!

a news outlet that, on the scale of Wall Street journal to my woolies receipt, sits a lot closer to the latter than the former

[Led Zeppelin]

Virgin will not be very high on people’s priorities as they come to terms with massive job losses and a deep recession a real possibility.

What a waste of money.

[normanton]

Advertising when there is no flying, and they are short of money. Disaster. They need some administrators in there to save what they can of it.

[krismiler]

If your airline survives and you keep your job your contract is not going to change.

You'll simply be handed another contract for your employment with the "new entity" airline which your old one becomes. As fewer pilots will be required employment will probably be offered based on seniority and they will simply move down the list if anyone refuses to sign. Unlike 1989, there won't be many opportunities available overseas, in fact Australian pilots will be forced to return home instead as foreign employers look after their own citizens first.

Pilot wages and conditions in this part of the world have rarely been dictated by supply and demand.

Wages have been kept high by the unions who will have little ability to dictate terms if airlines are nationalised under an emergency rescue plan. Public sympathy won't be forthcoming for "over paid bus drivers who only work twenty hours a week" when millions will be living hand to mouth on welfare. Realistically, if and when we return to work I wouldn't expect to be pulling in much more than about 75% of my previous income for quite a long time.

Major cost cutting will be the order of the day in all sectors of the economy, long haul flights and premium cabins will be the most affected for the airlines. There could be a possibility of Jetstar/Scoot B787s completely replacing the parent company's aircraft on certain routes which become unviable for the full service product, however at the moment you're far more secure on an A320/B737 which are much easier to fill and cost less to operate. Today's generation of narrow bodies are far more capable than those of previous years and could replace A330/B787s on many routes if the pax numbers aren't there. Airlines such as CX and SIA which are geared towards the premium end of the market will need to slash costs in a new era were price rather than service will be the deciding factor when buying a ticket.

The GA sector has been decimated so even a C402 job won't be an option.

[SOPS]

I’m starting to smell desperation.

[TimmyTee]

With due respect, bias, so long as its recognised, does not invalidate an argument.

Hahahaha, really?
Alright, hands up if you are a Qantas driver/employee!

[Rashid Bacon]

Maybe the Chief Experience Officer needs to get a bit more experience before committing to such an expensive advertising flop. What a meaningless title.

Yes - Part of the problem at Virgin and elsewhere

[2020Balance]

Only after they have paid us at tiger and VAINZ our redundancies. PS, SA, MF and all those top end bottom feeding grubs can line up behind the rest of us on the dole queue.

[B772]

Paying for advertising to sway a decision is just a waste of money and effort. Another example of either the Virgin mindset or lack of business acumen by Paul Scurrah.

[Paragraph377]

Maybe the Chief Experience Officer needs to get a bit more experience before committing to such an expensive advertising flop. What a meaningless title.

Yes - Part of the problem at Virgin and elsewhere

Almost as stupid as the title ‘specialist’. Safety specialist, Training specialist, Market, Brand and Research specialist, Alliance specialist and so the nauseating list went on.......
What a load of fluffy wank and one of the reason they were in the **** financially - too many overrated, unnecessary or excess positions that did SFA. The Viallge Idiots and executive tossers fostered this stupid culture where mates were rewarded with ‘specialist’ roles and titles and paid to do jobs that were not necessary for the organisation. Far too many layers at VA.

[Rabbitwear]

I think Air NZ will step into domestic Australia as they will have idle Aircraft and crew ready to go especially whilst International is off limits.

[Ragnor]

I think Air NZ will step into domestic Australia as they will have idle Aircraft and crew ready to go especially whilst International is off limits.

Air NZ are looking at redundancy already, don’t think OZ domestic is in their sights yet! If we are not back flying by June, Australia could very well be served by QF and JQ domestically for a while.

[neville_nobody]

Wages have been kept high by the unions who will have little ability to dictate terms if airlines are nationalised under an emergency rescue plan. Public sympathy won't be forthcoming for "over paid bus drivers who only work twenty hours a week" when millions will be living hand to mouth on welfare. Realistically, if and when we return to work I wouldn't expect to be pulling in much more than about 75% of my previous income for quite a long time.


I'd argue that Unions have actually kept wages down in this country through the seniority system. If you had a true theoretical open market on pilot's labour (which includes no collusion between airlines, or backroom deals between Regionals and major airlines) in the last 10 years then you would have had much higher salaries at Virgin and Jetstar and Rex. The fact that people were going overseas and doubling to tripling their salaries would indicate where the real market was at. Not to mention people moving to the USA to fly for Regionals.

However now without Union interference you would also have a much lower average salary. Especially so if VA go broke then you will have all the ex VA pilots, all the returned expats competing for very few jobs. I would argue that pilot unions have probably dampened the swings in the pure open market salary rather than increased them

[markontop]

There you go playing with other people’s money.
Virgin flare!
How’s that turnaround restructure working - children?

[unexplained blip]

ANZ have already demonstrated an interest in this particular market. The reality won't be revealed for a while yet. They smart enough to say nothing, do nothing, until if and when VA dissolves. The debt is not tasty.

[Lapon]

You'll simply be handed another contract for your employment with the "new entity" airline which your old one becomes

If your airline survives and you hold onto your job you merely go back to onto your existing contract.

I dont think merely closing a solvent airline and making your employees redundant in order to re birth itself as doing the same thing with reduced T&Cs is that easy in this part of the world.

If it was Qantas would have already jumped at the opportunity during its 'terminal decline', or Air NZ after they went under following Ansett/9-11

[Lapon]

ANZ have already demonstrated an interest in this particular market. The reality won't be revealed for a while yet. They smart enough to say nothing, do nothing, until if and when VA dissolves.

They have demonstrated an interest three times in as many decades, and each failed. They are smart enough to say nothing, do nothing and leave it that. They have just been bailed out again are making redundancies. Any desire for a fourth attempt will be tempered by the means to do so.

I would rather see VA continue and return as a simpler version of itself, which is where I think they were trying to head under thier new leadership.

[markontop]

Solvent? That’s to be determined.
Also you cannot take a company dissolve it restart etc. It’s called phoenixing. If it worked everyone would be doing it.

[B772]

Air New Zealand will dip their toe in the water with PER-MEL-AKL and v.v or similar.

[Berealgetreal]

Due to large oversupply of flight crew for the rest of this decade, Air Asia and Lion would be able to get away with paying Right Seat 80k and Left Seat 150k. Those numbers are being generous also. They contract the entire ground crew, and the cabin crew to third party operators. They already have the large scale low priced Jet orders coming.

Spot on. Would make working at Jq look like a tropical holiday.

[Progress Wanchai]

You must be pretty confident the situation will resolve pretty shortly. What if it drags out and starts eating away at the QF reserves.

The government had all the information to close the borders and fumbled there way to where we are today.

You’re happy with the actions of the government?

What I can’t get my head around is front line QF staff wishing the failure of friends and former colleagues.

This raises the very issue. Qantas is undoubtably in financial trouble just as every airline is. Without question if the government nationalizes VA, then it will definitely nationalize a failing Qantas. Then what? A conservative government owns the only two airlines in the country all in the name of competition? Neither of which are operating at 100% capacity and neither are commercially attractive to investors.

The logical option in such a scenario is do what NZ did to Ansett and wash the taxpayers hands of the debt laden entity, while restructuring the major airline.

Then there’s the issue of supporting the tourism industry. The domestic tourism industry produces no income, it simply transfers money from one region to another. So Victorians stop surfing in Queensland. And Queenslanders stop seeing the fairy penguins. What eventually happens is people spend less money by staying in their own backyard and saving, which is eventually what the most personally indebted people on planet earth were going to have to do one day.
And that’s being kind. By paying the fuel suppliers, aircraft makers, etc a lot of money leaves Australia’s shores to support a domestic tourism sector.

As for international tourism, it’s debatable whether Australia is a net importer or exporter of the tourism dollar. Most first world countries export tourism while third world countries import dollars from it. The exception being NZ which definitely imports more tourist dollars than it exports, hence the NZ government’s constant support of its national carrier.

[Slezy9]

They have demonstrated an interest three times in as many decades, and each failed. They are smart enough to say nothing, do nothing and leave it that. They have just been bailed out again are making redundancies. Any desire for a fourth attempt will be tempered by the means to do so.

Air NZ have not been bailed out, the government have offered a loan, which as of today they have not taken.

[Berealgetreal]

How about the government stops pretending it knows the outcome or knows better on everything. Their arrogance is incredible.

The beauty of being an island is that we had the answers to the test before it started yet, they still pretended they didn’t. Breathtaking arrogance. Anyone watch four corners coronavirus episode? It shows Lewis Hamilton talking in a press conference for the Formula 1 in Melbourne where he says something along the lines of “I just can’t believe we are still sitting here doing this”. Or even better, the comments from the non government doctors interviewed.

Regardless of which uniform you wear, your government didn’t perform and have now left all of us with our arses hanging out when it could have been so different.

Government and business has been more than happy to have its snout in the aviation trough for decades, maybe the wheel can turn for a year or so while Airlines get through the period.

Italy, after a terrible start have locked down 60 million people and it’s showing some early results. Having said that, there is already talk of relaxing the measures as the citizens are growing tired of the restrictions. I hope it doesn’t lead to round two for them. I also noted yesterday, the Chinese leaders wearing face masks despite saying its all fixed. Yeah right.

The sad truth is that it only takes one infected person to enter a country that has “solved” the problem to start it all over again. Times have changed, until there is a vaccine. Even with a vaccine it takes time to distribute it and then there is the issue of either Antivax or inability or lack of carefactor to access the vax. I think International travel could be the ultimate victim of the virus.

What isn’t widely known is that in some cases a recovery isn’t really a recovery. Patients live but are left with scarring and reduced lung function for life. That’s one has been kept quiet along with the percentages of young in ICU.

[Dragun]

Solvent? That’s to be determined.
Also you cannot take a company dissolve it restart etc. It’s called phoenixing. If it worked everyone would be doing it.

Incorrect. Not all phoenixing is illegal, in fact it's a perfectly legal practice depending on the circumstance.

https://asic.gov.au/for-business/small-business/closing-a-small-business/illegal-phoenix-activity/

See half way down that page.

[markontop]

Fair enough.
However your position on other people’s money? Correct or incorrect?

[anawanahuanana]

I don't know why people are talking about the government nationalising VA. They have asked for a loan. You're blind if you can see the game QF are playing. It's exactly the same one British Airways are playing. Talk up the fact you don't need a govt loan. After all, the government can't pick winners and losers in this can they? Let your competition fold. Then go cap in hand to the govt for a bailout. They're now the only major airline left in the country. You think the govt won't then have to help them financially? And just like that, they've played the govt to pick a winner and a loser.

I fully agree that the way VA has been managed in the past (by JB et al) is utterly atrocious. However I really do feel like PS was taking the airline down the path it needed to travel to turn things around. The situation should be judged on how things are now, not the past. Otherwise we should refuse recently unemployed people the dole if they have made poor choices in their past lives, regardless of what changes they have since made. "Sorry madam. I know you've been working hard to pay off the debts you accumulated during your previous relationship with your abusive partner. We understand that you have become unemployed due to covid-19, through no fault of your own. But your ex built the debt in your name so why should the govt help you out? Best you file for bankruptcy..."

As for people moaning about govt bailout money being sent overseas to the foreign airline owners of VA. Well bearing in mind for the last however many years a load of foreign airline money has been invested in VA which has then flowed in to 10,000 Australian taxpayers and countless other suppliers to VA, hotels, car hire companies etc etc, all for no return to them, I don't think that argument holds much water.

The govt should offer VA a loan, with the option to take a stake in the company if not repaid as required.

[krismiler]

Whilst I'm definitely not an expert on company insolvency, once an administrator is appointed all debts are put on hold and a creditors committee is formed. Those who are owed money get to decide if the company is wound up or if they will accept settlement of their accounts at X cents on the dollar and the business continues, usually in a restructured form. If the financial difficulties were the result of a one off event and the company is otherwise viable this might be acceptable to all concerned especially if future business would be important eg Boeing, whilst not in administration have their suppliers working with them as they simply can't afford an important customer to go broke. If there is little chance of the business returning to profitability then it gets wound up and creditors are paid out usually at a loss, from the proceeds of asset sales and anything in the bank.

Virgin have stopped the transfer of Velocity frequent flyer points to Singapore Airlines Kris miles and limited their use for purchase of gift cards to one per day. Those with longer memories might recall that Ansett Golden Wing members lost points worth around $700 million when the airline collapsed. It's similar to the foreign exchange market when traders get out of what they perceive as risky currencies and go for safe havens. Kris miles give access to the entire Star Alliance network and SIA are in receipt of a government bail out.

https://www.executivetraveller.com/news/virgin-velocity-transfers-to-singapore-airlines-suspended

Virgin Australia has slammed on the brakes for Velocity Frequent Flyer members trying to transfer their points into the KrisFlyer scheme (https://www.executivetraveller.com/how-to-convert-your-velocity-points-to-krisflyer-miles) of partner Singapore Airlines.

Until earlier today, the partnership between Virgin and the Singaporean flag-carrier allowed the frequent flyer points of one airline to be converted into those of another, under an innovative arrangement launched in 2014.

However, the Points Transfer page on the Velocity website now carries a notice at "Velocity Frequent Flyer and Singapore KrisFlyer are temporarily suspending conversion of Points and Miles between the two programs. We're looking forward to providing you with this program feature once flight schedules return to normal."

The transfer facility opened the door for Virgin customers to obtain points-based award bookings and flight upgrades not only with Singapore Airlines but right across the Star Alliance with premium partners such as ANA, Lufthansa, Swiss and Thai Airways.

However, recent speculation on the fate of Virgin should the coronavirus crisis extend beyond six months may have sparked a rush to convert the airline's Velocity points to the perceived safer haven of Singapore Airlines.Gift card transfers also limitedLess than 24 hours ago, Virgin clamped down (https://www.executivetraveller.com/news/virgin-australia-limits-velocity-point-gift-cards) on using Velocity points to purchase a gift card valid at major retail outlets, imposing a limit of one gift card per day.

The gift cards sell for between 3,000 and 35,000 Velocity points, with a redemption value of between $10 and $200 across some two dozen partners including Apple, David Jones, Dymocks, Endota Spa, JB Hi-Fi, The Iconic, Rebel Sports, Ticketmaster and Westfield shopping centres.

While gift cards don't represent the best value for Velocity points, they retain their value for upwards of a year and can be used to purchase goods on sale, which can increase the effective overall value of the Velocity points used to buy the card.A six-month deadline?Earlier this week, Virgin Australia confirmed it has approached the Federal Government for a $1.4 billion bailout in order to survive a prolonged coronavirus grounding.

The airline is said to have sufficient cash at hand to weather up to six months in the current COVID-19 lockdown scenario, which has gutted the travel market, with Virgin Australia CEO Paul Scurrah saying the airline was asking for "temporary support, not a handout."

"We want to work with government on how best to design this but it will be a repayable loan," he told ABC Radio. It's reported that if the airline was unable to repay the loan in full within two to three years, the government would take an equity stake in the company.

However, Deputy Prime Minister and Transport Minister Michael McCormack maintains Virgin Australia will not receive any special treatment.

"Whatever we do for Virgin we are going to have to do for other companies as well. We can’t just pick and select individuals and winners out of this," McCormack said, adding that Virgin should consider raising capital from its existing shareholders, which includes Singapore Airlines and Etihad Airways.

[Dragun]

I would say that post Carona there will be no need for the capacity from pre Carona from even one airline.
QF will have way more aeroplanes than the market needs.
Other people’s money;
Creditors (please help, national interest, keeping the air fair- twenty years old now)
Tax payers (that would be Airnav charges)
Staff (leave without pay, that would be yours)
Playing would be the newspaper ads.
Finally do VA have the money to last for how long?

Sorry mate, totally missed this reply. Thanks for clarifying. I do somewhat understand the thinking in a roundabout way but in reality, engaging with any business as either a consumer, employer or creditor, you're taking a risk they won't collapse before the service is provided. For example, when you purchase a ticket to a football game, you assume the institution will be viable by the time the date of the game comes around. As a creditor, generally you provide a product or service and send an invoice for post-payment. Obviously there are plenty of examples like this as essentially all businesses work this way, even in the very short term (pay for a property report online and hope it lands in your inbox within 5 min for example). If this is playing with other people's money, then yes, sure. However, I think it's fair to say that it's the way free market capitalism works overall. We would have a very different system if it didn't.

I'd like to make another point for those reading and citing Virgin's losses over X amount of years as a reason not to bail them out. For essentially any business to grow, it's very hard not to operate at a loss during this growth - it's common, almost necessary and well accepted. This is why loss making businesses have value and why people continue to invest in loss making businesses (contrary to those asking why would anyone do it). This is because provided revenue is increasing, the business will reach a point where it transitions. This was happening at VA right before this mess and here are the numbers to demonstrate why:

1. Qantas - since 2008 on a total revenue of $168b, with a profit of $2.1b The dominant market player, over the twice the size of VA). Revenue since 2008 has increased by 15%
2. In the same period, VA has grown revenue by 135%.

The reality is that QF has barely grown while VA has had massive growth and I can tell you first hand that growth of a business costs money, and lots of it! Successfully managing the transition from growth to stabilization (breaking even then turning a profit) is where the management comes in and what PS was well on his way to doing this. Once again, very normal and generally part of a plan. Has VA perfectly managed the situation and made all the right moves and decisions? Probably not! However for anyone reading their balance sheets watching the cash balance steadily increase and observing the statutory vs underlying figures, it was reasonably clear on why the shareholders were not kicking up a big fuss.

[Buster Hyman]

"Danielle Keighery, Virgin Australia’s chief experience officer"...

There's part of the problem right there and not just at VA either.
Ahh, but when she writes her resume', she can put down CEO at Virgin Australia! :ok:

[longjohn]

This was happening at VA right before this mess and here are the numbers to demonstrate why:

1. Qantas - since 2008 on a total revenue of $168b, with a profit of $2.1b The dominant market player, over the twice the size of VA). Revenue since 2008 has increased by 15%
2. In the same period, VA has grown revenue by 135%.

The reality is that QF has barely grown while VA has had massive growth and I can tell you first hand that growth of a business costs money, and lots of it! Successfully managing the transition from growth to stabilization (breaking even then turning a profit) is where the management comes in and what PS was well on his way to doing this. Once again, very normal and generally part of a plan. Has VA perfectly managed the situation and made all the right moves and decisions? Probably not! However for anyone reading their balance sheets watching the cash balance steadily increase and observing the statutory vs underlying figures, it was reasonably clear on why the shareholders were not kicking up a big fuss.

I see this from a quite different perspective.

VA, initially under BG and then accelerated under JB, has bought market share. Yes, you are correct, it costs a lot of money to buy market share.

Meanwhile, whilst VAH were booking massive losses as they bought market share (especially premium / corporate), QF were still maintaining profitability (FY13 excepted).

Clearly this strategy has failed.

Why should the Australian taxpayer fund VA’s failure?

[Lapon]

I see this from a quite different perspective.

VA, initially under BG and then accelerated under JB, has bought market share. Yes, you are correct, it costs a lot of money to buy market share.

Meanwhile, whilst VAH were booking massive losses as they bought market share (especially premium / corporate), QF were still maintaining profitability (FY13 excepted).

Clearly this strategy has failed.

Why should the Australian taxpayer fund VA’s failure?

That depends whether you consider the $1.4B to be a funding of thier past failures, or funding of thier future prospects.
The past is in past, and I believe their future prospects were comparatively bright before the the goverment enforced lockdowns.

Why should the taxpayer fund a bailout? Because they will benefit more than it will cost (individual opinions will vary).

[ECAMACTIONSCOMPLETE]

Ahh, but when she writes her resume', she can put down CEO at Virgin Australia! :ok:

would you really want CEO of Virgin Australia on your resume? Nothing to be too proud of about that

[Buster Hyman]

would you really want CEO of Virgin Australia on your resume? Nothing to be too proud of about that
They don't generally pay for their mistakes career wise so sure, why not?

[Dragun]

Anyway, I think we're on a roundabout with this now. No hard feelings either way from me and there's been some good input and some questionable input, but at the end of the day it's out of any of our hands. There are lot of jobs at stake and the whole country is hurting right now. Whichever way it goes, let's hope the outcome is as positive as possible.

Cheers guys.

[Berealgetreal]

Amazing how many people on here using “tax payer dollars” instead of self interest and career progression as their reasons for which their tiny competitor should be deprived of help to continue trading.

Better off saying “can’t wait for them to collapse I’ll have a good chance of fast tracking my command that was stolen by those pesky JQ pilots”.

Just wait and see the low ball conditions that come in after Virgin and good luck seeing another payrise after that! Alan will get his barrel out for you then! Project Sunrise? More like project Sunset!

Children of Alan indeed, hating him one minute loving him the next.

[34R]

Amazing how many people on here using “tax payer dollars” instead of self interest and career progression as their reasons for which their tiny competitor should be deprived of help to continue trading.

Better off saying “can’t wait for them to collapse I’ll have a good chance of fast tracking my command that was stolen by those pesky JQ pilots”.

Just wait and see the low ball conditions that come in after Virgin and good luck seeing another payrise after that! All will get his barrel out for you then! Project Sunrise? More like project Sunset!

Children of Alan indeed, hating him one minute loving him the next.

If believing that is helping you get through this, and I really hope you guys do, then each to his own.

Nobody I work with, (not that I’m working anymore) has suggested anything that could even be remotely construed as pleasure or some sort of perverse satisfaction in what VA are currently enduring. Personally I think we will be there before too long as well.

I have a lot of dear friends across a lot of departments at VA and I call them every day to see how they are. They call me and offer the same support.
It’s horrible this whole thing has been turned into a VA vs QF thing. Personally I think it’s unnecessarily been portrayed that way, but with time and emotion has now become some sort of self sustaining force that has gotten out of control.

Anyhow, not that you seem prepared to listen to anybody from the evil galactic empire, but I extend to you and ALL of your colleagues nothing but positive thoughts and a desire to see all of us back at work

[ruprecht]

Amazing how many people on here using “tax payer dollars” instead of self interest and career progression as their reasons for which their tiny competitor should be deprived of help to continue trading.

Better off saying “can’t wait for them to collapse I’ll have a good chance of fast tracking my command that was stolen by those pesky JQ pilots”.

Just wait and see the low ball conditions that come in after Virgin and good luck seeing another payrise after that! All will get his barrel out for you then! Project Sunrise? More like project Sunset!

Children of Alan indeed, hating him one minute loving him the next.

What crap....

Im with QF. No-one, and I repeat, no-one that I know in QF wants Virgin to fail; we all have mates in Virgin. Everyone I know is just trying to get by and make sense of this stand-down situation. To suggest that some of us are seeing this whole situation as an opportunity for “fast tracking command” is ludicrous.

[Paragraph377]

What crap....

Im with QF. No-one, and I repeat, no-one that I know in QF wants Virgin to fail; we all have mates in Virgin. Everyone I know is just trying to get by and make sense of this stand-down situation. To suggest that some of us are seeing this whole situation as an opportunity for “fast tracking command” is ludicrous.
Agreed. Doesn’t make sense as there will be no Commands for fast tracking. We are entering a Depression. Just think about it for a minute - Delta is losing $60m per day, United $100m per day. The Orange Man has agreed to a $25b bailout yet United said it will still go to the wall. Bringing it back to Australia, a paltry $719m is on offer. Peanuts, and not enough. VA is gone. If this situation were to go on for another 6 months QF will be in the same position. Businesses, travellers, holiday makers, tourism and market confidence will not return the day that the announcement ‘COVID free’ is made. Nobody will have any money. We are in for years of pain....

[ruprecht]

..and, just like that, the Prophet of Doom arrives.

[TBM-Legend]

BRITISH TURN ON RICHARD BRANSON OVER FAILURE TO HELP STAFFwritten by Dylan Nicholson (https://thewofa.com/author/dylan-nicholson/) March 20, 2020Sir Richard Branson is facing a mounting backlash in his home country over his decision to order Virgin Atlantic staff to take eight weeks of unpaid leave and then ask for a government bailout.

MPs and the press have attacked the British Virgin Group founder, estimated to be worth £11.2 billion, for not spending his personal fortune to help employees.

​​​​​​“Eight weeks at the £94 statutory sick pay would cost £754 per employee. There are 8,571 employees in Virgin Airlines. If all of them took eight weeks unpaid leave that would be a cost of £6.4 million."

[Paragraph377]

BRITISH TURN ON RICHARD BRANSON OVER FAILURE TO HELP STAFFwritten by Dylan Nicholson (https://thewofa.com/author/dylan-nicholson/) March 20, 2020Sir Richard Branson is facing a mounting backlash in his home country over his decision to order Virgin Atlantic staff to take eight weeks of unpaid leave and then ask for a government bailout.

MPs and the press have attacked the British Virgin Group founder, estimated to be worth £11.2 billion, for not spending his personal fortune to help employees.

​​​​​​“Eight weeks at the £94 statutory sick pay would cost £754 per employee. There are 8,571 employees in Virgin Airlines. If all of them took eight weeks unpaid leave that would be a cost of £6.4 million."
Its amazing isn’t it, the Pied Piper has finally been recognised for the parasite that he is. About time the Branson acolytes woke up to the fact that he is in it for himself and couldn’t give a rats arse about the employees.

[Paragraph377]

..and, just like that, the Prophet of Doom arrives.
That comment shows just how ignorant you are Cinderella. It’s ok, you go to bed tonight and dream about nice things, old Para is being pessimistic again. Come talk to me in 2 years time mate! See you then. Cheers

[ruprecht]

That comment shows just how ignorant you are Cinderella. It’s ok, you go to bed tonight and dream about nice things, old Para is being pessimistic again. Come talk to me in 2 years time mate! See you then. Cheers

Cinderella...? :confused:

[SydAusSLF]

It's sad but it looks like VAs days are numbered, with new beginnings comes new opportunities and ways of looking st things. As a regular passenger (and one time pilot) I'd actually love to see this downtime in the industry to fast track the removal of restrictions on AU/NZ borders, allowing seamless transition between countries from domestic terminals. This allows both ANZ and QF to compete truly and fairly across both countries, and may just allow both carriers to survive domestically in the new post-Covid world.

[Alfie.floor]

Its amazing isn’t it, the Pied Piper has finally been recognised for the parasite that he is. About time the Branson acolytes woke up to the fact that he is in it for himself and couldn’t give a rats arse about the employees.

Agreed!
He was once famous for saying “look after your employees and they will look after your business”
If there was ever a time to live by your words this would be it.

[longjohn]

Just wait and see the low ball conditions that come in after Virgin and good luck seeing another payrise after that! Alan will get his barrel out for you then! Project Sunrise? More like project Sunset!

Children of Alan indeed, hating him one minute loving him the next.

I have a lot of good mates in VAH, many ex AN who really don’t deserve this twice....

But.. I’ll call a spade a spade. It was DJ that, along with Impulse started the pilot race to the bottom in this country. Bit rich to suggest they are now the buttress against low pay...

[AerialPerspective]

Propping up failing businesses is a road to nowhere. Please look at the Australian car manufacturing industry and the outcome of hundreds of millions spent on them. VA losses are gigantic by any measure. They can not keep using a credit card to survive. Sooner or later you reach the limit and then in their case demand another card...

There will be another airline in Australia. Upgrade Alliances AOC and put some B737's on it and voila..[QF sells their bit in this case]

The car industry was a little different. It provided a manufacturing base and the ENTIRE world subsidises it's car companies, the US by about 10 times what we did, Germany 3-4 times what we did. The government just made a conscious decision to stop subsidising, put them on an uneven playing field and let it collapse essentially. Being subsidiaries, they just pulled out and closed up shop. Hold and Ford building cars that no one wanted was a failure of management but in some ways, an excuse, as thousands of Ford Territories were sold and lots of Commodores and associated models.

We kind of have the reverse here now because with the airlines, we don't subsidise them (except for some regional routes that wouldn't be offered by anyone otherwise) but every other damn country that has harangued successive Australian Governments into liberalising aviation has RETAINED ownership control of its airlines so they were full of crap and before anyone declares open skies and letting SQ in, yeh, of course SQ pushes that barrow because they come from an Island the size of a postage stamp and have no domestic network to use as a base so they want to go around and cannibalise everyone else's market and cry 'free trade'. It would be a different song if they were on a large land mass with a big domestic network.

[AerialPerspective]

The guys in Singapore, Vietnam or Japan won’t have choice. No Union No Choice.

Jetstar Asia will probably slash Pilot Remuneration considerably. Expect 10 or 20% cuts. Tiger Singapore did this about a decade ago, didn’t go down well, but the industry didn’t crash, just high fuel prices. As the market was relatively stable and big twin jobs were available, they lost half the captains almost instantly.

Back then, you cut pilot wages and everyone walked and went to Qatar or Emirates. Management will be well aware that there isn’t many jobs for those to escape to now, so the wider group will just have to suck it up.

I have been talking to many who say they hope their company will ask for Voluntary Redundancies, as they are 2-3 years away from retiring, but it’s going to be a slow and miserable last few years of the career, so take the cash and run.

Obviously they can’t chop and change current agreements here as such, but I imagine it would be more culling, than attempting to change conditions. Eg. Jetstar entire 787 fleet parked, sold and pilots made redundant. The long haul leisure market is the pain point, Air Asia X is probably finished. They could barely pay their leases last month according to some reports. Scoot will be the long term survivor, although I might be nervous if I was on the 787 there.

I think it's more likely the JQ 787s will go to QF, who will offload the A330-200s. If the downturn is that severe, they may be able to get rid of all the A330s and with the 747s gone it will be a mainline A380, 787, 737 fleet, with perhaps the A350 coming in to do Sunrise if it goes ahead and replacing the A380 sooner rather than later if the one-stops are as profitable as PER-LHR.

Of course, the problem will be who will want to buy the A330s and A380s. This could offer the opportunity for a post-Covid write-down of their value and some tax breaks.

[AerialPerspective]

Advertising when there is no flying, and they are short of money. Disaster. They need some administrators in there to save what they can of it.

I was thinking the same thing. If this new bloke is so brilliant then he might want to demonstrate more professional communication standards... in the last week we have seen the following:
- Complaining to the ACCC for statements made by Qantas suggesting they don't have enough cash and insisting that they have $1Bn available and can weather the storm;
- If that's true then why, within days of basically saying everything's hunky-dory why would it be necessary, without warning, to make Tiger's entire pilot group redundant?;
- Not even a week after the initial complaint about Qantas' comments, insists they need $1.4Bn from the Government to keep afloat - so, in other words, Qantas was correct? (the defence for any alleged damage via words is truth);
- Now, so desperately short of cash and dying in a ditch without $1.4Bn from the government, they run FULL PAGE COLOUR Ads in major newspapers??? Not a good look when you're crying poor.

Putting the debate about whether or not to save it (VA) aside, at the very least, they score a 2/10 for professionalism in the mixed messages and contradictions of the last week alone.

[AerialPerspective]

"Danielle Keighery, Virgin Australia’s chief experience officer"...

There's part of the problem right there and not just at VA either.

Yes, weasel word titles and too many 'specialists' and 'advisers' that are neither in practice and contribute little other than ensuring the standard weasel words are worked into every meeting.

[AerialPerspective]

Almost as stupid as the title ‘specialist’. Safety specialist, Training specialist, Market, Brand and Research specialist, Alliance specialist and so the nauseating list went on.......
What a load of fluffy wank and one of the reason they were in the **** financially - too many overrated, unnecessary or excess positions that did SFA. The Viallge Idiots and executive tossers fostered this stupid culture where mates were rewarded with ‘specialist’ roles and titles and paid to do jobs that were not necessary for the organisation. Far too many layers at VA.

Almost as silly as some titles like Guest Services Operator... what are the operating... conjures imagery of someone behind a check in or service desk pulling levers, turning dials and watching the row of coloured lights come on and go off while bursts of steam emanate from around them and out pops a boarding pass into a slot.

[AerialPerspective]

They have demonstrated an interest three times in as many decades, and each failed. They are smart enough to say nothing, do nothing and leave it that. They have just been bailed out again are making redundancies. Any desire for a fourth attempt will be tempered by the means to do so.

I would rather see VA continue and return as a simpler version of itself, which is where I think they were trying to head under thier new leadership.

Technically that's not true, they haven't been bailed out. They've been provided with capital/loan by the government. They were profitable before this and would have continued to be. As good a fit as NZ would be I doubt it'll happen because I don't see a Kiwi government saying "Hold on, we just extended you a loan and you want to have another crack at the AU market again..."

[QFcrew]

Interesting comments about Branson .... he is the smallest shareholder in Virgin Atlantic, Delta and KLM-Air France own 80%. He is also the smallest shareholder in Virgin Australia. He is very good at selling his brand, but not a major player in aviation anymore.

[DanV2]

Interesting comments about Branson .... he is the smallest shareholder in Virgin Atlantic, Delta and KLM-Air France own 80%. He is also the smallest shareholder in Virgin Australia. He is very good at selling his brand, but not a major player in aviation anymore.

That KLM/AF deal fell through in late 2019. Branson is still 51% shareholder of VS.

Source: https://www.ft.com/content/0a67e5f4-16b6-11ea-8d73-6303645ac406

[Voz1]

Yes VA are shaky. Basically because of its debt and the close to zero turnover. Not here to bash any other operators, but ALL airlines are in trouble if this thing goes on, no one is immune. All that airlines can do is sell assets or refinance airframes in the hope that will see them through. The only difference between VA QF and JQ is how long it will take before the administrators will walk in. Stick together everyone, no point ripping into you comrades when the enemy is over the fence.

[ampclamp]

Exactly Voz1. I want both airlines to survive.

It would be interesting if VA's big shareholders decided to chip in a few billion between them (as unlikely as that may be) the shoe would definitely be on the other foot in the "war of attrition" some seem to promote.

[Gnadenburg]

I have a lot of good mates in VAH, many ex AN who really don’t deserve this twice....

But.. I’ll call a spade a spade. It was DJ that, along with Impulse started the pilot race to the bottom in this country. Bit rich to suggest they are now the buttress against low pay...

Oh yes. The initial Virgin Blue cadre. Training Captains paid less than incumbent F/O's at AN & QF. Sure pay rises came; only after AN's demise. And the behaviour of "some" of the VB staff when the door shut at Ansett ranged from spiteful to immature. Now this was all long ago and Virgin is loaded up with great folks and I wish them well.


I'm not sure of a bail-out of a business failing anyways? I''m flabbergasted at the cost to government and we are really just past the beginning and will now face further unknowns that may resonate towards national security.

Will nations on our doorstep fail? What will China do in the region? Will the disaster unfolding affect the US military budget? Forcing nations to have to pay more for their own security?

We are going to need a plan as a nation coming out of this pandemic and there will be expensive considerations including health care and national security- along with targeted stimulus. How can government prop up failing business that were going to fail anyways?

[Led Zeppelin]

........How can government prop up failing business that were going to fail anyways?

Simply, they can't.

[TBM-Legend]

Be careful of what might happen in Indonesia if this creates panic and lots of refugees headed our way...

[-41]

in the current Clown world that outcome would not surprise anyone, stuck at home with the threats of $ fines.

[Gnadenburg]

Indonesia is a little more complex than that historically. Not an unlikely scenario; though far more unsavoury domestic issues and medium term security issues likely to arise. PNG could require expensive assistance and most smaller island nations too ( devastated in 1917 flu ). You'd like to think China would help without strategic motive though their move into the region another scenario commanding government funds for security.

Australians need to back up Australians in the future more so than in anytime in recent generations. Not wishing ill on Virgin employees. I hope some logical and less painful outcome can emerge. I recall a shrunken Ansett operation with A320's in administration and Fox-Lew consortium seeking government guarantees. It was a bit of a con though something along these lines will no doubt be considered by the current government.

[ExtraShot]

You'd like to think China would help without strategic motive

I don’t think China does anything these days without Strategic motive. Particularly in the territories surrounding Australia.

[Icarus2001]

I don’t think China does anything these days without Strategic motive. Particularly in the territories surrounding Australia. Do you think any country helps another without a strategic motive?

I hope some logical and less painful outcome can emerge. I recall a shrunken Ansett operation with A320's in administration and Fox-Lew consortium seeking government guarantees.

I do wonder what a 50% cut to the VA operation would look like. Can leased aircraft be returned without too much penalty? Or simply sell the owned airframes? The idea is to reduce the cash burn rate and be ready to increase domestic capacity when demand is allowed to rise. Whether that is enough to stave off administration who knows.

[DanV2]

Do you think any country helps another without a strategic motive?



I do wonder what a 50% cut to the VA operation would look like. Can leased aircraft be returned without too much penalty? Or simply sell the owned airframes? The idea is to reduce the cash burn rate and be ready to increase domestic capacity when demand is allowed to rise. Whether that is enough to stave off administration who knows.

Surely a "VA mk II" (minus the Virgin name) would be using the owned VA 737s as the administrators such for a buyer of what's left of VA in a post-administration scenario.

On a related note: VAi has 4x owned 777-300ERs (registed to Virgin Blue Leaseco (VB Leasco Pty Ltd)), those 777ws will eventually have to be sold off (with the returns sent to creditors) as it will be likely that VAi as a whole will be folded up and dissolved if the "mk II" post-administration operation is basically a domestic-only replacement for VA.

[ExtraShot]

Do you think any country helps another without a strategic motive?

No, but an Authoritarian Ruled China with expansionist desires is certainly not the country I’d ever be remotely expecting it from.

[piston broke again]

Led Zeppelin, VA 737 domestic op's are profitable under normal circumstances. These are not however normal circumstances. QF will be bleeding much faster than VA, but they can sustain that bleeding for longer. There's a reason QF had to immediately pull the 1.4 billion injection card.

[Arctaurus]

PBA - The problem is that Virgin is bleeding cash with fixed overheads, and according to the last downgrade:

a default or distressed exchange appears increasingly likely over the next 12 months, absent timely government or other support and/or a swift reversal of the COVID-19 outbreak

[Buster Hyman]

So, if they do go into Administration & a VA Mk II is on offer, beware who you sign on with.

From the Ansett Mk II experience, the employees would've worked for Ttesna & the assets would've been owned by a company called Queenscross. Sydney Airport Corp. were the only ones who baulked at that arrangement & it fell over like a house of cards. People will still try & take advantage of you!

[Arctaurus]

A low cost VA mark II would still be more preferable than the existing debt ridden company. It would be a formidable competitor to Jetstar. The Virgin name would probably disappear though.

[krismiler]

Unfortunately, comparisons are unavoidable with the last days of Ansett.

Structural problems within the companies being brought to a head by a major world event, though this time it's far more serious.
Both were losing money however Ansett were more encumbered by unions and high staff rates of pay.
Calls for government bailouts, though this time QF are included.

If history repeats, then the next step would be to restructure into a smaller operation with reduced aircraft types, numbers and routes. Even then the consortium trying to rescue Ansett wanted government guarantees of profitability, when these weren't forthcoming they pulled the plug.

However Virgin is a much leaner operation than Ansett and the problems aren't as deep routed, given that the government will want to maintain a competitor to QF they will probably back a reduced sized and heavily restructured operation limited to B737 domestic flying. Done correctly this could be profitable, and a convincing argument made for a rescue package on the basis of sweeping changes leading to profitability in the medium term.

All previous projections are now out the window and any forecasts will need to be made based on the basis of a vastly changed operating environment in the short to medium term.

One factor heavily in favour of Virgin is that if things reach the stage where Qantas has to be nationalised, the government would want a counter balance to any demands from the QF unions for excessive pay increases from what would be an all powerful monopoly airline, capable of bringing Australia to a stand still if its demands weren't met . Divide and rule.

[Ken Borough]

This article is well worth reading. A devastating take-down!

https://www.anthonyklan.com/aviation

[Paragraph377]

This article is well worth reading. A devastating take-down!

https://www.anthonyklan.com/aviation
Great article. Klan has been reporting on aviation matters for some time and his reporting is usually unbiased and factual while being brutal as well. Virgin have tried to ride on QF’s coattails for years. Always copying the opposition airline. Always sulking when they think they are being hard done by. Scurrah is simply copying that mentality but it isn’t working this time around. The Government is right, why bail out a company with taxpayer money when the company hasn’t paid tax for years while at the same time it’s executives have raked in millions for themselves each year? And, it is mostly foreign owned!! I feel sorry for the staff who are not, and never been part of the executive management group. But your bosses at the top are the ones who have failed you. CEO’s, Board members - all abject failures that have brought the airline down.

[coaldemon]

It will be interesting to see what the Government does but it would be a surprise if they bail them out. If the shareholders won't do it then I can't see the Government being levered into doing it to keep the air fare. Next will be Airports, Travel Agents, Cruise Ship companies and other businesses that consider themselves essential services and critical to the economy. Post Ansett it took about 12 months for there to be a reasonable presence from VB at the time but at no stage did they provide any real competition to QF particularly in Business Class.

In regards to not being like Ansett lets see they have:

A complicated and mixed up fleet which evolved for VB out of a single type - Tick
Shareholders that don't want to foot the bill - Tick
I think if you do a comparison on the Pilots pays they will be very similar although the AN Pilots were far more flexible on work rules than the VA ones are. - Tick
And lastly they both put out stories on why they should keep going once they lost the customers confidence. AN through the 767 Fiasco and VA through putting in the media that they need $1.4 B to survive- Tick
Both had trigger events to complete the fall. AN had 9/11 and VA has COVID-19 - Double Tick

All in all it will be interesting to watch. The issue now is that COVID-19 is here to stay so the opening up of borders may not take 3 months which VA needs to keep going it looks more like 9 months to a year. Overall a bleak time for the world's economies. So much for retiring for most of us anytime soon.

[TimmyTee]

This article is well worth reading. A devastating take-down!

https://www.anthonyklan.com/aviation

He copy and pasted that random Michael West piece under "companies". Chance are he wrote it, yet you're presenting him as another "devestating" source.
I asked earlier on if Qantas employees or beneficiaries would declare their position in this thread about Virgin Australia, and choked on my wheeties at the suggestion they all would by a known Qantas pilot

So after seeing you conitnually sling mud at VA, I ask you Ken Borough, you wouldn't happen to have a stake in Qantas would you..?

[TimmyTee]

(for the unbiased out there, maybe first take a look at this Anthony Klan's Twitter and decide for yourself if "his reporting is usually unbiased"...
https://mobile.twitter.com/Anthony_Klan?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5 Eauthor

The bloke had never tweeted about Virgin (or Qantas) up until a few weeks ago and then went full feral in his attacks on Virgin. Heroically "calling out" Virgin bots, bravely labelling Virgin the most corrupt company in the world.. There's nothing there that shows balance or "unbiased" reporting.
Something changed quite literally over night for him..
Couldn't have been his bank account could it?

[Karunch]

the government would want a counter balance to any demands from the QF unions for excessive pay increases from what would be an all powerful monopoly airline, capable of bringing Australia to a stand still if its demands weren't met . Divide and rule.

It takes nothing more than the stroke of a pen & foreign AOC's will allow domestic sectors. No loans or bailout packages required. Capacity & competition restored. You might even find Alan backing a VA support package if that came about. Strong parallels to car manufacturing in Australia.

Australians have shown a willingness to travel on low cost, foreign carriers of questionable safety for some time now. Most of those carriers would love to have a bite at our relatively high yield domestic market.

[ampclamp]

TimmyTee, your post maybe correct in what you say in him just launching into Virgin now and perhaps has an interest, we don't know, but is anything he has written about them not factual?

You can criticize his motives but you would be more effective in proving his information to be wrong.

I'm in favour of keeping VA people employed , but it's up to the major shareholders first and foremost to stump up the cash.

[Mach E Avelli]

In my junk email this morning was this incredible offer! Not quite up there with a Nigerian scam, but surely sailing close to the wind to be encouraging any expenditure on travel at the moment? I suppose the odd mug will see this as a deal not to be missed...

Dear Velocity member,



We want to let you know about some important changes we’re making to Velocity Global Wallet® from 4 May 2020 under our new Product Disclosure Statement (PDS).



* We’re reducing fees you pay when using your Velocity Global Wallet® card, including removing the 2.25% currency conversion fee2 (foreign exchange rates apply), supplementary card issue fee, and the $1.95 ATM transaction fee.

* You’ll earn 1 Velocity Point for every AU$4 spent in Australia on qualifying purchases.1

* No more ATM transaction fees when withdrawing cash in Australia and overseas.3

* We’re introducing a new load method via VISA/ Mastercard which will have a 0% load fee when loading into a foreign currency wallet, or 0.5% when loading into your AUD.



The updated PDS also includes the following important changes:







* Your Overseas earn rate remains the same, 2 Velocity Points for every AU$1 spent, on Qualifying Purchases.

* You will now earn 1 Velocity Point for every AU$4 spent, on Qualifying Purchases in Australia.1

* The Inactivity Fee will change to 0.5% of the Available Balance, with a minimum of AU$1 for accounts that have been inactive for 12 months.

* BPAY will still be FREE when you load into a Foreign Currency Wallet, and will have a fee of 0.5% of Funds Credited when you load into your Australian Wallet, with a minimum of AU$1 per Load.

* We’ve updated section 17.5 to indicate the assumptions you might be liable for losses arising from Unauthorised Transaction if you contributed to those losses through fraud, theft, illicit use or by inappropriate use of the card and PIN. These assumptions only apply to a very small number of transactions, losses will still be covered for most customers.

* We’ve updated the definition of Qualifying Purchases that allow you to earn Velocity Points, and included a section to explain you might stop earning Velocity Points if you use the product in a fraudulent or illicit way.

* We’ve updated the section where we describe what happens with Card Inactivity and Account Closure

[B772]

Lifetime Virgin Australia Lounge Memberships for sale; cheap. Best offer accepted.

[John Citizen]

Virgin seeks statement of confidence (https://7news.com.au/lifestyle/health-wellbeing/virgin-seeks-statement-of-confidence-c-962990)

Chief executive Paul Scurrah is seeking “a statement of confidence from government as quickly as we can, in much the same as they would do for a bank”.

[ampclamp]

Has anyone heard or read anything from the major shareholders and their position on this? Are they just sitting back hoping we will let them of the hook before making a decision?

I doubt the government is going to blink.

Would the governments of Singapore, Abu Dhabi or China entertain extending such assistance for any foreign backed airline operating in their jurisdictions?

I think we know the answer to that.

I want to see VA jobs saved, been there with Ansett. It's horrible, but I just cannot see our government being on the hook for 1.4 billion without getting commitment from the overseas interests first.

[Paragraph377]

Virgin seeks statement of confidence (https://7news.com.au/lifestyle/health-wellbeing/virgin-seeks-statement-of-confidence-c-962990)
In return, can Scurrah offer a ‘statement of confidence’ from VA that in return for financial assistance from the Government VA would prioritise looking after its staff while also boning the EM team and hopeless Board? It’s a two-way street and Scurrah would have to bring something to the table, something that is detailed and outlines how the legacy issues that have lead to the current malaise have been put to pasture and will not return.

[krismiler]

It takes nothing more than the stroke of a pen & foreign AOC's will allow domestic sectors.

Not really a practical solution when multiple frequencies between city pairs are required, many of the foreign airlines come in off a long haul flight with a widebody aircraft which needs to be filled and have a crew change. In 1989 even with foreign aircraft based here, and using the airforce they were nowhere near replicating the old network.

AirAsia and Lion Air have set up subsidiary airlines throughout Asia, Australia would be a nice fit into their network, possibly through a Darwin hub which would allow an Australian domestic operation to feed in passengers and allow one stop connections from BNE/SYD/MEL to Asian cities without having to operate A330/B787s ie the Jetstar/Jetstar Asia model.

CAPA figure show the Lion group having 310 aircraft and the AirAsia group having 237 aircraft and both have large future orders. Virgin are on around 100 at the moment. Kicking off a serious operation in Australia with around 40 aircraft would certainly be within Lion Air's capability if Virgin goes under.

Any subsidiary within Australia would have to employ Australian staff and be subject to CASA oversight. The 2011 grounding of Tiger Australia would discourage anyone thinking of cutting corners for quick profits. Whilst Lion Air don't fly to Australia at present, its subsidiaries Malindo and Batik do, however Australian government employees are banned from using them. There could be problems selling connecting tickets if the first half of the journey was subject to an Aussie AOC and the next half on a foreign AOC not meeting CASA standards. Possibly, popular destinations such as Bali could be operated by the Australian subsidiary instead.

Qantas won't be allowed a monopoly, even if it gets nationalised and fares are regulated by the government, the unions would be in too strong a position if they could simply ground the whole country if their demands weren't met. There must be an alternative, either bail out Virgin or allow another operator to quickly fill the gap if they go under.

[non_state_actor]

In return, can Scurrah offer a ‘statement of confidence’ from VA that in return for financial assistance from the Government VA would prioritise looking after its staff while also boning the EM team and hopeless Board? It’s a two-way street and Scurrah would have to bring something to the table, something that is detailed and outlines how the legacy issues that have lead to the current malaise have been put to pasture and will not return.

Most of that can't happen as the board is full of representatives of foreign airlines, who have a right to be there. The EM who got the airline into this mess have all left with millions of dollars in their bank accounts already. All he can offer is to cut the entire widebody operation and probably get pay concessions from the staff and offer some sort of lean domestic operation. I doubt 'looking after' anyone will be on the agenda, you will be thankful you have a job.

The only other real alternative for the government is to let Virgin go broke and offer AOC waivers for a foreign entrant. Failing that it will be a Qantas monopoly for a long time to come, given the current state of the world aviation industry.