Private equity take-over for Virgin Australia?

[MelbourneFlyer]

Private investors are reportedly circling Virgin Australia for a 'take-over and turn-around’ manoeuvre which could result in leaner, more competitive (but potentially domestic-only) airline

https://www.executivetraveller.com/news/virgin-australia-private-equity-take-over

This doesn’t sound like the worst that could happen, in fact it might end up being just what Virgin and Australia needs. Still two airlines so still competition, but not a Virgin that’s trying to be Qantas and suffering for it. Also, being in Australian hands sounds good to me!

[topend3]

Private investors are reportedly circling Virgin Australia for a 'take-over and turn-around’ manoeuvre which could result in leaner, more competitive (but potentially domestic-only) airline

https://www.executivetraveller.com/news/virgin-australia-private-equity-take-over

This doesn’t sound like the worst that could happen, in fact it might end up being just what Virgin and Australia needs. Still two airlines so still competition, but not a Virgin that’s trying to be Qantas and suffering for it. Also, being in Australian hands sounds good to me!

Yes agree their best bet at survival it will seem, though will still involve a lot of fleet and susbequent jobs (both direct and indirect) being shed in any re-launch.

[Icarus2001]

Yes, some hope. They will only jump in once the company is in administration. Relief from debt and shareholders becomes possible then.

[airspace alpha]

If, and I repeat if, it happens, assuming Branson pulls out would he also take the IP rights to the name “Virgin” with him?
and if so what would you call the resurrected airline?
Ansett MUST be taken.
of course you could call it Ozjet...........................


I’ll get my hat............

[Blueskymine]

I see VARA emerging with the fifo operation and the rest well, split away.

[Wingspar]

Agree with topend3.
Come administration time I don’t think they’ll be a lack of interest in buying the operation.
A bit less fat though which was always going to be the way. They were on that road anyway.
There has to be competition and a second major in Australia.
Thoughts are with you VA guys and girls!
I just hope those TPG guys remember to wake up the guy writing the cheque!

[Colonel_Klink]

If, and I repeat if, it happens, assuming Branson pulls out would he also take the IP rights to the name “Virgin” with him?
and if so what would you call the resurrected airline?
Ansett MUST be taken.
of course you could call it Ozjet...........................


I’ll get my hat............

I doubt RB would take the IP rights to the Virgin brand if his share holding was diluted - he makes far more from the naming rights than any ownership of the Company through shares.

[krismiler]

They will only jump in once the company is in administration.

Exactly, why move in now and be responsible for all the debt, and the redundancies which have to come ? Once an administrator is appointed, the creditors are put behind a wall, the administrator works out what everyone will get in the event of a winding up and sell off of the assets. Now your proposal goes in for a take over and it only has to be slightly above what the creditors would otherwise get for them to agree to it. You just bought yourself a new airline free from any hangover from the previous company. Next you post out contracts with your terms and conditions to the staff you want to take on.

The potential purchasers won't give out too many details regarding their intentions at this stage incase it affects the price. They could go for a 30-40 B737 domestic only low cost operation (Virgin Blue MK2) or they could envisage a 70-80 sized fleet of B737s to maintain the previously profitable parts of the network. International, if at all limited to NZ, Bali and Fiji. Business class, which the aircraft are already fitted for, akin to the JQ/Scoot/AirAsia offering not trying to compete with QF for the top end of town.

Aircraft leases will be easy to obtain on favourable terms so there's no hurry to commit at this stage.

[Blueskymine]

If they run a 30-40 aircraft operation they’ll be slaughtered by Jetstar. They need critical mass to spread the costs with a similar footprint.

My guess is Alliance will buy VARA and we will see what happens to the 737s

[crosscutter]

Anyone who’s been following the SAA situation will recognise the impending restructure of Virgin is exactly what financial analysts in SA say should have happened to SAA years ago. More loans likely entrench existing deficiencies as access to the needed restructuring facilities are unavailable. The advantage is minimal staff losses but it’s kicking the can down the road. There will be no shortage of reinvestment for the ‘new Virgin’, which I guess is scant comfort for employees. Their emotions should be directed at JB firstly, and the board next, who shirk away from all responsibility other than compliance. I feel for all employees of Virgin. It makes me angry. The ivory tower cultivates and spreads the cancer but gets to walk away with the magic pill whilst blaming the hostile environment.

[The Bullwinkle]

Their emotions should be directed at JB firstly
I'm pretty sure every single employee is on the same page with that one! :mad:

[Going Nowhere]

If they run a 30-40 aircraft operation they’ll be slaughtered by Jetstar. They need critical mass to spread the costs with a similar footprint.

My guess is Alliance will buy VARA and we will see what happens to the 737s

Why bother buying anything? Wait for it to fall over and then pick up the FIFO contracts.

The mines are already getting nervous.

[The Bullwinkle]

The mines are already getting nervous.
Maybe Twiggy should buy Virgin! :ok:

[Denied Justice]

I would have thought Alliance will be looking even more closely at what is unfolding with VARA. WA FIFO operations must have some appeal as Alliance are already in the field.

[Des Dimona]

As said above, there is no way any Private Equity Investor would touch VA until it is debt quarantined, ie, in administration. The debt has to be removed prior to a new investor coming on board.

[bigbrother]

a complete change of board is the first step otherwise how can the airline hope to chart a new course. A fish rots from the head is an old and true adage. The board, and Borgetti have created the mess. How about some accountability. Sacking Tiger pilots, great move idiots. Blame never apportioned where it belonged. Crap rostering, crap management, crap lease arrangements on aircraft. Crap ideas (Bali, catering etc) by managers have sunk this Titanic.

[Ascend Charlie]

Dunno about private equity, the news this morning was that China Southern is one of the 2 main contenders.

Destroy the world economy, buy it back at fire sale prices, own the world. Simples.

[No Idea Either]

Bit of perspective. I am not a JB fanboy BUT, VA hasn’t turned a profit over the last 6 years due to the capital investment of putting the airline on a path of direct competition with QF. the shareholders have stumped up billions in order for this to happen. No dividends have been issued so hence no money going back O/S. I think the owners finally realised a change of leadership was required hence JB told to move on. ANZ debacle most likely precipitating that. If that investment had not been made then we would still be competing against JQ alone and all this talk of industry competition would be moot, QF would be doing exactly as they please, Gouging out the public. Plenty of examples of this behaviour still going on. So if we were still VB and eking out a meagre profit against JQ would that be a good thing, who knows, probably wouldn’t be in this situation, but then all of you who don’t get staff travel would be paying for it........remember QF is in a good position financially at the moment, well they say they are - all bravado in my opinion, but they have already been ‘chosen’ as the winner regardless of the VA outcome. And let’s not forget the billions in dividends going to QF’s 41% foreign shareholders for all you ‘advance Australia fair’ followers. How much investment has QF actually done in the business (apart from bonus/dividend inducing buy backs) over the last decade........bueller......bueller.......bueller.

[normanton]

Bit of perspective. I am not a JB fanboy BUT, VA hasn’t turned a profit over the last 6 years due to the capital investment of putting the airline on a path of direct competition with QF. the shareholders have stumped up billions in order for this to happen. No dividends have been issued so hence no money going back O/S. I think the owners finally realised a change of leadership was required hence JB told to move on. ANZ debacle most likely precipitating that. If that investment had not been made then we would still be competing against JQ alone and all this talk of industry competition would be moot, QF would be doing exactly as they please, Gouging out the public. Plenty of examples of this behaviour still going on. So if we were still VB and eking out a meagre profit against JQ would that be a good thing, who knows, probably wouldn’t be in this situation, but then all of you who don’t get staff travel would be paying for it........remember QF is in a good position financially at the moment, well they say they are - all bravado in my opinion, but they have already been ‘chosen’ as the winner regardless of the VA outcome. And let’s not forget the billions in dividends going to QF’s 41% foreign shareholders for all you ‘advance Australia fair’ followers. How much investment has QF actually done in the business (apart from bonus/dividend inducing buy backs) over the last decade........bueller......bueller.......bueller.
Great point. Except Qantas has been able to pay is 41% foreign owned shareholders because it makes a profit. Virgin doesn't. They couldn't get it together when the times were good, and they won't be getting anywhere when the times are bad. Wrap it up. Start again.

Are you claiming because Qantas is 41% foreign owned, its not an Australian airline?

Also could you tell me where the Virgin "profits" would go if they ever made some?

[krismiler]

https://www.dailymail.co.uk/news/article-8230205/The-CHINESE-considering-buying-Virgin-Australia-Morrison-government-refused-bail-out.html

Now the CHINESE are considering buying Virgin Australia after the Morrison government refused to bail out embattled airline

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

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

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

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

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

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

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

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

The move would likely require approval from the Foreign Investment Review Board before a solution could be reached.
It is believed Australians would lose millions of Velocity Points and flight credits if the company went into administration. On Friday night it was revealed that the Queensland government will offer the troubled airline $200million towards a bailout in the hope that other states will follow suit.

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

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

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

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

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

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

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

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

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

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

[MelbourneFlyer]

Two publications with zero track record in useful aviation reporting, the clickbait rip-off-everybody-else Daily Mail and QLD's sad daily rag.

[Sunfish]

Private equity won’t want it. They will realise that Jetstar is now the Qantas attack dog. They will go for the throat on command. The ACCC is to slow and toothless to be a deterrent.

Qantas will tell Virgin (in a private offshore location) : “You Virgin guys can have 20% market share. If you try to go above that figure, we will crush you back to 15%”.

I’ve seen the same thing done in other industries.

[Con Catenator]

I would have thought that at 20%, a relaunched and much leaner low cost operation with a single fleet and no diversification (a la VARA, Tiger etc etc) , would indeed survive in the Australian domestic market:confused:

[thorn bird]

Channel 7 reporting several Chinese airlines considering a Virgin takeover.

Woo hoo! we're saved...or not.

[LexAir]

Another step on the road to Australia becoming just another province of China.

[nonsense]

Another step on the road to Australia becoming just another province of China.

Without agreeing with you, I think the word you are looking for is"colony", not "province"!

[LexAir]

The last thing a sovereign liberal democracy government needs is a CCP wholly owned airline operating in competition with a private enterprise airline. The government must surely be aware of the danger here.

[On Track]

A Chinese takeover is the last thing Australia needs. The Chinese already have their fingers in too many pies.

[galdian]

I would have thought that at 20%, a relaunched and much leaner low cost operation with a single fleet and no diversification (a la VARA, Tiger etc etc) , would indeed survive in the Australian domestic market:confused:

Hell if you had 20% AND MAKING A PROFIT sure beat the last 10 years of crap management being sold as leadership!

Alliance know their niche and make money - obviously not run by people with delusions of adequacy. :suspect:

[Matt48]

If, and I repeat if, it happens, assuming Branson pulls out would he also take the IP rights to the name “Virgin” with him?
and if so what would you call the resurrected airline?
Ansett MUST be taken.
of course you could call it Ozjet...........................


I’ll get my hat............
They could call it Red Roo Airlines for all I care, I would still fly them if they were just a bit better thnt Deathstar.

[On eyre]

Won’t be able to be called “Virgin” Airlines because it’s well and truly f****d.

[ozbiggles]

There is something I don’t get here from all those trying to dance on the VA grave.
You keep saying it hasn’t made a profit and it is 90% foreign owned. Then isn’t that a good thing that ‘foreign’ companies are wearing the cost of all this and are the ones who are going to take a haircut? Try telling the 10000 staff that they don’t pay tax to the government and passengers don’t pay GST and fees to the government as well when I keep hearing it doesn’t pay tax argument.
The worst thing that can happen for the haters isVA do go into VA, renegotiate all the leases, EBAs and other commercial items and come out the other side a leaner more competitive organisation to take on the beloved big Q. Then the Federal government might wish it did have a bit more control.

[Renton Field]

Agree. I can’t get my head around the arguments that VA isn’t Australian enough, not worthy of a government loan and should look to the market. But at the same time if VA goes to the market and gets Chinese money, well then that’s bad because it’s too Australian.

Spot on to both the above.
There seems to be a bit of hidden motivation,both here and on the other larger ‘Government Loan’ thread,from many of the same repeat posters.
First, it’s “Market forces should be the only determinant of VAs fate,so let it collapse.” But in the next breath,”Oh,it’s okay to allow government intervention in the market to stop fare gouging when there’s only one operator.”
Secondly,it’s “No,no,no taxpayer money for VA,let the shareholders/new investors do it.”
Then,when that is rumoured to be happening, it’s “No way,no Chinese owned domestic airline in Oz,FIRB please fix this.”
Next “Oh,get real, the story was started in some dodgy rag and no one with any credibility will report it,”.And allegedly started by an incompetent media team who took out pointless,expensive, full page anti-monopoly ads,but somehow they were so effective on this ‘fake news’,it’s now the main story relating to VA across the media.
Also,VA was/is “badly managed for over a decade,they’re a joke,they’re culture sucks,blah,blah”.But it was badly managed by somebody who got ALL his airline experience over the road at the Q,and got involved in a pi$$ing competition with their own short man.
There appears to be an inference that the level of past management/talent/ability/attitude (or lack of it) permeates through all employees at the company.Thank god this isn’t true at either VA or the Q.
There’s some truly miserable bastards around,who seem so convinced of their own supremacy that all opposition must be ground into dust,whatever the cost,or maybe the opposite.Perhaps a little insecure that the reaper may be coming for their own very valuable and highly skilled souls at any moment?
Most likely a little too much isolation fever/ red wine/fear of the unknown I reckon..
And yeah,it’s a RUMOUR site,for sure,so all bets are off,but starting or finishing a nasty-for-it’s-own-sake post with “I really hope VA survive,I really do” then sticking the knife in won’t cut it.
There’s not a lot of solidarity from some.Bit of a shame really.

[Colonel_Klink]

Spot on to both the above.
There seems to be a bit of hidden motivation,both here and on the other larger ‘Government Loan’ thread,from many of the same repeat posters.
First, it’s “Market forces should be the only determinant of VAs fate,so let it collapse.” But in the next breath,”Oh,it’s okay to allow government intervention in the market to stop fare gouging when there’s only one operator.”
Secondly,it’s “No,no,no taxpayer money for VA,let the shareholders/new investors do it.”
Then,when that is rumoured to be happening, it’s “No way,no Chinese owned domestic airline in Oz,FIRB please fix this.”
Next “Oh,get real, the story was started in some dodgy rag and no one with any credibility will report it,”.And allegedly started by an incompetent media team who took out pointless,expensive, full page anti-monopoly ads,but somehow they were so effective on this ‘fake news’,it’s now the main story relating to VA across the media.
Also,VA was/is “badly managed for over a decade,they’re a joke,they’re culture sucks,blah,blah”.But it was badly managed by somebody who got ALL his airline experience over the road at the Q,and got involved in a pi$$ing competition with their own short man.
There appears to be an inference that the level of past management/talent/ability/attitude (or lack of it) permeates through all employees at the company.Thank god this isn’t true at either VA or the Q.
There’s some truly miserable bastards around,who seem so convinced of their own supremacy that all opposition must be ground into dust,whatever the cost,or maybe the opposite.Perhaps a little insecure that the reaper may be coming for their own very valuable and highly skilled souls at any moment?
Most likely a little too much isolation fever/ red wine/fear of the unknown I reckon..
And yeah,it’s a RUMOUR site,for sure,so all bets are off,but starting or finishing a nasty-for-it’s-own-sake post with “I really hope VA survive,I really do” then sticking the knife in won’t cut it.
There’s not a lot of solidarity from some.Bit of a shame really.

This is spot on 👏👏👏

[smiling monkey]

Well, which is the lesser of two evils? To be owned by Chinese companies or to be out of a job? Perhaps the Chinese know a thing or two about running an airline to profitability which is a far cry from the efforts of previous Vrigin management?

[Sunfish]

I offer $1.00.

[2020Balance]

I offer $1.50 with a new board and Executive management team

[Buster Hyman]

After the QLD Govt. offered 200mill to VA, on condition that they kept the HQ in BNE, NSW have chipped in with an offer on condition that they move to SYD!
"New South Wales might want to bring a pea-shooter to the fight, we will bring a bazooka and we're not afraid to use it..."
Yes, lets have a bidding war & slanging match in public whilst the VA staff are just simply worried about their future...:suspect:

[Tommy Bahama]

"New South Wales might want to bring a pea-shooter to the fight, we will bring a bazooka and we're not afraid to use it..."

Good Lord has this guy been to VA's management school? This sort of attitude is why it would indeed be a good idea to relocate out of QLD. The Village obviously doesn't have a monopoly on idiots.

[TACQANAVIAVEC]

Well, which is the lesser of two evils? To be owned by Chinese companies or to be out of a job? Perhaps the Chinese know a thing or two about running an airline to profitability which is a far cry from the efforts of previous Vrigin management?

"profitability" or better referred to as "the illusion of" which is what the Chinese government is good at, They can created the illusion of profitability do this with their own lot but its going to be harder task to manage an airline when they have to comply with labour laws and unions.

[LexAir]

I have worked for a Chinese boss. Trust me; it is not something you should want to do. The Chinese way of management is a vertical line from the boss straight down to the bottom where every other person resides. The pyramid structure of accountability and management we are used to is not the Chinese way.

[The Bullwinkle]

Just being reported now...….

Ben Butler
Deloitte understood to be appointed administrator for Virgin AustraliaIt is understood big four accounting firm Deloitte will be appointed as Virgin Australia’s administrators.

The move comes after the federal government rebuffed the airline’s request for a $1.4bn emergency loan as part of a wider industry bailout package and despite duelling aid offers from NSW and Queensland (https://www.theguardian.com/business/2020/apr/20/queensland-nsw-fight-headquarters-virgin-australia-if-it-survives), each of which wanted to host Virgin Australia’s HQ.

It is not clear what will happen to the approximately 10,000 people who work for Virgin Australia if it goes into administration.

Also unclear is what will happen to its fleet of 130 planes, many of which are heavily mortgaged.

The company has been crushed by a $4.8bn mountain of debt and has been burning cash while the fleet is grounded.

[AerialPerspective]

a complete change of board is the first step otherwise how can the airline hope to chart a new course. A fish rots from the head is an old and true adage. The board, and Borgetti have created the mess. How about some accountability. Sacking Tiger pilots, great move idiots. Blame never apportioned where it belonged. Crap rostering, crap management, crap lease arrangements on aircraft. Crap ideas (Bali, catering etc) by managers have sunk this Titanic.

Not all management. Any that joined and spoke sense or was found to have ACTUAL and valuable airline experience, even at management level, capable of pointing out flaws in operations and the direction of the company was quickly shown the door and I'm not just talking about JT. Lots of people in VA in management positions who couldn't run a tart shop.

[dragon man]

I’d love to know what Deloitte will charge . Take a guess, partner $1,000 an hour down to a secretary/assistant at $200 an hour all plus GST. In most cases there is usually not much left after the administrators are done. Hope they survive. Australia needs a second airline.

[Paragraph377]

Not all management. Any that joined and spoke sense or was found to have ACTUAL and valuable airline experience, even at management level, capable of pointing out flaws in operations and the direction of the company was quickly shown the door and I'm not just talking about JT. Lots of people in VA in management positions who couldn't run a tart shop.
All good. Borghetti is fine. Scurrah is wealthy enough to survive the storm at Whistler and Elizabeth will pop up on another Board at another trough. An embarrassing end to a once good airline.

[2020Balance]

All good. Borghetti is fine. Scurrah is wealthy enough to survive the storm at Whistler and Elizabeth will pop up on another Board at another trough. An embarrassing end to a once good airline.

Borgetti took upwards of 42 million out in his 8 year tenure. You know all the staff uniforms “Dina Corp made in China” are actually made in the back streets of Nandi Fiji. Company searches in Fiji show Mrs Borgetti as the Director. Scurrah can go back to playing with a train set or get in the job seeker line with the rest of us. Ahhhh then there’s Stewie

[Paragraph377]

Borgetti took upwards of 42 million out in his 8 year tenure. You know all the staff uniforms “Dina Corp made in China” are actually made in the back streets of Nandi Fiji. Company searches in Fiji show Mrs Borgetti as the Director. Scurrah can go back to playing with a train set or get in the job seeker line with the rest of us. Ahhhh then there’s Stewie

Aagh that old Chestnut. Like in the early days when Godfrey announced he was the lowest paid CEO of almost any airline and he revealed his salary! Yet he didn’t tell people that he and Sherrard owned/part owned an offshore leasing company which leased aircraft to VB at a top rate. Plus he too had hands in the pie of the uniform supplier, then the GSE/PPU supplier! These CEO’s all have theirs (and their families) snouts in the trough. I know of another ‘airline CEO’ who has links to a plethora of Consultancies owned by family interests that provide, strategic, financial, audit and safety ‘services’ to the airline all at a premium price. And then there are the tenders and contracts!!!! The only ‘value adding’ is to the families own personal wealth. Meanwhile the minions and muppets who get their hands dirty are none the wiser and have the audacity to take offence at their Exexutives being criticised. Blind fools.

[TBM-Legend]

I don't suppose there's any chance of Sir Dick riding into the Alamo to save the day..


This has been a Richard Branson Ponzi scheme with John and Richard "Madeoff" pouring the Cool-aid.

Remember apart from his Royal Shortness pocketing $$$M's RB has benefitted to the tune of, I believe, $17M per year licencing fee for the "brand" that has lost her "innocence"!

This event is a very bad day for the believers and those who did their job not to mention suppliers etc who will get crucified in the wind-up.

[Paragraph377]

I don't suppose there's any chance of Sir Dick riding into the Alamo to save the day..
Why would he? His payday came the day the place was floated. He took his share, eventually sold it keeping around 10% equity as a ‘token measure’ and a way to con people into believing it was a good investment becuase Richard still had a stake in the company. All smoke and mirrors. Richard made $960m from the float. He couldn’t give a flying fu#k if the other 10% fell over. For an initial investment of around $8m out of pocket, he did very very well. The Master salesman creating hype and promising to make things fair and bring down ticket prices. Well, he did bring down ticket prices but it wasn’t because he gave a **** about the AN/QF duopoly, it was about himself. But the loyalists followed his every goofy prank, every crazy idea or silly challenge to other companies and they believed his mantra about ‘staff first, company second, profits third’. What an absolute load of bollocks. People might detest Alan Joyce, but at least you can see the parasite you are dealing with, not quite the same with the swinger from Necker Island. There are so many twists in the Virgin Blue story that so many never got to see.

[Hoosten]

All you can say is hang there. Many, many great fellas and girls there. Gut feel says that what remains will be picked up, let's hope this is the case.

It's a tough gig, I now think that most Australian airline pilots will experience this type of event in future (if they haven't already).

Whoever is charged with finding a buyer for Virgin Australia, there's two obvious places to start.
Virgin chief executive Paul Scurrah. The company's board is set to call in administrators following a meeting on Monday night Peter Braig

The first is BGH Capital, which already has a team and advisers working on the case (https://www.afr.com/street-talk/bgh-capital-lawyers-up-for-virgin-australia-accountants-at-close-call-20200419-p54l5d).

The second is another private equity player, which specialises in airline investments and whose interest in Virgin stretches back close to a decade.

That firm is Arizona-based Indigo Partners LLC, which is the owner of four low-cost airlines including Frontier Airlines in the United States, JetSMART (Chile), Volaris (Mexico) and Wizz Air (Hungary).

It is understood Indigo Partners' dealmakers have been sniffing around Virgin for years, but constantly hit hurdles in the shape of Virgin's jam-packed and stubborn share register and its big pile of debt which is now worth $5 billion.
Indigo Partners' tyrekicking hit a peak in 2015 when one-time strategic investor Air New Zealand was interested in selling its stake, sources said. Air New Zealand's investment peaked at 26 per cent and buying the Kiwi's shares would've been a quick way to become Virgin's biggest shareholder.

Indigo has remained around the hoop in the years since and with Virgin's difficult share register set to be erased and the debt reduced, it's expected to be back kicking tyres in no time.
Using COVID-19 to grow its portfolioInterestingly, Indigo Partners has made no secret it could use the COVID-19 inspired downturn to grow its portfolio. One of the firm's principals, Brian Franke, was recently quoted as saying: “Our airlines today are in good shape, but we are looking for opportunities at airlines that don’t have as strong a balance sheet.”

And with Virgin's board to call in the administrators following a meeting on Monday night - and cite solvency concerns, the Australian airline definitely fits into the not as strong balance sheet category.

Deloitte is expected to get the administration gig, while advisers are also flocking to the various groups of lenders. You have to worry about the retail bond investors, who only bought their notes late last year. Their trustee is AET, owned by Sargon Capital, which is also in administration.

As for Virgin's bankers, Morgan Stanley and UBS, we expect they'll be keeping close to Deloitte and spruiking their knowledge of the business and the field of potential.

Deloitte will no doubt want a quick deal in an effort to keep Virgin's business together, as much as is possible in light of government-enforced travel restrictions which have sunk the airline.

[TBM-Legend]

Why would he? His payday came the day the place was floated. He took his share, eventually sold it keeping around 10% equity as a ‘token measure’ and a way to con people into believing it was a good investment becuase Richard still had a stake in the company. All smoke and mirrors. Richard made $960m from the float. He couldn’t give a flying fu#k if the other 10% fell over. For an initial investment of around $8m out of pocket, he did very very well. The Master salesman creating hype and promising to make things fair and bring down ticket prices. Well, he did bring down ticket prices but it wasn’t because he gave a **** about the AN/QF duopoly, it was about himself. But the loyalists followed his every goofy prank, every crazy idea or silly challenge to other companies and they believed his mantra about ‘staff first, company second, profits third’. What an absolute load of bollocks. People might detest Alan Joyce, but at least you can see the parasite you are dealing with, not quite the same with the swinger from Necker Island. There are so many twists in the Virgin Blue story that so many never got to see.


Virgin Atlantic is on the ropes and "Bernie" Branson is asking UK Govt for a bailout...

[Sunfish]

The trick would perhaps need to be renegotiated lease contracts. I don’t know what Virgin is paying, but funding today is supposed to be cheap - almost zero rates. Fuel is now SFA as well. A voluntary administration may make it possible to break and renegotiate those leases and tap in to cheap money.

The person - legal/financial who could successfully run such a deal is not common and would expect to walk away personally with at least $100 million if they pull it off. This would only work if ALL lessors were convinced to buy into exactly the same deal on the understanding that no better deal is forthcoming and that the alternative is repossessing the jets or a fire sale.

...However given Boeing’s screw up with the Max, there may be a ready market for Virgins aircraft.

These are very stressful times, I hope you all come out of this smiling.

[International Trader]

I think that the only chance for something to come out of this is for an investor to make an acceptable offer for the AOC as a going concern with minimum aircraft( even 1) , infrastructure, technology and ground service but, only after securing deals for the State Government money , maybe some tax relief and airport access.
Ansett Mark 2/Tessna/ Non-Virgin.
Let's hope that these administrators have learned from the way Ansett was dragged out.
Unless this virus situation extends indefinitely, the conditions are right to start an operation.
The American investor would be the front runner with , perhaps with a local to come in ( like one or two of the major finance creditors, to get their agreement to the deal).
Needs major creditor approval but, it will probably be the only offer.
Just dependant on the creditors accepting their % of what $$ are left and, more $$ be left from an offer that comes now than one that comes later.
The Chinese airlines may try but, typical of their style, they will drag it out haggle to get the best price and they really couldn't run the operation as their airline system is still government controlled.
They don't come up with ideas, have few management skills and they basically do as they are told by the government.
The new entity will leave behind the debt, majority of aircraft and employees.
A restart of services will commence up and down the coast and maybe Perth with new deals for a number of same leased Virgin aircraft after new leases are negotiated with the owners, who would have repossessed the equipment..
It could come together but, it will basically start from day one again and don't expect low fares.
Good luck to all of those who have lost jobs and are left behind.

[Buster Hyman]

Let's hope that these administrators have learned from the way Ansett was dragged out.

Deloitte is not a start up company. They have no need to drag it out for 10 years.

[Wizofoz]

I recon the most valuable asset would be the Tiger AOC.

[Tommy Bahama]

Considering all the "smiles", "back slapping", "she'll be right mate" and "don't worry we've got your backs" from Virgin and Deloitte can someone explain why if its such a great idea this Voluntary Administration wasn't undertaken years ago?

The way its being promoted its all "fun in the sun". One would hope those who have far exceeded their station in life wont get away with it this time and will be held accountable.

[wheels_down]

I recon the most valuable asset would be the Tiger AOC.
Indigo Partners might be interested possibly. They have held stakes in Tiger previously

Airbus Crews most certainly on the standby ready to go.

[chookcooker]

Considering all the "smiles", "back slapping", "she'll be right mate" and "don't worry we've got your backs" from Virgin and Deloitte can someone explain why if its such a great idea this Voluntary Administration wasn't undertaken years ago?

The way its being promoted its all "fun in the sun". One would hope those who have far exceeded their station in life wont get away with it this time and will be held accountable.

because it’s a disaster for the current shareholders. You know, the ones who the board represents.
And you have to be near insolvent.

[B772]

I would not get too excited about the prospects for VA under administration. This financial meltdown has just started. It has some way to go before it hits the bottom. Delta may walk away from Virgin Atlantic to save themselves. Not unlike Air New Zealand did with Ansett. It looks like South African Airways will be next to bite the dust.

[Ragnor]

Watching PS interview they seemed positive of a full come back and no redundancy , or is he just saving face?

[Mach E Avelli]

Surely saving face. The definition of insanity is doing the same thing again and expecting a different outcome.
Whatever survives or is reincarnated out of this disaster, it won't be anywhere near as big, fly anywhere near as many routes, or employ anywhere near as many people.
.

[Servo]

The number of people on here, in the media and in public that wants to see Virgin Australia fail and 10,000 immediate staff plus 6000+ ancillary staff lose everything is disgusting. I hope you ALL suffer the same one day. You deserve it.

[B772]

The cost of fuel is paramount for airlines. As you may be aware the cost of crude oil is down overnight. If you can store it you can have it for nothing, a little like free money. You may be aware of negative interest rates for money. This is where the bank pay you to have it which is coming soon to a bank near you. After there was little interest in free oil overnight the price dropped to negative territory. If you can accept the oil you only get it for nothing we will pay you USD35 per barrel to take it off our hands.

[lucille]

You're wrong. Not a single person I know wants to see the 10,000 staff out of work. Arguing against what was effectively going to be a $1.4 billion dollar gift to the foreign owners does not mean people want to see VA staff lose their jobs. The fact is you were hostages in negotiations with the government who in the end refused to pay the ransom money.

That $1.4 billion "loan" was going to quickly end up in Abu Dhabi, Singapore, Beijing and Necker Island and allow them to minimize their losses. Three months down the track, your jobs were still going to be toast. Covid19 merely speeded up what was going to be an inevitable outcome - there was never any coming back from that $5 billion debt.

The best outcome now is that with voluntary administration, the slate gets wiped clean and the madness and incompetence of previous years management gets expunged and a new operator takes over and most jobs are returned. Everyone's fingers are crossed for this outcome. Meanwhile there is government assistance available for the short term, not great but better than nothing.

Importantly the government needs to step up be helpful and remove all their bureaucratic red tape and unnecessary costs to the new operator for the first few years of VA2

[SecretAngel]

Considering all the "smiles", "back slapping", "she'll be right mate" and "don't worry we've got your backs" from Virgin and Deloitte can someone explain why if its such a great idea this Voluntary Administration wasn't undertaken years ago?

The way its being promoted its all "fun in the sun". One would hope those who have far exceeded their station in life wont get away with it this time and will be held accountable.
Also, if a sufficient-but-small number of creditors object, they can force the company into liquidation - for example, if the creditors think they'll get a better return if the company and its assets are broken up and sold off, compared to if they take a haircut on their loans.

[t_cas]

Importantly the government needs to step up be helpful and remove all their bureaucratic red tape and unnecessary costs to the new operator for the first few years of VA2

This bit is what matters most.

[longjohn]

The number of people on here, in the media and in public that wants to see Virgin Australia fail and 10,000 immediate staff plus 6000+ ancillary staff lose everything is disgusting. I hope you ALL suffer the same one day. You deserve it.

You may find a number already have.
You may also find that Virgin played a part in that.
You may also find that unlike Virgin people in 2001, QF and others will not be holding hangar parties.

[TWOTBAGS]

Please everyone take a breath.
A few weeks back I said in a different thread how everything has changed permanently. Now it has. Many many people are affected by this and the VA group are just 2% of the total put out in the last month.

The sun will still come up and the way things were are no longer, having lived through and airline shut downs from both sides of the fence and been wiped out, this is going to hurt, but its not all over for everyone.

VA's will be rebirthed as a leaner beast most probably under the Tiger AOC with 737's only VAH will continue in administration as long as the administrator funds are paid and I believe they made application to the high court this morning to have $35M of VA's cash reserves allocated to the administration. VARA will be pumped for cash but its worth nothing except the value of its contracts to run, the A320s are leased and the F100's need refleeting in the next few years, getting more F100's a few years ago was nothing more than kicking the can down the road...… that can has now gone down a drain.

While a lot of people here are pleading for investors because they have vested interests in VA being airborne, there are just as many that have interests in VAH being sunk and the debt never coming back. The key here people is who controls the debt and where is the market.

At this point in time, given there is a $160M+ lifeline from the Govt out there that should be the best indicator that any company cant see enough seats to stay alive...… so where is the market? At this point gone, macroeconomic factors point towards a big recession that will be the likes of SARS and GFC combined, 800,000+ bread winners out of pocket and there is the true picture of discretionary spending.

SRB running about saying "we'll be back & its just the beginning" makes me think he's dropped a bit too much acid while in lockdown, and PS saying we've dropped airfares 37%...…. and without us it will go back up …. yes and rightly bloody so ! because if you had banked some of the funds.... (and paid tax on it....maybe if they had put into the economy as a corporation then they would get help out) then you might not be trying to decide if you could afford the lube that is coming with that pineapple or not.

Either way, when the cab fare to the airport is more than the cost of the flight something is wrong, very wrong and now is where the story concludes.

This is the flush the bowl needed, there will be pain sure, but a fresh lavender smell afterwards and maybe, just maybe some in management will realise that there is no volume because the punters don't have jobs and they will be after yield and people will pay what they should have. Domestic travel in the US is not cheap so what is it here. Do we need 20 flights a day between ports on the J curve?? certainly not now, hopefully not again.

This is the harsh reality of what we face industry wide. But please don't ever think you are alone, and I can tell you right now there are people doing it a lot worse than you are.

[Buster Hyman]

I think it will smell more like Glenn 20 mate.

[Ascend Charlie]

Well said T-Bags.

[halas]

The number of people on here, in the media and in public that wants to see Virgin Australia fail and 10,000 immediate staff plus 6000+ ancillary staff lose everything is disgusting. I hope you ALL suffer the same one day. You deserve it.

Yep. Been there done that. No thanks.

And to KordaMentha. Get stuffed.

halas

[John Citizen]

The number of people on here, in the media and in public that wants to see Virgin Australia fail and 10,000 immediate staff plus 6000+ ancillary staff lose everything is disgusting. I hope you ALL suffer the same one day. You deserve it.

Exactly right. About 10 years ago when it looked like Qantas will be making pilots redundant I witnessed other people very happy about it. As you said, be careful what you wish for.

Myself, for all the good people there, I sincerely hope Virgin survives.

[dragon man]

Not only do I think Virgin will survive but it will prosper, especially if purchased by Macquarie Bank or Wesfarmers. Alan Joyce’s worst nightmare. Karma.

[catseye]

I agree. IF you could pick it up without the Virgin baggage it would be a good operation. Bit like KD and ZL when AN packed up

[virginexcess]

The business is going to survive, that’s reasonably clear. The question is what will it look like. No job losses seems like a bit of a pipe dream, but remember all of tiger and all of VANZ have already been made redundant, so it is not inconceivable that the remaining staff can be held onto. Speculation would suggest the 330’s are done, but there leases can now be renegotiated, so they may have another lease of life yet. Against that is the businesses stated objective to have a single type wide body fleet, so it wouldn’t make much sense to fight to keep two.

unlikey, but plausible that the RIN as a result of redundancies may provide enough space to absorb 330 Pilots. I can’t see it, but it’s not out of the question. In any case none of these issues are questions for the administrators or current execs. The new owners will call those shots. Pretty clearly though, Deloitte have been selected because their preference is to save jobs, not break it up. Again though, that will be a decision for the new owners.

[dragon man]

Meanwhile at Qantas Alan will have to find the money to make both pilots and FAs redundant and deal with an inappropriate fleet internationally while his main cash cow (domestic) is under the pump from a reinvigorated Virgin.

[Half Baked]

Meanwhile at Qantas Alan will have to find the money to make both pilots and FAs redundant and deal with an inappropriate fleet internationally while his main cash cow (domestic) is under the pump from a reinvigorated Virgin.

Wow!

Is that a bong or 3 paper you guys are smokin......... I want some!!

[dragon man]

Neither, why do you think he has been so quiet the last 3 weeks? This hasn’t panned out the way he wanted.

[Ollie Onion]

Well if Voluntary Administration is going to result in a better and brighter Virgin operation like some are suggesting perhaps Qantas should do the same.... I mean it seems to be the logical choice. Why aren’t more companies doing it?

I reckon Alan has been quiet as he got a smack on the hand for some of the statements he made, also he is busy trying to figure out how to ramp things up again and how many jobs, if any, that are going to go and when.

[galdian]

Meanwhile at Qantas Alan will have to find the money to make both pilots and FAs redundant and deal with an inappropriate fleet internationally while his main cash cow (domestic) is under the pump from a reinvigorated Virgin.

Well that puts the Christian religion in a pickle now, apparently the Second Coming has just happened, its name is Deloitte and within 24 hours of going into VolAdmin its all sorted, back to normal with an unlimited potential for the future!
As a bonus QF and AJ are done and dusted! :ok:

Seriously??
Now and the weeks ahead is when Deloitte REALLY find out what they have to deal with, if anyone thinks there won't be surprises for the Administrators as they delve further they're kidding themselves IMHO.

I DO believe VA potentially in a better position than AN was some 19 years ago however arguably the CO19 crap and international economic carnage it's dealt make the future less guessable than in AN days.

Best of luck to a good outcome for VA but anyone reckoning they know the outcome - when the crapshoot's just beginning and Deloitte's just starting - is a brave individual indeed.
Or full of bull****! ;)

Cheers.

[Section28- BE]

So- since 9/11, unprecedented Stability/Market go-forward/Run- HOW the fcuk, can 'All' this be 'SO'..............., 3x weeks In- NIL Brass....????

Alan- was in AN, a given/un-contestable fact (network- &/or some-such...., ask Geoff???), but- over 'That' elapsed time- WHAT the freek, 'have' you folk all Been Doing....????

Good Luck ALL
Rgds
S28- BE

[Dookie on Drums]

I don't understand why so many are jumping to conclusions when the fat lady hasn't even sung yet? Getting your hopes up only to possibly have them crushed will hit you doubly hard.

Expect the worst, hope for the best.

[hoss]

S28- BE,

Mate, thanks for writing out the YSSY ATIS again, let’s set up for 16L, flaps 30, wind correction 5 and auto brake 2!

😉

[Section28- BE]

Hoss- Not a Drama mate............. Rock-On Brother!!!!

[hoss]

Is that code for ‘there’s a C-206 job going at Ayers Rock’?

🙂

[Section28- BE]

Yup- Ring Betoota Airlines, 'they' shall sort you............., all good.

[MonsterC01]

The problem with voluntary Administration Ollie is that the board (ie the major share holders) have to agree to it. By agreeing to it you are essentially agreeing to reducing your equity value in the business to zero. So by agreeing to enter voluntary administration Etihad, Singapore, HNA, Nanshan and Branson have effectively agreed to walk away with nothing after pumping in excess of 6 Billion into the business over the years. So I doubt they’d agree that it’s such a great option! But they just don’t have the money Virgin needs as they’re all dealing with their own problems right now.

The reason it might work out well for Virgin right now is that the entire Aviation industry is hurting right now. So aircraft lessors, airport authorities, creditors etc will be much more willing to work with the administrators right now as they have no where else to go themselves. If times were good and aviation was booming it might be a very different story.

Not saying it’s going to be all skittles and rainbows for Virgin going thru this, as they now have no control over the outcome. It’s going to end up being whatever the administrators and future owners want it to be. That could well mean more redundancy’s or the businesses being broken up and sold off piecemeal.

[B772]

Dragon Man. It appears Deloitte's has taken a charge over VA cash for $35M to cover administration fees and charges.

[Ollie Onion]

I agree, in this case Voluntary Admin may well result in Virgin being able to trade out of this situation. I just think the people saying that this is a great result and will end up with a bigger better airline with no losses that will make Qantas shake in their boots is verging on insane. Being hopeful is good, a leaner and better carrier out of this is good for everyone but it is not an ‘easy’ way out.

[dragon man]

Dragon Man. It appears Deloitte's has taken a charge over VA cash for $35M to cover administration fees and charges.

Sounds about right.

[Paragraph377]

I reckon Alan has been quiet as he got a smack on the hand for some of the statements he made, also he is busy trying to figure out how to ramp things up again and how many jobs, if any, that are going to go and when.
The smack on the hand was nothing. A non-event. Alan wouldn’t have even blinked. However, you are correct that the silence is deafening. The reason is simple; VA may have gone into Administration and the Irish toad obviously will be looking at post COVID strategies, but he also has an airline that is bleeding daily, potentially to the tune of $6m or more per day. If the current crisis was to continue for say another 6 months unabated, QF will be in their own depth of ****. QF are hurting too, make no mistake about that. They are just fortunate that they are a bigger entity with a few more shekels in the bank. But that doesn’t provide them with ‘business immunity’. This game has a long way to play out yet. But rest assured QF aren’t getting a free roll of the dice to pass Go and collect $200. Quite simply the spotlight is all over VA at the moment. If a decent investigative journalist or people in general started poking around the fringes of the Rat I think you will find that not all is peaches and cream.

[virginexcess]

I agree, in this case Voluntary Admin may well result in Virgin being able to trade out of this situation. I just think the people saying that this is a great result and will end up with a bigger better airline with no losses that will make Qantas shake in their boots is verging on insane. Being hopeful is good, a leaner and better carrier out of this is good for everyone but it is not an ‘easy’ way out.

I don't think anyone is suggesting it will be bigger. But I don't think you need to be an accountant to work out that if there's maybe $3bn less debt ($240m saved in interest payments). 330 leases wiped. I don't know the figure on that but I've heard they lose the company in the vicinity of 30-40m per year. 1300 employees redundant already, another $13m on the bottom line. Maybe 20 x 737 airframes gone with the axing of VANZ. A320 fleet gone from Tiger. Pretty easily you can see $300m in savings straight up. Scurrah has been talking between 300 to 400m in cost reductions are possible. Yep, there will be less airframes, but will there be an equivalent drop in revenue. I suspect not. Unprofitable routes will also be axed. The company had already withdrawn from Hong Kong, so it's not as if there isn't already a deep understanding of where the problems are and a fair bit of action has already been taken. In fact pre 'rona predictions were for a return to profitability despite having the current debt burden.

It's pretty easy to present a cogent argument that resturctured and unburdened from a significant amount of debt, Virgin will absolutley be profitable. I would like to say "and quickly" but that will be dependent on how the climb out of lockdown is managed, along with the publics appetite to be jammed into an aluminium tube with 180 other Covid-19 transportation units..

The question is probably not if it will be profitable, but more likely will the profit be well managed, or pissed away on McLaren's, as it has been in the past. And that wasn't even profit.
Counter that against Qantas who will have a very large wide body fleeet sitting around idle for 12 months hoovering up spare cash, and you can also see pretty easily that if domestic airtravel doesn't return to normal quickly, and the borders remain shut for 12 months, Qantas could very easily be in a cash poor position, and the topic of administration could be more than just a thread on Pprune. Elaine didn't run straight to the market and borrow a billion for the fun of it. He thinks he might need it. And of course you're aware that billion is debt. The same sort of debt that Virgin has. Just not as much of it. Yet.
The most likely outcome at this stage is, barring mass stupidity from the australlian public, a controlled return to the new normal over the next 6 months, with a competitive Virgin lite keeping the incumbent market leader honest.

[dr dre]

Meanwhile at Qantas Alan will have to find the money to make both pilots and FAs redundant and deal with an inappropriate fleet internationally while his main cash cow (domestic) is under the pump from a reinvigorated Virgin.

Not really. No international staff have to be made redundant, they will be held on indefinite stand down until flying resumes. It costs a tiny bit to keep the aircraft maintenance status current. QF Domestic will remain the market leader, especially with FF who'll be reluctant to spend in an airline close to the brink, and a VA that concentrates on core routes will allow more minor routes to become QF monopolies. A slimmed down Virgin will remain, but I'd say the process for that to happen will take months, probably a year.

[ECAMACTIONSCOMPLETE]

Is the majority of QFs international fleet owned? That’ll only cost them depreciation on those assets, unlike leasing costs which of course is outgoing cash.

[Pearly White]

Agree. I can’t get my head around the arguments that VA isn’t Australian enough, not worthy of a government loan and should look to the market. But at the same time if VA goes to the market and gets Chinese money, well then that’s bad because it’s too Australian.
Isn't it just racist then? It's OK if it's owned by an international conglomerate of Gulf, British and Asian interests, but not if it's majority Chinese owned?

The FIRB should be about WHETHER it's strategically sound for an Australian entity (Virgin Aus IS an Australian business, regardless of the nationality of the shareholders) to be sold to foreign interest at all first, then WHICH foreign interests, i.e. in terms of our diplomatic and strategic alliances should be a secondary, albeit still vitally important consideration.

[ifylofd]

Years of swilling pig snouts in the trough.
The little italian couldn't run a line through a sentence, much less run an airline.
The same board continues to preside over the mess they have created and essentially condoned for a decade.
Scurrah intentions solid, but even then the changes needed will only occur as a result of vol admin.
Too many of the cult members seriously think drinking from the kool aid will make it all better. Legacy of the little italian and his groupies.
Federal government not willing to assist, but happy to spend 600-700 million of taxpayer $$'s under the F.E.G. to pay workers entitlements under liquidation scenario.
Federal government failing the airline aviation / tourism sectors dismally, as it's not a matter of if, just when, the little irish POS, will have his little hand out as well.

Guess that will be a different story then, for the 40% foreign owned national flag carrier.

[ifylofd]

I don't think anyone is suggesting it will be bigger. But I don't think you need to be an accountant to work out that if there's maybe $3bn less debt ($240m saved in interest payments). 330 leases wiped. I don't know the figure on that but I've heard they lose the company in the vicinity of 30-40m per year. 1300 employees redundant already, another $13m on the bottom line. Maybe 20 x 737 airframes gone with the axing of VANZ. A320 fleet gone from Tiger. Pretty easily you can see $300m in savings straight up. Scurrah has been talking between 300 to 400m in cost reductions are possible. Yep, there will be less airframes, but will there be an equivalent drop in revenue. I suspect not. Unprofitable routes will also be axed. The company had already withdrawn from Hong Kong, so it's not as if there isn't already a deep understanding of where the problems are and a fair bit of action has already been taken. In fact pre 'rona predictions were for a return to profitability despite having the current debt burden.

It's pretty easy to present a cogent argument that resturctured and unburdened from a significant amount of debt, Virgin will absolutley be profitable. I would like to say "and quickly" but that will be dependent on how the climb out of lockdown is managed, along with the publics appetite to be jammed into an aluminium tube with 180 other Covid-19 transportation units..

The question is probably not if it will be profitable, but more likely will the profit be well managed, or pissed away on McLaren's, as it has been in the past. And that wasn't even profit.
Counter that against Qantas who will have a very large wide body fleeet sitting around idle for 12 months hoovering up spare cash, and you can also see pretty easily that if domestic airtravel doesn't return to normal quickly, and the borders remain shut for 12 months, Qantas could very easily be in a cash poor position, and the topic of administration could be more than just a thread on Pprune. Elaine didn't run straight to the market and borrow a billion for the fun of it. He thinks he might need it. And of course you're aware that billion is debt. The same sort of debt that Virgin has. Just not as much of it. Yet.
The most likely outcome at this stage is, barring mass stupidity from the australlian public, a controlled return to the new normal over the next 6 months, with a competitive Virgin lite keeping the incumbent market leader honest.
Well said.
And therein lies the issue for the little irish, international borders remaining closed will be a FAR greater issue for the Q group going forward. Suppose it's why the POS has been so hell bent on destruction of VA.

[Sunfish]

The first thing Deloitte will do is a full set of management accounts that are warts and all honest. Until they are prepared, no body knows what the state of play is. There may be some surprises. This accounts will have a rigorous contribution analysis (Revenue minus variable costs) to indicate which fleets/sectors, etc. are paying their way by making a contribution to fixed costs as well as profit. I you don’t do that first, you might chop off the wrong bits.

I can think of two reasons VB wasn’t bailed out and “foreign ownership “ isn’t one of them - remember these pricks are buying submarines from France.;

1. QF and the rest would have formed a queue behind it.

2. The economic high priests in Treasury and PM&C hold that Australia can only afford one airline - because of the economy of scale arguments they were taught at ANU.

Of the two reasons, (2) is more deadly because these bastards will stop at nothing to prove that their theories, on which they have built their careers, are correct. They are the reason we have so little manufacturing here. They were taught we are a farm and a mine under the doctrine of competitive advantage. Their next battle will be to prevent forgiveness of AsA and other Commonwealth charges which VB will inevitably ask for on the grounds that “it sends the wrong signal” to industry. I pleaded with some of these clowns for a bailout when Ansett went under and was told to go back to my cubicle and shut up for exactly this reason.

Qantas will be doing everything in their power, ethical or not, to support the acolytes of (2). That has probably already started with private briefings to selected public servants on “The structure of the Australian Airline Industry Post Pandemic” which will of course be self serving and have no place for VB. Watch out for new “talking points” from the likes of GT, Ministers and Public Servants, they will come from those briefings.

Qantas will be practicing matrix marketing management aimed at Government right now with the lunches and the odd Chairman’s lounge invitation thrown in - when social distancing makes it possible of course. They will know exactly who all the decision makers are and will assiduously play off each against the other to get what they want.

The reason AJ is silent is that he is working hard to grease the skids under VB, as he should as a responsible CEO.

[Sunfish]

Further to my last post, right on cue, here comes the ABC with some talking points! I wonder who set up the “deep background” for this one? The message? Virgin is a bad business that won’t survive.

Virgin Australia shows again that this nation can't sustain two airlines It was a throwaway line in a different time.

Former Qantas boss Geoff Dixon, who took over running Qantas just months before the demise of Ansett Airlines, was under no illusions about the difficulties facing a second carrier.
"The problem with the Australian market is that it's big enough for probably one-and-a-half airlines," he quipped privately, years later.




https://www.abc.net.au/news/2020-04-22/virgin-shows-again-that-australia-cannot-sustain-two-airlines/12169620

[Sunfish]

And this one. Journalists are lazy. Someone is feeding them. The negative message here is that government has already done enough. Virgin is greedy.

The Government doesn't want Virgin Australia to go the way of Ansett, so why won't it hand over more cash?On March 31, Virgin went into a trading halt (https://www.abc.net.au/news/2020-03-31/virgin-seeks-coronavirus-bailout-qantas-warns-against-payouts/12105654) and confirmed it had asked the Federal Government for $1.4 billion to help it get through the pandemic.

Ultimately, the Government's line was that it is "not in the business of owning an airline".

Part of the reason the Federal Government gave for its reluctance to offer Virgin a loan was that it had already funded more than $1 billion worth of assistance for the airline sector.
Coronavirus update: Follow the latest news in our daily wrap. (https://www.abc.net.au/news/2020-04-21/coronavirus-update-australia-covid-19-china-national-cabinet/12166842)

That included waiving fees for fuel excise and security screening charges, as well as for select regional routes and last week's announcement that the Government would underwrite the cost to resume some domestic routes (https://www.abc.net.au/news/2020-04-16/virgin-australia-to-resume-flights-after-coronavirus-suspension/12155466).

Remarking on the company going into voluntary administration on Tuesday morning, Deputy Prime Minister Michael McCormack noted Virgin had been able to access most of the money already on the table.

"Virgin has been able to access the initial announcement, where $715 million was put on the table by way of waving fees when it comes to fuel excise, Airservices Australia charges and such things as security screening," he said.

Mr McCormack said Mr Scurrah had told him Virgin had benefited from those announcements to the tune of tens of millions of dollars.



https://www.abc.net.au/news/2020-04-21/virgin-australia-bailout-what-the-government-has-said/12169952

[Des Dimona]

This is a more sobering and realistic assessment of the the path ahead by Ian Verrender:

https://www.abc.net.au/news/2020-04-22/virgin-shows-again-that-australia-cannot-sustain-two-airlines/12169620

[Sunfish]

Des, that’s the same one I posted. It has no substance whatsoever. Simply an assertion that Australia can’t support two airlines. Ever heard of predatory pricing? That is what Qantas did to each competitor in turn.

[TACQANAVIAVEC]

You don't have to be an ANU graduate as the evidence is pretty compelling our market is still not big enough for two profitable airlines running a full domestic network. In 20 years VA has lost more money than its made both as a low cost carrier and as a full service airline so it's hards to argue against the numbers and although you can blame JB and his team ultimately any other management team would have not faired much better.

Also theres plenty of evidence "foreign ownership" specially from a Chinese entity was a major driver for the GOV not to step in, just randomly view any youtube video with VA news and read the comments section, is is clear Ozzies were well aware of this fact and bailing out "foreign airlines" was not going to be a vote wining venture even in good times..

[TACQANAVIAVEC]

People here seem oblivious "Private equity" firms are all about, they are sharks who prey on the carcasses of failing business only to pick them up for cheap, dress them up and put some make up, having devouring their inners they then sell the dead carcass to unsuspecting investors though the stock market.

[Des Dimona]

Sunfish - disagree.

The discussion around realistic results and expectation after administration is definitely one of substance.

[The Bullwinkle]

although you can blame JB and his team ultimately any other management team would have not faired much better.
Rubbish! Anybody with a focus on their own business rather than a vengeful obsession with their previous employer would have done quite well.

[dr dre]

Also theres plenty of evidence "foreign ownership" specially from a Chinese entity was a major driver for the GOV not to step in, just randomly view any youtube video with VA news and read the comments section, is is clear Ozzies were well aware of this fact and bailing out "foreign airlines" was not going to be a vote wining venture even in good times..

Just a word of advice, I wouldn’t take the comment section of a YouTube video (or the comment section of anything) to be a fair barometer of opinion. Not only do the actual people who comment on videos seemingly have an agenda, a lot of them are corrupted by bots and troll farms. Especially if videos about an Australian airline are flooded with comments of anti-foreigner sentiment.

[Sunfish]

Des, Qantas subsidizes Jetstar so it is selling tickets at less than the cost of production. It does this to nail VA. This is called predatory pricing and is illegal under trade practices law. QF gets away with it because the ACCC is toothless and QF have too much political clout. Furthermore nobody with necessary aviation forensic accounting skills would risk their career to do the required analysis. We had this discussion years ago.

[Ragnor]

Des, Qantas subsidizes Jetstar so it is selling tickets at less than the cost of production. It does this to nail VA. This is called predatory pricing and is illegal under trade practices law. QF gets away with it because the ACCC is toothless and QF have too much political clout. Furthermore nobody with necessary aviation forensic accounting skills would risk their career to do the required analysis. We had this discussion years ago.

The problem is what with this? VA and Tiger were doing the same to us they just couldn’t pull it off. I’m not entirely sure that QF subsidise JQ tickets

[Sunfish]

Entrust, I cannot read the article but it looks promising if the muzzle is applied to QF. All the States are now painfully aware of what airline schedules and services can do for their economies.

[TACQANAVIAVEC]

You may be right and to what extent QF subsidises JQ is unknown, in all fairness they wouldn't have too if they wouldn't have to compete agains tree large government subsidised middle east carriers who don't seem to have an issue with flooding Australian skies with empty planes.

It's is fairly well know QF makes the bulk of its profits from its domestic arm and to an extend these subsidise its international operations, so I don't blame them for doing what it takes to enable them to be profitable. In the end the root of these inefficiencies lie in not allowing for a "true free market" where everyone can compete on a level playing field, ultimately this is at the expense of our local aviation industry.

[Buster Hyman]

Interesting to see Linfox at it again. He almost got TT but having missed out, he's circling the Mothership now! Still searching for his AVV based airline.

[Tommy Bahama]

It would appear the poor bond holders who parted with their cash back in Nov are going to start to make some noises.....Legal firms appointed.

[BNEA320]

so what about this scenario.

A revived VA, called whatever
(spirit of OZ the flying wallaby seen on another forum, sounds great)

, flies only golden triangle VERY frequently & CBR & PER with cheap leases & only 2 class B738s & staff on less pay than they were getting at old VA.

Crews to do only day trips. No expensive overnights anywhere.

Qantas ****s themselves, as then stuck between a rock & a hard place.

Alliance takes over VARA & flies their F70/F100s hard on FIFO & on thin regional routes & maybe even some flights into MEB. Are their any other F70/F100s around Alliance could grab hold of? (what's biggest aircraft that currently allowed to fly into Essendon currently ? F100 ? or B717 ?)

Even if didn't ever actually fly to MEB, it would mean a big negotiating tool to get costs at MEL down to rock bottom.

Regional routes perhaps subsidised to some degree, by all levels of govt, to make them viable &/or very early/very late flights, when aircraft not being used on profitable routes. Hotels in regions like CNS, TSV have to adjust their check in check out times.

SYD curfew might have to go away for 12 months, as to get capacity back asap, there might have be some earlier/later flights in & out of SYD, which is where most of the cheap seats will be, along with middle of the day not peak hour Mon-Fri. (aircraft can't be in 2 places at once)

If SYD curfew not gone, then relaxed, with no fines whatsoever, for being a few minutes after 2300.
(it's crazy that a pax has to fake a heart attack to get aircraft to land at SYD at 2301 without airline getting some massive fine)

A realistic schedule could be shown to govts & when things like weather cause havoc, aircraft just land & take off after 2300 with no debate, otherwise no airline wants to plan to land after 2100 & get stuck at SYD. Similarly airlines could plan to take off at 2259 & sometimes that might end up being 2359.


There might be some very high utilisation of aircraft & need no curfew at SYD if F70s/F100s flying there as delays are ok, but not when a stupid curfew to factor in.
(vaguely remember after SEP 11, domestic flights at all hours into BNE, SYD, MEL)

VA international either gone or severely cut back to AKL, ZQN, some flights to Fiji (instead of 7-8 flights per week from BNE, SYD & MEL, maybe 2-4 days a week).

LAX ?

Air NZ/Jetstar to pick up trans tasman capacity.

Fiji air(FJ) to increase flights Australia to Fiji, because they'd have to, to bring tourists to Fiji (do they exist for any other reason) Maybe FJ overnight an aircraft at BNE & MEL some nights a week, like at SYD, as previous VA schedules suited Fiji holiday makers better, than FJ schedules.

Air Vanuatu to increase flights to Australia, maybe using Air Kiribati new aircraft, rather than Nauru's very old 733s.

Solomons ? VA should have dropped HIR long ago.

Bali ?

Did VA actually make money flying to DPS ?

DPS demand will surely drop, at least initially due to heightened health concerns.

Where else did VA flying Int ? Tassy ?

It's probably a very good time for airlines to get concessions out of govts/airports, rather than handouts.

[rmm]

flies only golden triangle VERY frequently & CBR & PER with cheap leases

I'd imagine the same rules would apply to a reborn Virgin re capacity dumping. Given the long recovery lead time, they maybe flying 20 - 30 pax frequently. Hardly worth it.
QF could fly the same with "owned metal", no leasing costs involved. Can't see your MEB happening.

[Johhny Utah]

You lost me at “Qantas ****s themselves, as then stuck between a rock & a hard place.....”

as Pauline Hanson would say: “Please explain?”

[Section28- BE]

Buster-

"Interesting to see Linfox at it again."

Oh Goody- the band is all here/& back together......

Rgds
S28- BE

[Ollie Onion]

Yes, I am sure Qantas is quaking in their boots with the only domestic competition being virtually insolvent. I doubt Qantas is dedicating much time at all to what Virgin is up too, their campaign for no government bailout was successful and they are now figuring out how to keep themselves in business. On a town hall last week we were told Qantas Group can stay grounded for 12 months with current cashflow, that was before the limited domestic schedule restarting. Domestic Oz and NZ likely restarting within the next 4 weeks with perhaps some Tasman in June. So I don’t think Qantas is ready to string themselves up just yet, they will be making a market share grab whilst Air NZ and Virgin are otherwise distracted.

[BNEA320]

You lost me at “Qantas ****s themselves, as then stuck between a rock & a hard place.....”

as Pauline Hanson would say: “Please explain?”
new airline would probably have a much lower cost base, with cheaper staff, cheaper aircraft & only a single aircraft type.

A huge % of profits come from golden triangle.

Qantas does not want to get into a price war. New airline would be giving away heaps to get corporates on board.

[BNEA320]

Yes, I am sure Qantas is quaking in their boots with the only domestic competition being virtually insolvent. I doubt Qantas is dedicating much time at all to what Virgin is up too, their campaign for no government bailout was successful and they are now figuring out how to keep themselves in business. On a town hall last week we were told Qantas Group can stay grounded for 12 months with current cashflow, that was before the limited domestic schedule restarting. Domestic Oz and NZ likely restarting within the next 4 weeks with perhaps some Tasman in June. So I don’t think Qantas is ready to string themselves up just yet, they will be making a market share grab whilst Air NZ and Virgin are otherwise distracted.
QF should be quaking in their boots.
New airline, if run by likes of Indigo, will probably be hedging fuel & all other costs much lower than qantas. Any ex VA staff who think they will get paid anything like what they were getting are dreaming. They'll probably work more for less. Those who don't like that, don't need to apply.

If newby goes where the money is, they can't loose. Qantas can't easily lower their staffing costs.

Qantas are stuck with highly paid staff & a very mixed fleet. International might be slower to take off than domestic, which favours newby.

Golden triangle is called golden for a reason.

[hotnhigh]

I was going to start with one word 320, deluded. However, I might as well continue.....if it was just so easy. The corporates, ie. the higher yielding mob want consistency of service, more than two flights to choose from, a lounge and points. I think virgin will come out the other end with a refocus on what’s important, but if you think the recipe you have described will bring instant success, I beg to differ.
The higher yielding punters won’t be bothered with the risk to begin with. It will take a long time to regain confidence and forward bookings.

[halas]

BNEA320

You seem to be describing Virgin Blue in your narrative.

halas

[crosscutter]

Reborn Virgin’s international conundrum (https://www.afr.com/chanticleer/reborn-virgins-international-conundrum-20200422-p54m3s)
Simply lopping off Virgin's international arm and focusing on the most profitable domestic routes isn't as easy as it seems. The optimistic spin put on Virgin Australia’s collapse by the government, the administrator and the company’s chief executive, Paul Scurrah, is understandable.
With so many jobs on the line, and the national interest to be protected, it’s in everyone’s interest that a reborn airline emerges with a relatively clean slate, restructured operations and a hell of a lot less debt.

The dominant narrative suggests Virgin could prosper with a "less is more" mindset (https://www.afr.com/link/follow-20180101-p54ltx). By ditching its loss-making international operations and carefully selecting the domestic routes it flies, the new Virgin would be a more focused, profitable entity.
Refocusing Virgin isn't as easy as many might think. But in the airline game, nothing is quite as simple as it seems. Chanticleer’s discussions with former airline executives and insiders suggest the seemingly simple, slim-down strategy isn’t so simple at all.

What makes airlines so difficult to turn a dollar from is that the sector must balance extraordinarily high fixed costs – basically 30 per cent aircraft, 30 per cent people and 30 per cent fuel – with revenue that is particularly volatile to price movements (raise your prices and people stop flying very quickly) and economic conditions.
And that’s the steady-state business model. On top of that airlines need to deal from time to time with the fallout from freak accidents, terrorist attacks, volcanic ash clouds (https://www.afr.com/link/follow-20180101-h120h4), international incidents and, of course, the odd pandemic.

While Virgin’s poor profitability over the past decade has been well documented, its divisional results do tend to fit the narrative that the best solution is to refocus the airline on the domestic market.

While group earnings before interest and tax (EBIT) for Virgin in financial 2019 totalled $89.5 million, domestic EBIT was $133.4 million, and EBIT from the Velocity loyalty program was $122.2 million. By comparison, Virgin’s international business lost $75.6 million, and its low-cost offshoot, Tiger Airways, lost $45 million.

The surgery necessary looks pretty obvious.

But some observes suggest simply killing the international arm would make Virgin far less attractive to Australia’s corporate travellers, who offer much better margins than leisure travellers.

Virgin doesn’t necessarily have to fly international routes itself to provide corporate customers with an international offering; agreements with foreign airlines via international alliances and code-sharing deals (including access to good quality lounges in overseas airports) would do the job, with lower costs and less risk.

But insiders say these agreements can be tricky. International travel is notoriously competitive, and foreign airlines will often pressure domestic carriers to push travellers towards their home countries.

As one former executive says, if Virgin wants to keep any international exposure, it will likely need to deal with one or more of the 600-pound gorillas that dominate international aviation – which, of course, has long been one of its problems, given it has previously had as many as five foreign airlines on its share registry.

The suggestion that Virgin will be able to pick and choose what domestic routes it flies doesn’t necessarily stand up to scrutiny either.

Observers suggest the rational competitive response to that strategy is to take what the airline industry calls a matrix pricing approach. That is, Qantas would be likely to drop prices on the routes where it is competing fiercely with Virgin, and raise prices on the routes where there is no competition.

Virgin may have little choice then but to match Qantas on all significant routes, which would, of course, limit its ability to bring its fixed cost base down.

Prime Minister Scott Morrison said on Tuesday that it was important that the new Virgin is "not crushed by any anti-competitive actions that may be put in place by another player in the market (https://www.afr.com/politics/federal/accc-to-watch-qantas-as-virgin-fights-to-survive-20200421-p54lne)" but exactly what regulatory framework the government would be prepared to put in place isn't clear. Price caps or profit caps on specific routes seem pretty unlikely.

No doubt the interested parties that have apparently flooded administrator Vaughan Strawbridge in recent days are working through the combinations and permutations that might work for a reborn Virgin.

But the central conundrum investors will need to get to grips with is around the question of an international arm. Would a domestic-only airline have the scale to be sustainably profitable if it doesn’t have an international offering, and so can’t attract as many high-margin corporate passengers?

Finding the middle road – something between the unprofitable Virgin Australia and its far more profitable forerunner, Virgin Blue – looks the best bet.

But it’s won’t be an easy task, and its why potential owners will want government support.

[BNEA320]

I was going to start with one word 320, deluded. However, I might as well continue.....if it was just so easy. The corporates, ie. the higher yielding mob want consistency of service, more than two flights to choose from, a lounge and points. I think virgin will come out the other end with a refocus on what’s important, but if you think the recipe you have described will bring instant success, I beg to differ.
The higher yielding punters won’t be bothered with the risk to begin with. It will take a long time to regain confidence and forward bookings.one word
RECESSION

If new airline has as many flights say BNE/SYD, SYD/MEL & MEL/BNE as QF & work out cheaper, many corporate travel managers will be getting staff to fly the cheapest full service option, ie. new airline, but not junkstar, as not enough frequency for disrupts.

New airline could have exactly the same everything as QF, as least for BNE, SYD & MEL but much lower cost base.

SO higher yielding punters, will bother with QF who nearly went belly up 7 years ago ?

[BNEA320]

Reborn Virgin’s international conundrumSimply lopping off Virgin's international arm and focusing on the most profitable domestic routes isn't as easy as it seems. The optimistic spin put on Virgin Australia’s collapse by the government, the administrator and the company’s chief executive, Paul Scurrah, is understandable.
With so many jobs on the line, and the national interest to be protected, it’s in everyone’s interest that a reborn airline emerges with a relatively clean slate, restructured operations and a hell of a lot less debt.

The dominant narrative suggests Virgin could prosper with a "less is more" mindset (https://www.afr.com/link/follow-20180101-p54ltx). By ditching its loss-making international operations and carefully selecting the domestic routes it flies, the new Virgin would be a more focused, profitable entity.
Refocusing Virgin isn't as easy as many might think. But in the airline game, nothing is quite as simple as it seems. Chanticleer’s discussions with former airline executives and insiders suggest the seemingly simple, slim-down strategy isn’t so simple at all.

What makes airlines so difficult to turn a dollar from is that the sector must balance extraordinarily high fixed costs – basically 30 per cent aircraft, 30 per cent people and 30 per cent fuel – with revenue that is particularly volatile to price movements (raise your prices and people stop flying very quickly) and economic conditions.
And that’s the steady-state business model. On top of that airlines need to deal from time to time with the fallout from freak accidents, terrorist attacks, volcanic ash clouds (https://www.afr.com/link/follow-20180101-h120h4), international incidents and, of course, the odd pandemic.

While Virgin’s poor profitability over the past decade has been well documented, its divisional results do tend to fit the narrative that the best solution is to refocus the airline on the domestic market.

While group earnings before interest and tax (EBIT) for Virgin in financial 2019 totalled $89.5 million, domestic EBIT was $133.4 million, and EBIT from the Velocity loyalty program was $122.2 million. By comparison, Virgin’s international business lost $75.6 million, and its low-cost offshoot, Tiger Airways, lost $45 million.

The surgery necessary looks pretty obvious.

But some observes suggest simply killing the international arm would make Virgin far less attractive to Australia’s corporate travellers, who offer much better margins than leisure travellers.

Virgin doesn’t necessarily have to fly international routes itself to provide corporate customers with an international offering; agreements with foreign airlines via international alliances and code-sharing deals (including access to good quality lounges in overseas airports) would do the job, with lower costs and less risk.

But insiders say these agreements can be tricky. International travel is notoriously competitive, and foreign airlines will often pressure domestic carriers to push travellers towards their home countries.

As one former executive says, if Virgin wants to keep any international exposure, it will likely need to deal with one or more of the 600-pound gorillas that dominate international aviation – which, of course, has long been one of its problems, given it has previously had as many as five foreign airlines on its share registry.

The suggestion that Virgin will be able to pick and choose what domestic routes it flies doesn’t necessarily stand up to scrutiny either.

Observers suggest the rational competitive response to that strategy is to take what the airline industry calls a matrix pricing approach. That is, Qantas would be likely to drop prices on the routes where it is competing fiercely with Virgin, and raise prices on the routes where there is no competition.

Virgin may have little choice then but to match Qantas on all significant routes, which would, of course, limit its ability to bring its fixed cost base down.

Prime Minister Scott Morrison said on Tuesday that it was important that the new Virgin is "not crushed by any anti-competitive actions that may be put in place by another player in the market (https://www.afr.com/politics/federal/accc-to-watch-qantas-as-virgin-fights-to-survive-20200421-p54lne)" but exactly what regulatory framework the government would be prepared to put in place isn't clear. Price caps or profit caps on specific routes seem pretty unlikely.

No doubt the interested parties that have apparently flooded administrator Vaughan Strawbridge in recent days are working through the combinations and permutations that might work for a reborn Virgin.

But the central conundrum investors will need to get to grips with is around the question of an international arm. Would a domestic-only airline have the scale to be sustainably profitable if it doesn’t have an international offering, and so can’t attract as many high-margin corporate passengers?

Finding the middle road – something between the unprofitable Virgin Australia and its far more profitable forerunner, Virgin Blue – looks the best bet.

But it’s won’t be an easy task, and its why potential owners will want government support.qantas can't afford to discount its cash cow, the golden triangle. Junkstar will be cheap on golden triangle, but with only handful of flights a day on each sector, it will never be attractive to the business traveller.

[hotnhigh]

SO higher yielding punters, will bother with QF who nearly went belly up 7 years ago ?

You shouldn’t believe everything Alan says. A review of annual reports would illustrate.
But enough of that, virgin can and will survive. It’s a good business but leveraged beyond its current life form. Both qantas and virgin will be different. There is no short term fix. It will be a marathon, it will be painful in the extreme.
A rebalance of sorts but the status quo of rideshare will remain.

[crosscutter]

BNEA320 your talents and visions are wasted on PPRUNE.

However, can you point to any of your visions that have eventuated over the last decade. A lot has gone on and you’ve had ‘opinions of fact’ on most of them. My motive in this case is that often your posts generate negative emotions in others and I’m not convinced you have the runs on the board. We are all entitled to our opinion, but when you say ‘QF can’t afford to discount its cash cow’, it’s rather matter of fact when the reality is you know as much sh#t as I, and all I know is VA needs a restructure and I hope we see all the crews out there flying again soon. This thread is about Virgins restructure. It has nothing to do with QF or what their competitive response may or not be.

[dr dre]

According to BNEA320 it's actually QF who should be panicking over VA going into administration. Once that happens all problems are miraculously solved and VA will be the only carrier left in 12 months time. I wonder why more companies just don't go into administration if it's such a magic pill??

[BNEA320]

BNEA320 your talents and visions are wasted on PPRUNE.

However, can you point to any of your visions that have eventuated over the last decade. A lot has gone on and you’ve had ‘opinions of fact’ on most of them. My motive in this case is that often your posts generate negative emotions in others and I’m not convinced you have the runs on the board. We are all entitled to our opinion, but when you say ‘QF can’t afford to discount its cash cow’, it’s rather matter of fact when the reality is you know as much sh#t as I, and all I know is VA needs a restructure and I hope we see all the crews out there flying again soon. This thread is about Virgins restructure. It has nothing to do with QF or what their competitive response may or not be.if you believe there are over 10 potential buyers of virgin bits, it makes sense, as they can see there's big money to be made. You don't need to fly a route, to offer frequent flyer seats over a route.

ALmost everything here is opinion or guess work. That's it. Think Qantas shares will take a hiding, as soon as new nimble player is ID'd or even sooner.

[ECAMACTIONSCOMPLETE]

https://www.afr.com/chanticleer/former-insider-virgin-may-not-survive-insolvency-20200422-p54m3i

BNEA320 might need to let this guy know how wrong he is, it’s qantas who may not survive apparently!

[Paragraph377]

Maybe Godfrey and Sherrard will return to the new ‘lean and mean’ Virgin Mk2 and bring with them Chris Corrigan, Paul Little and Scott Swift? Remember Scott, the Executive that had a meltdown and cried in the workplace after Il Douche gave him his marching orders! After all they brought back Keith Neate so hell, bring back Diederek Penn and Manny Gill also!!! It will be a real hoot.

[Icarus2001]

The higher yielding punters won’t be bothered with the risk to begin with. Not just the higher yielding punters who will be loathe to stump up money for fares on a "shaky" airline.

That article was full of contradictions...
By comparison, Virgin’s international business lost $75.6 million,
Would a domestic-only airline have the scale to be sustainably profitable if it doesn’t have an international offering, and so can’t attract as many high-margin corporate passengers? Well they had an "international offering" before with "high-margin" passengers and still lost money on EVERY flight.
You don't need to fly a route, to offer frequent flyer seats over a route. The Frequent Flyer business is not in administration.

The code share "offering" always makes me laugh. If I am buying a ticket through a Virgin website that will see me on another carrier, then why would I not just book direct with the other carrier. Just like the QF - Emirates mess.

[dr dre]

If this new "lean and mean" VA is going to be such a threat why didn't it materialise any time after 2014 when it became obvious VA were never going to be QF's equal?

[galdian]

If this new "lean and mean" VA is going to be such a threat why didn't it materialise any time after 2014 when it became obvious VA were never going to be QF's equal?

Apparently wasn't obvious to the El Supremo of the day. :ugh:

[Servo]

The article Etrust posted is interesting. It states that:

"A government source said whoever bought Virgin would have to abide by Australian pay and conditions for workers but it was envisaged that the airline's enterprise bargaining agreement would be renegotiated because the current EBA was "excessively expensive''.

f%^k the government source. I am sure they get paid extremely well off the tit that is the tax payer. They cant help themselves wanting to keep real wages growth from occurring. Pricks.

[Ollie Onion]

This is no different to when Borgetti first took control, these pages were filled with similar stuff telling everyone who would listen how Virgin were going to crush Qantas and how Qantas should never have let him go as he was the best aviation CEO In the world. We are now seeing the same hysteria about Voluntary Administration, yes Virgin will probably survive in some form, but it will be small and lean, to be big enough to challenge Qantas is going to take a significant amount of time with very very careful management.

[Buttscratcher]

Isn't Jetstar already the 'nimble competitor' to Qantas?

[Servo]

This is no different to when Borgetti first took control, these pages were filled with similar stuff telling everyone who would listen how Virgin were going to crush Qantas and how Qantas should never have let him go as he was the best aviation CEO In the world. We are now seeing the same hysteria about Voluntary Administration, yes Virgin will probably survive in some form, but it will be small and lean, to be big enough to challenge Qantas is going to take a significant amount of time with very very careful management.

I think it is more wishful thinking Ollie. Some hope for the best. Others like me expect the worst. A LOT of Virgin pilots have been through this before with FlightWest and Ansett. Not a good time for anyone.

I admit that I fell for JB's used car salesman smile and charm, but soon realised that he was not in it for the company or the staff.

[Toruk Macto]

[QUOTE=On eyre;10758988]It is very rare in any market to have equal shares between competitors- usually due to CEO egos and dick comparing contests one becomes dominant and draws a line in the sand in terms of their acceptable market share (as AJ has done). It is sometimes (perhaps always) wise for minor market share competitors to accept their allocated market share, concentrate on their efficiency and maximise their profitability. I cite a small competitive RPT market of last century in which Kendell Airlines held 2/3 of the Adelaide to Port Lincoln market and Lincoln Airlines 1/3. A few others came and went. There was no collusion but Don Kendell revealed that he would always prefer a competitor he could trust. In this case competition was always there but the customers benefited by the services provided.
Perhaps if the new no longer virginal airline would accept a QF drawn line in the sand without letting CEO egos get in the way it might be a win win for all parties - customers, staff, tourism businesses, shareholders and the government. Pipe dream ? Maybe but it might work also with a better use of all resource.[/QUOTE

Some airlines only trust a competitor they own !

[Sunfish]

It’s illegal to draw a line in the sand. It’s called collusion. Having said that, it’s often done and hard to prove.

[non_state_actor]

A government source said whoever bought Virgin would have to abide by Australian pay and conditions for workers but it was envisaged that the airline's enterprise bargaining agreement would be renegotiated because the current EBA was "excessively expensive'

The government source might want to find a dictionary and look up the actual definition of excessive.

[Icarus2001]

but it was envisaged that the airline's enterprise bargaining agreement would be renegotiated because the current EBA was "excessively expensive' First of all, why AGREEMENT in the singular, there are many, covering different AOCs and work areas. Secondly, maybe a return to the good old VB days of pay for your own type rating.

[InCruise]

believe there are 10+ interested parties wanting to buy VA

I would put Singapore Airlines at top of list along with Air New Zealand.

Even though they got their nose bloodied to the tune of around NZ$800 million with Ansett.

I would love an Australian entity to be successful.

Does anyone have any news on who are the interested parties?

InCruise.

[industry insider]

VA Annual revenue of $5.8bn with debt of $5bn.

QF annual revenue of $18bn. QF debt is similar at $5bn.

VA debt is going to be restructured during Administration, some will take a big haircut. While lessors hate to re negotiate rates, the Millionaire Factory Macquarie will be working some revised lease rates for their portion of the VA fleet.

With AA retiring the equivalent of the VA 737NG fleet (76 aircraft) NG values are heading south, there is bound to be even more spare NG and 320 capacity as some airlines fail. Macquarie won't want to be stuck with them without a customer, even though NG and 320 are the easiest to place.

Hypothetically and without wishing to make asinine assumptions, if VA can reduce debt to $2bn, it may have a good chance of survival. Its fare base (revenue base) is similar to QF, its costs must be similar, same aircraft, same fuel, same rent, same landing fees etc.

I flew with VA today, very good it was too. I really hope they come out of this well.

[Pearly White]

Sounds about right.
For the first two months.

[Hoosten]

So, Australia can't support two full service airlines? Eff off it can't. The ONLY reason it hasn't up to this point is the complete and utter lack of CEO 'talent.' Borghetti. A vengeful little yes man, brought up in the 'Qantas culture' of fear and retribution. Can't stand the thought of someone knowing more about the business than him. Joyce, if any of you are wondering about his management competence, he had a competitor on the ropes, he could have just shut his mouth, let this crisis pass and pummelled a weakened competitor through the recovery. Instead, he had to wave his small man, small dick syndrome and tell everybody how good he was because he's got 6 months extra cash in reserve. This, not knowing whether the crisis will last past his 6 months, complete moron. Do you wonder why you haven't heard from him in the last couple of weeks?? Do you reckon he's considered who his next competitor will be?? Because one thing is for sure, there will be one, and they may just kick his small man arse.

Do you reckon he's considered there may not be any international travel for 12 months and he'll be competing with a leaner domestic carrier while his 747's, A380's, A330's, B787's are mothballed at Alice Springs? Do you reckon he's considered that when international travel resumes he's competing with US airlines that have had 6 months of multi billion dollar handouts, not only loans, but handouts. Do you reckon he's considered that his 'new' domestic competitor won't have these international problems to deal with when international travel resumes? What an 'A grade' moron. If he was so damn good, do you reckon his Board wouldn't have told him to STFU?

Whether you think Australia can 'afford' two full service airlines or not, there WILL BE at least TWO, even if it's a procession of likely suitors. Do none of you study history? Australia is capitalist, which means there will not be ONE supplier.

[Ragnor]

Gee-sus Christ, what a bunch of wankers, both business commentators and the 'experts' on this site, what business qualifications have any of you got? Apart from Sunfish, he calls you lot wankas and you don't like it, but he's been there and YOU HAVEN'T. Have any of you been in business management positions in any airline around the world?

So, Australia can't support two full service airlines? Eff off it can't. The ONLY reason it hasn't up to this point is the complete and utter lack of CEO 'talent.' Borghetti. A vengeful little yes man, brought up in the 'Qantas culture' of fear and retribution. Can't stand the thought of someone knowing more about the business than him. Joyce, if any of you are wondering about his management competence, he had a competitor on the ropes, he could have just shut his mouth, let this crisis pass and pummelled a weakened competitor through the recovery. Instead, he had to wave his small man, small dick syndrome and tell everybody how good he was because he's got 6 months extra cash in reserve. This, not knowing whether the crisis will last past his 6 months, complete moron. Do you wonder why you haven't heard from him in the last couple of weeks?? Do you reckon he's considered who his next competitor will be?? Because one thing is for sure, there will be one, and they may just kick his small man arse.

Do you reckon he's considered there may not be any international travel for 12 months and he'll be competing with a leaner domestic carrier while his 747's, A380's, A330's, B787's are mothballed at Alice Springs? Do you reckon he's considered that when international travel resumes he's competing with US airlines that have had 6 months of multi billion dollar handouts, not only loans, but handouts. Do you reckon he's considered that his 'new' domestic competitor won't have these international problems to deal with when international travel resumes? What an 'A grade' moron. If he was so damn good, do you reckon his Board wouldn't have told him to STFU?

Whether you think Australia can 'afford' two full service airlines or not, there WILL BE at least TWO, even if it's a procession of likely suitors. Do none of you study history? Australia is capitalist, which means there will not be ONE supplier.

Wow. I bet you’re a short angry person also!

[normanton]

What a crack up Hoosten! Back to the pub!

[InCruise]

. . . . . and the buyer will be -

1. Singapore Airlines - that would flatten Qantas.haha

2. Air New Zealand.

[Hoosten]

Wow. I bet you’re a short angry person also!

6 footer, 100 kegs (but on the manshakes, trying to get back to the low 90's)

[Hoosten]

What a crack up Hoosten! Back to the pub!

Ahhh, you know of a pub that's open for business now brah? Gimme the headsup, I'm there.

[chookcooker]

believe there are 10+ interested parties wanting to buy VA

I would put Singapore Airlines at top of list along with Air New Zealand.

Even though they got their nose bloodied to the tune of around NZ$800 million with Ansett.

I would love an Australian entity to be successful.

Does anyone have any news on who are the interested parties?

InCruise.

Cue Danv2 to come in now for the 482626th time and bang on about how incompetent Singapore is and yada yada yada.
im sure he’s got no axe to grind .....

[Chris2303]

believe there are 10+ interested parties wanting to buy VA

I would put Singapore Airlines at top of list along with Air New Zealand.

If Air NZ try and buy VA, they will kiss goodbye to the $900M from the NZ Government. They have enough problems keeping themselves afloat without giving the lifejackets to a foreign operator with whom they fell out in spectacular fashion in October last year

[Wizofoz]

Here is what I see as VA's biggest dilemma.

Redundancies.

Employees are first tier creditors, so any employee made redundant will need to be paid out before any other creditor.

The "Leaner, meaner" idea is certainly the only way forward from administration, but every redundant employee sacrificed to the "leaner" mantra is one more short-term liability.

I can't help but think a more likely route is to start with a fresh-or close to fresh- sheet, call quits on VA and liquidate.

It's why I made the comment that I think the Tiger AOC is a valuable asset- a turn-key airline with 8 737s, while 100 or so VA 737s sit idle, available as needed at what would be terrific terms.

Meanwhile Qantas is going to have scores of idle aircraft and stood-down employees for months/years, all negative on the balance sheets.

Virgin Blue had a similar opportunity and did a great job of capitalizing on it, someone getting hold of Tiger might have a similar window.

[chookcooker]

Here is what I see as VA's biggest dilemma.

Redundancies.

Employees are first tier creditors, so any employee made redundant will need to be paid out before any other creditor.

The "Leaner, meaner" idea is certainly the only way forward from administration, but every redundant employee sacrificed to the "leaner" mantra is one more short-term liability.

I can't help but think a more likely route is to start with a fresh-or close to fresh- sheet, call quits on VA and liquidate.

It's why I made the comment that I think the Tiger AOC is a valuable asset- a turn-key airline with 8 737s, while 100 or so VA 737s sit idle, available as needed at what would be terrific terms.

Meanwhile Qantas is going to have scores of idle aircraft and stood-down employees for months/years, all negative on the balance sheets.

Virgin Blue had a similar opportunity and did a great job of capitalizing on it, someone getting hold of Tiger might have a similar window.
so you’re saying:

1: making an employee redundant is expensive
2. Therefore it’s better to make every single employee redundant.
3.????????
4. Profit!!

[Paragraph377]

There has been a lot of comparison to Ansett in these threads, however there is one big difference; 9/11 had a temporary effect on domestic travel in Australia and there was a gap that could be filled as a result of Ansett going tits up. This time there is no gap plus you have QF and JQ dominating a decimated market. However Virgin Australia has one advantage in its favour over any potential startup airline; a foundation platform - systems, processes, training, certification, AOC, COA, an established ‘fan’ base of diehard customers and other tools that enable it to keep flying. These things take money and time to implement. Virgin already/still has this.

It is going to have to go back to grass roots, and it will be smaller, but it’s a start. Importantly it needs to ditch anything related to Branson. Why pay for that fools logo/brand/name any longer? Plus Branson has also become tainted goods. A billionaire not helping out his loyal VA staff out. His name is now ****e worldwide so why rename connected to it? If you have to start with a clean page, ditch the Necker Island muppet once and for all. Make the airline Australian, not foreign. Aussies love their own brand. That’s an advantage the Rat has. Give the rebirthed airline a name and logo Aussies will flock too. And the new VA needs an identity. Full service carrier or low cost carrier? There is no ‘in between’, which is really what got them sliding down the slippery slope of Administration. It just took awhile to get there.

[BNEA320]

There has been a lot of comparison to Ansett in these threads, however there is one big difference; 9/11 had a temporary effect on domestic travel in Australia and there was a gap that could be filled as a result of Ansett going tits up. This time there is no gap plus you have QF and JQ dominating a decimated market. However Virgin Australia has one advantage in its favour over any potential startup airline; a foundation platform - systems, processes, training, certification, AOC, COA, an established ‘fan’ base of diehard customers and other tools that enable it to keep flying. These things take money and time to implement. Virgin already/still has this.

It is going to have to go back to grass roots, and it will be smaller, but it’s a start. Importantly it needs to ditch anything related to Branson. Why pay for that fools logo/brand/name any longer? Plus Branson has also become tainted goods. A billionaire not helping out his loyal VA staff out. His name is now ****e worldwide so why rename connected to it? If you have to start with a clean page, ditch the Necker Island muppet once and for all. Make the airline Australian, not foreign. Aussies love their own brand. That’s an advantage the Rat has. Give the rebirthed airline a name and logo Aussies will flock too. And the new VA needs an identity. Full service carrier or low cost carrier? There is no ‘in between’, which is really what got them sliding down the slippery slope of Administration. It just took awhile to get there.spirit of Australia sounds like a good name.

Air nz is an in between airline. They seem to be doing alright, or were.

Wouldn't it be great if new airline was more Australian than Qantas.

The big questions

1. how many of current va staff will be invited to apply for new positions ?

2. what percentage of current pay will they be offered ?

3. will they be expected to do more for less ?

Many will not like doing same or more for less pay, but that's probably the reality. Hint at that in an interview & you probably won't get a job.

[DanV2]

If Air NZ try and buy VA, they will kiss goodbye to the $900M from the NZ Government. They have enough problems keeping themselves afloat without giving the lifejackets to a foreign operator with whom they fell out in spectacular fashion in October last year

Also not the first time the NZ government has loaned and/or bailed out Air New Zealand.

The first time the NZ government bailed out Air NZ was during the incompetent and ego-riddled Ansett 'adventure' after AN filed voluntary administration. Many egos in the-then NZ management at the time.

The current management of NZ doesn't seem that stupid to follow the mistakes of their predecessors which were involved in the Ansett and Virgin stakes.

[hoss58]

spirit of Australia sounds like a good name.

Air nz is an in between airline. They seem to be doing alright, or were.

Wouldn't it be great if new airline was more Australian than Qantas.

The big questions

1. how many of current va staff will be invited to apply for new positions ?

2. what percentage of current pay will they be offered ?

3. will they be expected to do more for less ?

Many will not like doing same or more for less pay, but that's probably the reality. Hint at that in an interview & you probably won't get a job.

Actually it would be a no brainer. I really believe most people would rather keep 70 or 80% of what they are earning at the moment rather than losing 100%.

It would be better than what center link would give you by a country mile that''s if you were eligible for anything..

Fly safe and play hard, when you can

Cheers Hoss

[BNEA320]

Actually it would be a no brainer. I really believe most people would rather keep 70 or 80% of what they are earning at the moment rather than losing 100%.

It would be better than what center link would give you by a country mile that''s if you were eligible for anything..

Fly safe and play hard, when you can

Cheers Hoss
of course, but it could be less than 70%.

There's a huge glut of airline personnel right now.

[hoss58]

Of course. They are just arbitrary figures.

Even 50% would still be better than what C-link would give you.

Cheers Hoss

[BNEA320]

Of course. They are just arbitrary figures.

Even 50% would still be better than what C-link would give you.

Cheers Hossam sure any new owners will be testing to see how low they can go, maybe with a kicker, that when in profit, pay goes up.

[Icarus2001]

An apparently "leaked" flyer sent to interested parties yesterday as reported by the AFR.
Deloitte's seven point pitch included:

Attractive two player domestic market with proven profitability
Strong ongoing demand for domestic air travel (long distances between major cities, limited alternative transport options, tourism destination)
Strategically valuable access to routes and slots in the "Golden Triangle", historically one of the most profitable operating jurisdictions globally for air travel
Highly cash generative and distinguished Velocity Frequent Flyer loyalty model, in excess of 10 million members and 90 partners
Key strategic assets and infrastructure, including aircraft, route network, airport gates/slots, built over 20 years
Unique opportunity to 'relaunch' Virgin Australia with a sustainable capital structure post COVID-19
Strong support from government, regulators and unions - have all expressed a desire to keep Virgin flying following recapitalisation

How do they keep a straight face when they say "proven profitability"?
They were so profitable that they are in administration with $5 billion in debts.

[normanton]

How do they keep a straight face when they say "proven profitability"?
My thoughts exactly. Won't stop the state governments putting in stupid offers.

[Paragraph377]

My thoughts exactly. Won't stop the state governments putting in stupid offers.
Likely it refers to aspects of the business. The triangle route and Velocity made them money, just not enough money to cover the loss making parts of the business. So technically it’s not a furphy, but it is a long stretch of the truth bow.

[BNEA320]

Likely it refers to aspects of the business. The triangle route and Velocity made them money, just not enough money to cover the loss making parts of the business. So technically it’s not a furphy, but it is a long stretch of the truth bow.The scary thought is, new owners only might want to do golden triangle + PER & CBR & leave everything else to ?

Tiger or Alliance or ?

How many F50s does Alliance have ? Do they work up to 90 minutes or bit longer? If so, could they do some shorter Qld routes ?

[rmm]

Strong ongoing demand for domestic air travel (long distances between major cities, limited alternative transport options, tourism destination)
I think that's much further down the track. 10% plus unemployment, consumer confidence down, recession (possible depression) conditions, tourism - bars, restaurants & sporting events probably the last to reopen.

[BNEA320]

I think that's much further down the track. 10% plus unemployment, consumer confidence down, recession (possible depression) conditions, tourism - bars, restaurants & sporting events probably the last to reopen.no reason why some restaurants can't open now, if they follow the 4 sq m rule. Specifically the ones who don't pay high rents & don't have to jam patrons in. Went to an enormous restaurant a month ago, that had enough room, including function rooms, for 4, 5 or 6 times, the number of tables they actually had out.

Far less space at Coles/Woolies/Bunnings

[Wizofoz]

so you’re saying:

1: making an employee redundant is expensive
2. Therefore it’s better to make every single employee redundant.
3.????????
4. Profit!!

Making employees redundant is expensive IF you are trying to hold onto your assets and get an operation functioning again. To emerge from administration, VA must show it has a business plan that means it can service it's debt. It is trying to negotiate with debtors, but each redundant employee is a mark on the red side of the ledger.

If it can't come up with a business plan that shows it will be able to service all those debts, it has not choice but to liquidate. That might mean there not being enough in the pot to pay all entitlements, but you can't be a running business and not pay full entitlements to employees you make redundant.

I'm not saying it's a better outcome, I'm saying it might be a commercial reality.

[BNEA320]

Making employees redundant is expensive IF you are trying to hold onto your assets and get an operation functioning again. To emerge from administration, VA must show it has a business plan that means it can service it's debt. It is trying to negotiate with debtors, but each redundant employee is a mark on the red side of the ledger.

If it can't come up with a business plan that shows it will be able to service all those debts, it has not choice but to liquidate. That might mean there not being enough in the pot to pay all entitlements, but you can't be a running business and not pay full entitlements to employees you make redundant.

I'm not saying it's a better outcome, I'm saying it might be a commercial reality.
but aren't you foregetting that the administrator can make most of that debt mountain go away, ie. tell aircraft owners to come & get their jets, as no more lease payments will be made.

I maybe getting confused with chapter 11 in USA, but think admin in Australia means just that. The creditors are stuffed. Who would give an airline credit ?

[Icarus2001]

The creditors are stuffed. Who would give an airline credit ? They are not powerless, they can force liquidation to recover funds.

https://asic.gov.au/regulatory-resources/insolvency/insolvency-for-creditors/voluntary-administration-a-guide-for-creditors/

VAH own about half of their fleet. Firesale price in this market? 70 jets at 10 million each average price? 700 million right there. Good luck with a sale though.

[Popgun]

Of course. They are just arbitrary figures.

Even 50% would still be better than what C-link would give you.

Cheers Hoss

If it was me, I’d be pitching for JQ salaries minus 10-20%. That way it would be very clear that the labour side of the cost base was competitive and could not be held accountable for profitability failure.

PG

[ECAMACTIONSCOMPLETE]

If it was me, I’d be pitching for JQ salaries minus 10-20%. That way it would be very clear that the labour side of the cost base was competitive and could not be held accountable for profitability failure.

PG

So 160-180k for NB Capts and around 100k for NB F/Os compared to JQ. Pretty big haircut, but could be negotiated higher in better times perhaps. Better than being unemployed or working at a supermarket also.

[galdian]

Happy to be corrected but in order for VA to be "sold" as a going entity the accumulated debt has to be settled, it won't be at the full debt value but a proportion ie 20 cents in the $/30 cents....whatever.
If the creditors reckon that in liquidation they can get 50 cents but are only being offered 30 cents by the administrator they will likely say "get stuffed".

The creditors will decide whether VA can continue - contingent of course on finding an investor willing to provide the xx cents in the $ to buy off the creditors.
As was proven by Fox/Lew any investor will be looking at what THEY can get out of it, if they suddenly decide they can't get what they want/demand they'll spit the dummy and kill the deal.

If anyone was REALLY concerned about running an airline they'd either buy the Tiger AOC outright (if possible) or team up with Alliance, either way expand in their own time in their own direction and leave the VA mess to the administrator.
Just IMHO.
Cheers.

[Sunfish]

The reason Abeles was a buyer for Ansett is that the airline had a seat at the IATA clearing house in Montreal. No finer money laundering device existed at that time.

’Then there was the “sale” of DC-9’S to Les Hong at Evergreen. Those aircraft were converted to American registration, painted in US Navy colours and leased to it for staff transport. All that conversion was at Ansett’s expense. Les was a guest at one of the Murdoch kids weddings.

Airlines generate lots of cash...... Very attractive to some.

Sir Peter was the only man who could physically scare G McM.

[crosscutter]

but aren't you foregetting that the administrator can make most of that debt mountain go away

Provided it is approved by the required percentage of creditors and the outcome is better than liquidation.

The creditors are stuffed.

The secured creditors are in a pickle as much as the unsecured. They would love to wipe out the bondholders. But the bondholders will know this. As might certain private equity investors. So the bondholders might prefer a debt to equity swap, so ironically, the unsecured bondholders now become a major shareholder. Is this situation less optimal for the majority of creditors? I’m sure it’s being worked out. But If it is better, should a proposal offer the bondholders a debt to equity swap, it might be the best option as it gives the bondholders something, whilst the secured creditors remain untouched as leased aircraft are sent back home.

I’m sure someone (maybe Sunfish) with more knowledge around restructures can provide more light, and I might be quite wrong...but what to do with the bondholders when they amount to $1.8B worth of debt is important. If another administrator got the bondholders, unions and others onside don’t be so sure they won’t be knocking on the Virgin restructure door.

[Wizofoz]

Provided it is approved by the required percentage of creditors and the outcome is better than liquidation.



The secured creditors are in a pickle as much as the unsecured. They would love to wipe out the bondholders. But the bondholders will know this. As might certain private equity investors. So the bondholders might prefer a debt to equity swap, so ironically, the unsecured bondholders now become a major shareholder. Is this situation less optimal for the majority of creditors? I’m sure it’s being worked out. But If it is better, should a proposal offer the bondholders a debt to equity swap, it might be the best option as it gives the bondholders something, whilst the secured creditors remain untouched as leased aircraft are sent back home.

I’m sure someone (maybe Sunfish) with more knowledge around restructures can provide more light, and I might be quite wrong...but what to do with the bondholders when they amount to $1.8B worth of debt is important. If another administrator got the bondholders, unions and others onside don’t be so sure they won’t be knocking on the Virgin restructure door.

In other word it's a (possibly unworkable) mess.

[SOPS]

I have a question that I’m sure some one can answer. What happens to all the staff entitlements? For example leave, LSL and sick leave? Has all that just disappeared suddenly?

[Lookleft]

Based on my experience with the Ansett collapse all leave,LSL and 8 weeks redundancy were paid but guaranteed by the Government. Sick leave is not cashed out at anytime. If you resign you still don't get sick leave. Its accrued but not a cash liability.

[Lead Balloon]

I think LL is correct. Google “Fair Entitlements Guarantee (FEG)”.

[Led Zeppelin]

The Ansett specific arrangements were called SEESA (Special Employee Entitlements Scheme for Ansett) and provided the following:

Wages
Accrued annual leave
Long service leave
Pay in lieu of notice
Up to eight weeks redundancy payments

The government was never going to be out of pocket as they made millions from the passenger ticket levy that was set up to pay for the arrangements.

[Lookleft]

Not only did they get their money back from the ticket levy but they also got refunded by the administrators, so overall it was win-win for the government.

[Sunfish]

This sort of situation is where commercial lawyers earn their pay. If there is someone out there who can keep bond holders, creditors, staff, shareholders and customers happy, they deserve the big bucks. As for bond holders you would need to see the bond deed, same with other creditors. They will have clauses about default and things called negative pledges. same with aircraft leasing agreements, in fact all agreements will have to be looked at by savvy lawyers. They will be looking for a plan to modify those agreements that keeps all creditors and bond holders on side, that will play to the banks and new investors and that makes a restructured business viable and valuable enough to be worth the heartache of putting all that together. That is horribly difficult, as just one hold out can sink the deal.

I’ve watched it happen and dabbled on the edges of this, but it is way above my pay grade. Let’s hope that someone can put this together without Qantas, CASA, Creditors etc sticking a crowbar between the wheel spokes.

[Icarus2001]

What happens to all the staff entitlements? For example leave, LSL and sick leave? Has all that just disappeared suddenly? Certainly not. Sick leave is non preserved, as mentioned above, if you resign you do not get to take that with you but the rest will either be paid by a version of VAH as part of the DOCA or if they liquidate and cannot pay then the FEG applies.

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

You may be able to claim:

your unpaid wages—up to 13 weeks
your unpaid annual leave and long service leave
payment in lieu of notice—up to five weeks
redundancy pay—up to four weeks per full year of service.

[Section28- BE]

Maybe useful/or Not.......... 'Caveat'- Information Only.

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

& here: https://asic.gov.au/regulatory-resources/insolvency/insolvency-for-employees/voluntary-administration-a-guide-for-employees/

Rgds
S28- BE

[slice]

With FEG you are only covered up to $2491 per week for your entitlements.

[Higs]

As a Platinum member of Velocity I have been somewhat loyal to Virgin over the years however, for me, it's simple. No lounge and no reasonable frequency, means it will be hard for me to justify staying with Virgin. Even now I find myself looking at the opposition for necessary flights.

[krismiler]

https://www.smh.com.au/business/companies/bidders-line-up-as-virgin-clears-the-debt-20200421-p54lv1.html?utm_medium=Social&utm_source=Facebook&fbclid=IwAR3wJp_BXbNfv7ObDvi9F1LooKR_0AlabBsdygyONWYfvUK0zvb el6wJ5-U

Two of Australia’s largest companies, Wesfarmers and Macquarie Group, are said to be contenders in the bidding process to recapitalise Virgin Australia which on Monday was placed into the hands of administrators.

They join a number of private equity companies and offshore groups that are lining up to receive an information memorandum as Virgin administrator Deloitte’s Vaughan Strawbridge officially begins the process of finding the highest bidder.

The interest from Macquarie comes as no surprise given its extensive experience in managing complex financing and its history of amassing infrastructure assets (and its previous bid for Qantas).

https://static.ffx.io/images/$zoom_0.405%2C$multiply_0.3541%2C$ratio_1.776846%2C$width_10 59%2C$x_293%2C$y_443/t_crop_custom/q_86%2Cf_auto/0bd0b4e1d696a309eb16ac2e7a9c0f33bb32d5a1
Let the bidding begin: Virgin chief executive Paul Scurrah and Deliotte administrator Vaughan StrawbridgeCREDIT:LOUISE KENNERLEY

Wesfarmers is a conglomerate with a history of owning discretionary consumer goods businesses and has displayed a strong interest in loyalty programs around which it has acquired detailed knowledge courtesy of its retail businesses. (In a curious twist of fate Wesfarmers’ former chief executive Richard Goyder is now the chairman of Qantas).
In addition, a note in early April from UBS to its clients on potential acquisition for the cashed-up Wesfarmers, the investment bank nominated Qantas as a possible target. Wesfarmers has raised more than $2 billion over the past couple of months by selling some of its shareholding in Coles (https://www.smh.com.au/business/companies/wesfarmers-bolsters-books-with-1b-coles-sell-down-20200330-p54fez.html), placing it in a prime position to entertain opportunistic acquisitions.

From the private equity sector, BGH Capital (https://www.smh.com.au/business/markets/masters-of-their-own-universe-crack-team-set-to-shake-up-private-equity-20180413-p4z9eq.html) appears to be the frontrunner but Bain Capital and Oaktree have also been mentioned. And of course Virgin Australia co-founder Richard Branson is busy in the background trying to ensure he has some part to play in the airline's recapitalisation. He needs to protect his brand and the $15 million a year the airline pays to use it.

https://cf-images.ap-southeast-2.prod.boltdns.net/v1/static/3910869709001/754ab327-6889-4c65-b4e3-2bb60f653211/3641a7ce-2fdf-42e1-a539-113c081689f3/1280x720/match/image.jpg (javascript:void(0);)

Chief Executive Officer Paul Scurrah and Administrator Vaughan Strawbridge discuss the Group’s announcement.
Interest from these players alone demonstrates how small and interconnected is the Australian market. Macquarie partnered with private equity group TPG to mount an ultimately unsuccessful $11 billion offer to privatise Qantas back in 2006 (https://www.smh.com.au/business/qantas-accepts-revised-11b-bid-20061214-gdp1r0.html). Ben Gray was managing director at the time and has since founded BGH alongside Robin Bishop, the former head of Macquarie Capital. Bishop missed out on the top job at Macquarie after the retirement of Nicholas Moore.

Moore was on Tuesday appointed by the federal government as it emissary to engage with the administrator on the sale of Virgin. (It is not clear what role Moore will play. Perhaps to ensure Virgin is not sold to unsuitable interests or to a player that wants to break it up and sell it for scrap.)

Budget airline group Arizona-based Indigo Partners is another speculated to have registered interest but is considered a very outside chance. And contrary to some recent speculation there are no Chinese airlines on the list.RELATED ARTICLE Neither Deloitte nor Virgin would comment on which parties had registered an interest. However, Strawbridge said Deloitte was entertaining interest from more than 10 parties - (https://www.smh.com.au/business/companies/virgin-australia-confirms-collapse-appoints-administrators-20200421-p54lnd.html) although according to insiders this number has swollen closer to 20 as new expressions of interest came through on Monday night. Although a portion will be tyre kickers, the level of confidence displayed by Strawbridge about finding a suitable bid was unusually high for day one of corporate administration.During Tuesday morning’s media briefing Strawbridge referred to the elevated level of competitive tension, the scope and scale of the expressions of interest and the "sophistication" of interested parties. It won’t be a protracted process, according to Strawbridge, who plans to have an information memorandum distributed to potential buyers next week.

Virgin, which has $5 billion in debt of which about $2 billion is junk bonds, was looking for a $1.4 billion loan from the federal government which could have been convertible into equity. Using back of the envelope calculations, if bondholders take a haircut (actually a full shave) and shareholders' equity was completely torched, the proceeds of any acquisition money could be applied to debt.

Assuming a $1.4 billion offer, the airline would have a workable balance sheet at the end of the process. The future plans would also involve a rethink of capital expenditure including the acquisition of new aircraft and the abandonment of non-profitable routes and international operations.

If so Virgin could be pared back to a profitable domestic duopoly. And its chief executive Paul Scurrah’s prediction on Monday could prove correct. "It's a tough day for our airline but certainly not the end. We are not collapsing."

[-41]

As a Platinum member of Velocity I have been somewhat loyal to Virgin over the years however, for me, it's simple. No lounge and no reasonable frequency, means it will be hard for me to justify staying with Virgin. Even now I find myself looking at the opposition for necessary flights.

I’ve been expecting AJ to offer all Velocity members reciprocal membership with QFF at the same level for 24months. Borghetti didn’t have an issue doing this a decade ago!

[-41]

https://www.ag.gov.au/industrial-relations/industrial-relations-publications/Documents/what_assistance_can_feg_provide.pdf

$2451 per week cap as of August 2019 ($127K)

also does not cover late super contributions

[Buster Hyman]

And of course Virgin Australia co-founder Richard Branson is busy in the background trying to ensure he has some part to play in the airline's recapitalisation. He needs to protect his brand and the $15 million a year the airline pays to use it.
I'd have two words for him... **** off you ******* piece of **** and take your ******* crap ethics with you!

[Stationair8]

Dick Smith quoted in The Australian Business Section as not being interested in Virgin Australia.

[Chris2303]

(In a curious twist of fate Wesfarmers’ former chief executive Richard Goyder is now the chairman of Qantas).

I wonder if he will have the spherical objects to leave QF?

[Buttscratcher]

https://youtu.be/-DT7bX-B1Mg

[Fatguyinalittlecoat]

I wonder if he will have the spherical objects to leave QF?

what does that mean? Why would he leave QF? What has Wesfarmers got to do with him now?

[Paragraph377]

I'd have two words for him... **** off you ******* piece of **** and take your ******* crap ethics with you!
Love it! And I like the mention of ‘Richard Branson working in the background’. Sounds about right, hiding in the shadows, covertly and spinelssly trying to hatch a plan to keep his name attached so he can keep collecting his royalties. The parasite couldn’t give a f#ck about the people who have been burned, he just wants to maintain his wealth. Jackoff.

[2020Balance]

Love it! And I like the mention of ‘Richard Branson working in the background’. Sounds about right, hiding in the shadows, covertly and spinelssly trying to hatch a plan to keep his name attached so he can keep collecting his royalties. The parasite couldn’t give a f#ck about the people who have been burned, he just wants to maintain his wealth. Jackoff.

The new V Australia will effectively write his name out of it

[Buttscratcher]

So I guess they'll just end up calling it VELOCITY

[PoppaJo]

Just make sure it’s Aussie owned with such livery otherwise ol Dick will be down our throats (and rightly so)
https://cimg8.ibsrv.net/gimg/pprune.org-vbulletin/1125x577/ee147915_2b1f_4abd_8bd4_b979a71f6da9_6444154d4cda26661f1666c cdbae3bced3626f32.jpeg

[Buttscratcher]

...yes, noted, Poppa, 'cause no-one wants Dick down their throats again

[wondrousbitofrough]

...yes, noted, Poppa, 'cause no-one wants Dick down their throats again

Again...?:ooh:

[stevieboy330]

A Chinese company & or Government Owning an Australian airline, be careful what you wish for.......That is a frightening outcome for Virgin.
You are talking about people who have a proven, well documented and lengthy history of outright dishonesty, abuse of power, total disregard for employee & shareholder rights, complete lack of transparency, intimidation & total secrecy. Once you open the door to Chinese investors you will be raped & discarded, because thats how they do business.

[Paragraph377]

However, Chinese companies make for great Employers when it comes to hiring ex Politicians, lobbyists and so on. They pay very well !!!

[novice110]

Question:

Is there anything stopping the QF group from pretending to be one of the potential buyers ?
(Paying someone to do it).

In order to find out in great detail the financials / plans etc.

[The Bullwinkle]

A Chinese company & or Government Owning an Australian airline, be careful what you wish for.......That is a frightening outcome for Virgin.
You are talking about people who have a proven, well documented and lengthy history of outright dishonesty, abuse of power, total disregard for employee & shareholder rights, complete lack of transparency, intimidation & total secrecy. Once you open the door to Chinese investors you will be raped & discarded, because thats how they do business.
https://cimg5.ibsrv.net/gimg/pprune.org-vbulletin/620x348/wuhan_australia_452a799495cc19604e9430f6b27fff4099dca4bf.jpg
How about this?

[34R]

Question:

Is there anything stopping the QF group from pretending to be one of the potential buyers ?
(Paying someone to do it).

In order to find out in great detail the financials / plans etc.

Put your tinfoil hat back on please

[Tommy Bahama]

THERE HAVE BEEN QUITE A FEW INTERESTING DEVELOPMENTS IN THE ADMINISTRATION PROCESS OF VIRGIN AUSTRALIA, AS THE AIRLINE’S FUTURE HANGS IN THE BALANCE.

After it was originally thought that Virgin’s debt pile was around $5 billion, the administrators at Deloitte have revealed that the total amount owing to creditors is more than $6.8 billion.

According to an affidavit lodged to the Federal Court by Deloitte’s Vaughan Strawbridge last week, secured lenders are owed approximately $2.3 billion, unsecured bondholders are owed approximately $167 million, aircraft lessors are owed approximately $1.9 billion, landlords are owed approximately $71 million, and employees are owed approximately $450 million.

Deloitte has identified that Virgin has more than 10,000 known creditors in total (including approximately 9,020 employees), but expects this number to increase to over 12,000 as more information becomes available.

There has been a bit of speculation around whether unions representing workers will look to try and appoint a rival firm such as KordaMentha to ensure a fair administration process, given Deloitte recently disclosed it had worked with Virgin on other advisory and restructuring work in the past.

However, the Australian Federation of Air Pilots, the Transport Workers Union and the Australian Licensed Aircraft Engineers Association told The Australian (https://www.theaustralian.com.au/business/aviation/unions-deny-deloitte-stoush/news-story/aa592cdafe9505bdefc55e2598238405) that they were satisfied with Deloitte leading administration proceedings.

Meanwhile, one of Virgin’s suitors has told Deloitte, as well as the federal and state governments, that it will provide certainty to the carrier’s staff if its “Team Australia” bid is successful.

According to The Australian Financial Review (https://www.afr.com/companies/transport/bgh-s-team-australia-appeal-for-virgin-20200423-p54mk7), BGH Capital has also warned the relevant parties that other private equity firms and hedge funds from overseas may not show as much mercy to Virgin employees.

To further prove BGH is serious about a potential play for Virgin, The Australian (https://www.theaustralian.com.au/business/dataroom/bgh-recruits-moelis-as-it-explores-virgin-move/news-story/3117bafc0868a212caa5cc9ab3498e55) reported that firm has has tapped advisory specialists Moelis for a possible recapitalisation of the airline.

It’s been speculated that BGH will make a move for Virgin as part of a consortium rather than going solo, with AustralianSuper popping up in multiple media reports as a likely partner.

And, finally, it appears Paul Scurrah (pictured above) could have a challenger for the top role at Virgin following the administration process, with John Thomas telling the AFR (https://www.afr.com/companies/transport/ex-virgin-australia-heir-mulls-running-recapitalised-airline-20200422-p54m1d) he would throw his hat in the ring for the CEO position if it became available.

Thomas is no stranger to Virgin, having led the airline’s domestic and international operations between 2016 and 2017.

[rattman]

Question:

Is there anything stopping the QF group from pretending to be one of the potential buyers ?
(Paying someone to do it).

In order to find out in great detail the financials / plans etc.

Absolutely illegal under the competition act, at very least it would come under unconscionable conduct. Add in being sued out of existence if caught and possible fraud charges. The fake buyer would sign a civil commercial in confidence that they could not discuss the details with a 3rd party or use the information gained in commercial operations

[Icarus2001]

You are assuming that one of the Qantas group of companies is not a genuine creditor. I would be willing to bet that QF supplied some service to VAH that they may wish to be paid for. That means they have a place at the table.

[novice110]

Thanks rattman...

Was hoping there would be some protection against that idea.

Hopefully nobody leaks the information - you would never know I guess.

[Sunfish]

Of course it will leak and QF will get it if they want it, which I doubt. But by the time it leaks it will be all over one way or another.

[SHVC]

Could this be as simple as VA owing money to QF for the use of a ground cart etc?

[Paragraph377]

And, finally, it appears Paul Scurrah (pictured above) could have a challenger for the top role at Virgin following the administration process, with John Thomas telling the AFR (https://www.afr.com/companies/transport/ex-virgin-australia-heir-mulls-running-recapitalised-airline-20200422-p54m1d) he would throw his hat in the ring for the CEO position if it became available. Thomas is no stranger to Virgin, having led the airline’s domestic and international operations between 2016 and 2017.
One would expect Scurrah to be rolled. Being 12 months into the job and not knowing that the airline was as deep in the mire as is now being reported is not a good look. There really isn’t a place in the new Airline, in whatever format that will be, for the current CEO, CFO, COO and Board.

[rattman]

Of course it will leak and QF will get it if they want it, which I doubt. But by the time it leaks it will be all over one way or another.

Administrators reports are made public so they dont have to be leaked, they can down load of the administrators website like everyone 8 days before the final meeting.

I assumed the person was reffering to qantas purposely getting involved as a roadblock / spoilter to prevent someone taking over

[novice110]

I was wondering about all that 'commercial in confidence' stuff that won't be in the administrator's report.

Not so much in providing a roadblock, but finding out ALL of the numbers / arrangements the competitor has had in place and will have in place.

Just thought it could be an unfair advantage (free kick) to the QF group - or is this stuff leaked both ways anyway ?

[stevieboy330]

https://cimg5.ibsrv.net/gimg/pprune.org-vbulletin/620x348/wuhan_australia_452a799495cc19604e9430f6b27fff4099dca4bf.jpg
How about this?
I'm starting to think anything is possible.

[2020Balance]

One would expect Scurrah to be rolled. Being 12 months into the job and not knowing that the airline was as deep in the mire as is now being reported is not a good look. There really isn’t a place in the new Airline, in whatever format that will be, for the current CEO, CFO, COO and Board.

And all the assistants, acting assistants, deputy acting assistants, specialist assistants and the rest of the oxygen thieves to those listed above

[Paragraph377]

And all the assistants, acting assistants, deputy acting assistants, specialist assistants and the rest of the oxygen thieves to those listed above
I dare say that a new ‘mean and lean’ structure will finally see the end of the rewards for mates who have been there from the beginning and it will see the end of a puffed up structure and created roles. Keep the structure clean and lean, pay the pilot group well and have an adequate safety and compliance group. If they are going to compete with JQ they are going to have to be streamlined. No more numpty’s spending their days wandering from floor to floor in the Village chatting in cubicles and in meeting rooms. No more cake celebrations because somebody’s poodle turned 5 or somebody’s toddler did it’s first **** in a proper toilet. Productive work is profitable work. Things will have to change.

[Buster Hyman]

I dare say that a new ‘mean and lean’ structure will finally see the end of the rewards for mates who have been there from the beginning and it will see the end of a puffed up structure and created roles.
You must be new to the Aviation industry then...:}

[Superman1]

I dare say that a new ‘mean and lean’ structure will finally see the end of the rewards for mates who have been there from the beginning and it will see the end of a puffed up structure and created roles. Keep the structure clean and lean, pay the pilot group well and have an adequate safety and compliance group. If they are going to compete with JQ they are going to have to be streamlined. No more numpty’s spending their days wandering from floor to floor in the Village chatting in cubicles and in meeting rooms. No more cake celebrations because somebody’s poodle turned 5 or somebody’s toddler did it’s first **** in a proper toilet. Productive work is profitable work. Things will have to change.

And a move to Melbourne or Sydney in a city with a much greater and competitive talent pool to select from will help this.

All the specialists, advisors and leaders who for years have driven up or down from the Sunny or Gold Coast and rolled in to the Village at 7am and we’re back home or on the water fishing by 2:30 won’t be happy.

[non_state_actor]

One would expect Scurrah to be rolled. Being 12 months into the job and not knowing that the airline was as deep in the mire as is now being reported is not a good look. There really isn’t a place in the new Airline, in whatever format that will be, for the current CEO, CFO, COO and Board

If you look at the Byzantine structure of the airline with the laundry list of Holding Companies good luck to anyone understanding how it works. It would appear that every aeroplane has its own holding company attached to it. It is a very 'Virgin' company in that sense if you look how the parent company is organised in the Caribbean. You could come to the conclusion that it is designed that way so noone really knows how it works, let alone a new CEO 12 months into the job. Probably one of the reasons they brought back the original CFO he might know something.

No more numpty’s spending their days wandering from floor to floor in the Village chatting in cubicles and in meeting rooms. No more cake celebrations because somebody’s poodle turned 5 or somebody’s toddler did it’s first **** in a proper toilet. Productive work is profitable work. Things will have to change.

:}:D Very funny.

[2020Balance]

I dare say that a new ‘mean and lean’ structure will finally see the end of the rewards for mates who have been there from the beginning and it will see the end of a puffed up structure and created roles. Keep the structure clean and lean, pay the pilot group well and have an adequate safety and compliance group. If they are going to compete with JQ they are going to have to be streamlined. No more numpty’s spending their days wandering from floor to floor in the Village chatting in cubicles and in meeting rooms. No more cake celebrations because somebody’s poodle turned 5 or somebody’s toddler did it’s first **** in a proper toilet. Productive work is profitable work. Things will have to change.

And the colouring in competition award presentation at the weekly sausage sizzle for the Newfarm homeless

[ozbiggles]

Speaks volumes for your characters gentleman rejoicing in people losing their jobs.
You have little snippets of 2nd hand information that you use your bias to try and turn into justification for your woes.
And you keep rinsing and repeating it here to make it stick.

[-41]

Ozbiggles, finding a new job will not be an issue for a woke employee in charge of diversity at the village.

I don’t see any evidence of posters rejoicing front line/operational/key staff losing jobs.