AFR - Virgin Administrators come under fire for doubtful forecasts

[Con Catenator]

Potential buyers of Virgin Australia have questioned the bullish profit forecasts issued by Virgin's administrator, Vaughan Strawbridge. Now buyers have to think about Regional Express Holdings potentially flying capital city routes.

May 12, 2020 – 12.00am

The already loopy Virgin Australia sales process got a little crazier on Monday when the administrator, Vaughan Strawbridge, put demands on the potential buyers that are frankly ridiculous.

Strawbridge sent a letter to potential buyers demanding they break their bids into 20 separate components including the amount of the airline's $6.8 billion debt they will roll over, the level of employees being retained and the support from government.

After seeing the letter, one potential bidder told Chanticleer: "This is nuts".

The reaction is understandable given that indicative offers (https://www.afr.com/link/follow-20180101-p54riu) have to be lodged with Strawbridge by Friday. This time line barely allows any time for potential buyers to engage with creditors, government or unions.

Virgin's administrator Vaughan Strawbridge has flummoxed potential bidders with his latest demands. David Rowe

Even before this missive was sent by Strawbridge the Virgin sales process was detached from reality.

Potential buyers were told that an airline that lost $2 billion over the past decade was suddenly going to shoot the lights out within three years.

Incredulous potential buyers were asking themselves how could an airline that made EBITDAR of between $843 million and $900 million over the past five years suddenly make $1.5 billion in 2023?

EBITDAR is defined as earnings before interest and tax excluding costs associated with aircraft rentals and depreciation and amortisation.

What was even less plausible was the breakdown of the underlying profit numbers for fiscal 2023 issued by Strawbridge.

Ex-Virgin Australia contender would run Virgin Mark II (https://www.afr.com/companies/transport/ex-virgin-australia-heir-mulls-running-recapitalised-airline-20200422-p54m1d)

He forecast Virgin Mark II would earn $1.1 billion EBITDAR from its domestic operations and from its short haul international operations, $150 million from its long haul international business and $150 million from a new low-cost carrier in the domestic market, which would compete with Jetstar.

The idea that Virgin could develop and launch an entirely new discount airline service while trying to extract itself from insolvency is implausible, especially considering it has not been able to make a profit on group revenue of $5.8 billion.

The new discount airline is represented in the documents as a blank aircraft.

Also included in Strawbridge's forecast for 2023 was about $40 million in EBITDAR from cargo flights. This deserves to be treated with great scepticism given cargo is one of the most competitive aspects of aviation and has very thin margins.

Strawbridge's business plan for Virgin Mark II does not contemplate large-scale job losses. It seems to want to preserve complexity rather than pursue simplification of the business.

Another wildcard in the Virgin sales process is the sudden intervention of Regional Express Holdings, which has revealed to The Australian Financial Review it wants to spend $200 million launching new capital city services.

Rex deputy chairman John Sharp says the Virgin collapse has provided an opportunity for the regional airline to lease 10 narrow-bodied jets and fly between the capital cities including the highly profitable "triangle" between Sydney, Melbourne and Brisbane.

ACCC boss says Virgin Mark II needs to be full service (https://www.afr.com/companies/transport/accc-boss-says-virgin-mark-ii-needs-to-be-full-service-20200426-p54n9v)

Rex's plan was greeted with scepticism in some quarters of the aviation industry simply because it only has about 1 per cent of the domestic market.

But it is worth remembering that the cumulative net profits of Rex over the past six years exceed the combined net earnings of Virgin and Qantas over that same period.

A move from being a purely regional airline to offering capital city flights would be a big step up for Rex. But it can build its business upon its existing infrastructure.

A new entrant in the domestic market offering a service between capital cities that is pitched somewhere between Qantas and Jetstar is bound to be positive for consumers and not so great for Virgin Mark II.

Rex is facing a potential capital expenditure bubble in the future from the cost of replacing its fleet of 60 Saab 340 aircraft, which are more than 20 years old.

But executive chairman Lim Kim Hai (https://www.afr.com/link/follow-20180101-p54qb3) told The Australian Financial Review last week Saab has committed to support the aircraft for another 10 to 15 years.

"In terms of support from Saab they have given an undertaking and they have continued to have military customers and with a military customer any time you sign on with them you have to undertake to provide support for 20 years," Lim said.

"So, in terms of support from Saab, we can be assured that over the next 10 to 15 years there is going to be the support as long as Saab is still going to be around. There is no hard deadline for the Saab."

[MickG0105]

But it is worth remembering that the cumulative net profits of Rex over the past six years exceed the combined net earnings of Virgin and Qantas over that same period.
That's cute! We bundle in the financial train wreck that was VA and then stretch the period under consideration back just far enough to include QF's motza 2014 loss. Look at the past five years and it's a markedly different story.

[Servo]

More bull**** story writing by so called journalists. I refer to same in another thread. They cant help themselves.

I am sure they were told "this is nuts".

F$%k Off. Maybe I should get into writing for the papers, seems you dont need to verify, justify or even be truthful with what you put in writing and in print.

[MelbourneFlyer]

Why is this article "bull****"? Do you have any proof it's not? The media seem to be all over this and the AFR obviously has connections everywhere.

[Denied Justice]

The AFR is one journal that does have reasonable credentials, so I don’t think this story is bull**** Servo.

[TCAS v2]

Servo - You might have to re-think the term "bull****". The AFR has a fairly good track record on drilling deep into these types of issues and getting the answers. It's fine to disagree, but they are certainly not as you describe.

Being told to 'F$%k Off'' isn't really eloquent mate.

[LostWanderer]

The AFR is one journal that does have reasonable credentials, so I don’t think this story is bull**** Servo.

Agreed. AFR is generally a pretty respected journal with a lot of contacts.

I have to agree with what they are saying, those earning forecasts for the next few years are pure fantasy and utterly ludicrous. If any of the buyers anxiously jump on board believing the hype from the administrators on these numbers and think they can actually make that sort of money so quickly, I think VA Mk2 is already headed towards a swift end.

[ozbiggles]

I agree with the statement the AFR is generally pretty good but this story has been placed
Like all business it is a case of buyer beware and to do due diligence so what is this story saying? That the buyers are stupid?
And they offer up the typical unnamed source, every slack jurnos go to, to offer up the startling quote of “this is nuts” and then go onto talk about Rex so no surprise who wanted this story run. I don’t believe the numbers myself but I don’t expect a salesman to offer me the best deal or the truth at any time so again what is the point of this ‘article’?

[neville_nobody]

Interesting the AFR hasn't run the same level of skepticism over Rex's idea of creating a jet operation from zero in a few months. They have bought the whole thing hook line and sinker and all Rex have said is they are looking at a business plan with jets.

[Arctaurus]

These "comments" thrown into the public arena are probably designed to disrupt potential bidders from getting the show on the road again (as unlikely as that still is). It positions REX into a better position if Virgin goes into receivership.

Of more real action, Alliance and a deal to buy VARA could be interesting. it would still keep Alliance in a niche market, but at a much higher level. That is a real possibility. Dump the ATRs.

[lucille]

From the article : "But it is worth remembering that the cumulative net profits of Rex over the past six years exceed the combined net earnings of Virgin and Qantas over that same period."

What point does this statement intend to convey? How does it make any sense to combine net profits of QF and VA and then come up with a number which probably the "cumulative net profits" of your average Uber driver over the past six years would also exceed.

This article strikes me as being sourced from a media release by Rex's spin doctors. I cannot imagine any journalist spending the time seeking out and then adding up the profits and losses of each company for the past six years. Why choose six years, why not ten, why not two?

It is possible that Servo may not be so far off the mark after all.

[Goat Whisperer]

Dump the ATRs.

The ATR fleet is no longer part of VARA. And with renegotiated leases could be viable.

[B772]

I expect the administrators forecast of $5B p.a revenue (Average of $96.154M per week) to be a pipe dream.

[MickG0105]

Taken from news.com.au

Virgin Australia customers owed refunds to be offered ‘conditional credits'

Quote:

’"He said the administrators were considering whether Virgin Australia would need interim funding to allow the business to keep operating until a second meeting of creditors, which they propose to hold in August.

The administrators are seeking permission to issue conditional credits to customers that had booked flights cancelled due to the pandemic which could be honoured by an acquirer, Mr Strawbridge said.

“Potential buyers may be motivated to extend these conditional credits as part of any restructuring or recapitalisation of the Virgin Companies’ business for the purposes of maintaining and enhancing the customer goodwill associated with the Virgin Companies,” he said.

He added the airline is seeing a rise in credit card charge-backs from customers seeking refunds. There have been around 340,000 requests for refunds after cancelling 65,000 flights between March 1 and April 30.

That is a potential drain on cash it holds in accounts.

The travel credits will be valid for the administration period, and customers who have not claimed or used the credits during the process are "unlikely to receive a 100 per cent refund on any restructuring or upon liquidation".

Mr Strawbridge said the credits would preserve goodwill in the airline and make it more attractive to potential buyers."

Frankly I'm surprised that that story isn't generating more widespread interest/concern, particularly the

The travel credits will be valid for the administration period, and customers who have not claimed or used the credits during the process are "unlikely to receive a 100 per cent refund on any restructuring or upon liquidation.

bit.

If I were one of the thousands of Virgin customers, sorry, guests, holding a travel credit I'd be extraordinarily pi55ed off. I've been done out of a refund at a federal court hearing that I had no representation at such that I'm now effectively being treated as an unsecured creditor but with no representation on the Committee of Inspection.

As to the 'travel credits will be valid for the administration period', how much flying and on what routes is likely to occur during 'the administration period'? The Administrator is effectively rissoling the customers here and it's all gone under the radar.

And it's made all the more galling knowing that PS is still trousering twenty large a week ... to do what exactly?

[MickG0105]

Well it seems that the 'liabilities' doesn't just stop there:

https://www.fedcourt.gov.au/__data/assets/pdf_file/0003/76251/Interlocutory-Application-1252020.pdf
That is somewhat astounding, isn't it?!

6. The conditional credit will only be able to be redeemed for a limited period and will have to be redeemed before the earlier of:

(a) a restructuring or recapitalisation of the Virgin Australia Group Ent ity that issues the credit (unless the right to redeem such credits, or their equivalent, is expressly preserved and extended as part of that restructuring or recapitalisation); or

(b) a liquidation of the Virgin Australia Group Entity that issues the credit.

It may not be possible or practical for Regional Airlines Pty Ltd Virgin Australia Airlines Pty Limited or Virgin Australia to resume commercial flights during this period and nothing in this Proposal should be understood as a promise or warranty that eith er company will do so.

7. A customer's use of the conditional credit will be subject to the availability of flights and, if applicable, payment of any fare differences and applicable fees, taxes and airline surcharges if the credit is not sufficient to cover them or the credit is not redeemable for them. Upon booking a flight with a conditional credit, the terms and conditions applicable to that flight and fare type will apply.

8. A conditional credit cannot be exchanged for a refund or unconditional credit. ...


How is this shafting not getting some airplay?

[Rashid Bacon]

https://www.fedcourt.gov.au/__data/a...on-1252020.pdf (https://www.fedcourt.gov.au/__data/assets/pdf_file/0003/76251/Interlocutory-Application-1252020.pdf)

Can anyone who understands legal documents explain in laymans language what this really means ?? :confused:

[Denied Justice]

And it's made all the more galling knowing that PS is still trousering twenty large a week ... to do what exactly?

I really hope you don't mean he's earning $ 20,000 per week ???

[Ragnor]

https://www.fedcourt.gov.au/__data/a...on-1252020.pdf (https://www.fedcourt.gov.au/__data/assets/pdf_file/0003/76251/Interlocutory-Application-1252020.pdf)

Can anyone who understands legal documents explain in laymans language what this really means ?? :confused:

Not sure, looks like they’re trying to protect the self from that class action that been taken against travel industry where people who purchase holidays and paid for airfares are entitled to cash refunds. A lot in that document tho.

[Paragraph377]

Frankly I'm surprised that that story isn't generating more widespread interest/concern, particularly the
bit.

If I were one of the thousands of Virgin customers, sorry, guests, holding a travel credit I'd be extraordinarily pi55ed off. I've been done out of a refund at a federal court hearing that I had no representation at such that I'm now effectively being treated as an unsecured creditor but with no representation on the Committee of Inspection.

As to the 'travel credits will be valid for the administration period', how much flying and on what routes is likely to occur during 'the administration period'? The Administrator is effectively rissoling the customers here and it's all gone under the radar.

And it's made all the more galling knowing that PS is still trousering twenty large a week ... to do what exactly?

A challenge for Virgin will be any of the customers who have been stiffed by their collapse. VA risks having customers move over to Qantas as Qantas will still be seen as ‘reliable and safe’. Virgin on the other hand has a dark cloud hanging over its head. The new entity can redeem itself over time, but there will be an element of customer uncertainty for some time also. If they look after all those who have been inconvenienced they may win their loyal customers back. It is passengers that generate the big bucks so you don’t want them offside.

As for Scurrah, well he was the Captain of the ship for over a year. Captains should go down with their ships. Once things are all done and dusted and a new owner(s) is/are found there should be no need to keep ‘Mr $20k per week’ on the books. Out with pretty much anyone managerial prior to the collapse. CEO, COO, GM’s and the Board, all gone.

[Variable Incidence]

A challenge for Virgin will be any of the customers who have been stiffed by their collapse. VA risks having customers move over to Qantas as Qantas will still be seen as ‘reliable and safe’. Virgin on the other hand has a dark cloud hanging over its head. The new entity can redeem itself over time, but there will be an element of customer uncertainty for some time also. If they look after all those who have been inconvenienced they may win their loyal customers back. It is passengers that generate the big bucks so you don’t want them offside.

As for Scurrah, well he was the Captain of the ship for over a year. Captains should go down with their ships. Once things are all done and dusted and a new owner(s) is/are found there should be no need to keep ‘Mr $20k per week’ on the books. Out with pretty much anyone managerial prior to the collapse. CEO, COO, GM’s and the Board, all gone.

Oh, I know. Jane Hrdlicka would be perfect instead!

[Ragnor]

looks like Deloitte are trying to get out of their obligations, i thought they are responsible for all running cost whilst they had the reins.Virgin sale: Administrators don’t want JobKeeper bill The Australian Taxation Office is in discussions with the administrators of Virgin Australia to determine to what extent they should be liable for any overpayments made to the airline’s employees under the federal government’s JobKeeper scheme.

In the Federal Court on Friday morning, the ATO asked for more time to discuss the issue with Virgin’s administrator Deloitte.

It also said it wanted to consider whether there should be any restrictions placed on the waiver of personal liabilities granted by the court to Deloitte for Virgin’s incurred debts during the administration process.

The court will now reconvene next Wednesday to debate or finalise these issues.

The administrators have asked the court to consider that their personal liability be limited where the airline needs to enter into new contracts required to maintain operations during the administration process.

Specifically they want to avoid personal liability for payments under the federal government’s coronavirus wage relief subsidy, JobKeeper
More than 8,200 of Virgin Australia’s 10,000 employees have claimed a total of $24.8m in JobKeeper payments.

On Wednesday the commonwealth Attorney-General also sought to intervene in the proceedings in relation to JobKeeper payments to Virgin staff and the federal government’s Fair Entitlements Guarantee (FEG) scheme, which pays workers’ entitlements if their bankrupt employer cannot.

The administrators have estimated that the value of employee entitlements that would crystallise on the liquidation of the group is approximately $450m.

[MickG0105]

I really hope you don't mean he's earning $ 20,000 per week ???
That is exactly what I mean. He is currently being paid somewhere between $21,500 and $25,000 a week. What his To Do list and calendar look like given current circumstances is anyone's guess.

[B772]

I have been told some of the initial buying interest in Virgin has waned. This being the case only about 12 parties are expected to lodge a non binding bid by the deadline of 6 pm today. This number will further dwindle with the passage of time due to the heavy baggage in the group. It could end up with no final bids acceptable to the administrator. In this event the administrator will be looking at liquidation.

[SHVC]

I have been told some of the initial buying interest in Virgin has waned. This being the case only about 12 parties are expected to lodge a non binding bid by the deadline of 6 pm today. This number will further dwindle with the passage of time due to the heavy baggage in the group. It could end up with no final bids acceptable to the administrator. In this event the administrator will be looking at liquidation.

Out of curiosity what would be a minimum bid by your guess or anyone else? Cameron Dick seems to think it’s as easy as going into administration the debt is gone and off ya go. This was what he said this morning on an interview with Karl Stefanovic

[Variable Incidence]

Anyone know how it works? Is the debt just written off and you’re left with aircraft leases and terminal leases etc? Seems the new QLD Treasurer reckons that V2 would almost start with a clean slate? Seems somewhat improbable!

[normanton]

It depends what all the secured creditors agree on!

[rmm]

I have been told some of the initial buying interest in Virgin has waned.
Seems to be so. The article linked below claims 8 and possibly down to 3 serious bidders by Monday.

https://www.brisbanetimes.com.au/business/companies/virgin-australia-cash-fears-as-airline-down-to-its-last-100m-20200515-p54tex.html

[Servo]

So it went from 19 interested "parties" to 8, to 3. I wonder if they were scared off from all the negative press and statements made by various parties, or they never really existed (that is they were only ever tyre kickers and wannabes)?

The figure of 19 was stated somewhere, I am sure................

Its in here, second paragraph:

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

[Ragnor]

I would think the 3 (which was always no more than that to begin with) would be genuine. Real question is, are they going to cough up the required figure that Deloitte need to make it work.

[Con Catenator]

https://www.businessinsider.com.au/v...-points-2020-5 (https://www.businessinsider.com.au/virgin-australia-fly-again-velocity-program-redeem-points-2020-5)

That's a very optimistic view of where this is headed - I would question the source of all this new found evidence of a re-start ???

[zanthrus]

Virgin was a dead duck the second it went to Administration. It was insolvent and the managers waited too long to make the decision. Wind it up now and get the employees their entitlements at least. Another few weeks of jerking about with “investors” and their will be nothing left to divide up.

[B772]

Now that the initial offers of interest has closed expect to hear rumours from parties that have walked away. One rumour from a party given access to the data room was that Virgin airfares would need to increase by 40% for the airline to be financially viable. The party lost interest upon reaching this conclusion after accepting the fact the new airline would be attacked by both Jetstar and Qantas.

[MickG0105]

https://www.businessinsider.com.au/v...-points-2020-5 (https://www.businessinsider.com.au/virgin-australia-fly-again-velocity-program-redeem-points-2020-5)

That's a very optimistic view of where this is headed - I would question the source of all this new found evidence of a re-start ???
Interesting that Velocity has re-opened domestic seat bookings but that 'other redemption opportunities aren't available for the time being'. So, Velocity is happily writing only the cheques that they don't have to cash.

Bear in mind that Velocity is not only a separate entity but it is also a creditor. You've got to wonder if this is some sort of inter-company square-up of the rumoured to be $200 million debt owed to Velocity by Virgin.

[Denied Justice]

I don’t understand how they can re-open bookings when the status of the company is so unresolved.

This has to be positioning for the day of reckoning when the final outcome will be determined as to who gets what.

This is a very complex set of circumstances.

[SHVC]

If it’s still in administration come September and aircraft are flying wouldn’t Deloitte be responsible for any loss making flights? If so, would it be reasonable to assume they know more then they’re letting on.

[ampclamp]

For SHVC.

From the Guardian:

To do this, Strawbridge and the other administrators have also had to convince (https://www.theguardian.com/business/2020/may/12/virgin-australia-administrators-move-to-re-offer-credits-for-cancelled-flights) the federal court judge John Middleton to make extraordinary orders on Friday that allow them to avoid personal liability for the vast bulk of debts the airline continues to incur on their watch.

They’ve also taken legal action (https://www.theguardian.com/business/2020/apr/30/virgin-australia-launches-us-legal-action-to-protect-aircraft-from-being-seized) in the US to protect the airline’s assets from creditors there.

https://www.theguardian.com/business/2020/may/16/high-wire-act-virgin-australia-keeps-a-bare-bones-service-in-the-air-as-it-searches-for-a-buyer

[wheels_down]

If it’s still in administration come September and aircraft are flying wouldn’t Deloitte be responsible for any loss making flights? If so, would it be reasonable to assume they know more then they’re letting on.
The longer it drags on the more risk Deloitte needs to take on in the form of more loans to keep the joint running.

They already have $200m taken out. They will want $300m back for that gesture.

[SHVC]

So with that, would it appear they’re not confident in the business themselves? That’s why they want a fast transaction

[Con Catenator]

One of the bidders has made the point that Virgin's liquidity position remained a going concern, with the central question being whether the airline could make it to the second creditors' meeting in August and still be solvent. So, the question is why would anyone bid for the company now, when it would be much cheaper to wait for receivership which would remove all liabilities to creditors and allow a clean slate to start again? :confused:

[BNEA320]

One of the bidders has made the point that Virgin's liquidity position remained a going concern, with the central question being whether the airline could make it to the second creditors' meeting in August and still be solvent. So, the question is why would anyone bid for the company now, when it would be much cheaper to wait for receivership which would remove all liabilities to creditors and allow a clean slate to start again? :confused:
correct me if I'm wrong, but can't admin get rid of a lot, maybe not all creditors ?

[Icarus2001]

Only if the creditors agree.
Despite how this is presented, it is the creditors NOT the administrators that are in the driving seat.

PS. The unsecured creditors are screwed.

[Kiwiconehead]

Only if the creditors agree.
Despite how this is presented, it is the creditors NOT the administrators that are in the driving seat.

PS. The unsecured creditors are screwed.

Nothing stopping some of those secured creditors just appointing their own receivers to go after their security.

Company I was at that eventually got liquidated went Receivers appointed -> Administration --> Refinance and receivers retired --> Still under administration --> New financier receivers appointed ---> liquidation

[Lookleft]

https://www.abc.net.au/news/2020-05-18/shortlist-of-four-suitors-to-take-over-virgin-australia/12258458

No surprises here.

[Ragnor]

Where is the QLD government in all this, they're quiet now, are they one of the 4 or are they teaming up and with whom would it be. After that diabolical interview Mr Dick done with Karl Stefanovic last week I hope they have nothing to do with VA 2.0.

[rmm]

Where is the QLD government in all this, they're quiet now,

Probably trying to figure out how VA 2.0 will work with closed borders.

[B772]

The latest news from Sand Pit is disturbing. Rumours of Etihad folding and Emirates downsizing with the majority of the A380's being mothballed and staff being reduced by 30,000. This will make the administrators role to get as much as they can out of Virgin to satisfy the creditors difficult. The administrator is saying there will be no Virgin retrenchments is hilarious and Virgin flight credits honored post administration even more hilarious.

[Ragnor]

Makes sense Etihad, Emirates and Qatar will be in for some very tough times how long they can sustain the down turn is anyone’s guess. Even easy jet, Ryan air and BA that primarily do EU.

QF, JQ and VA have the advantage of a domestic network as Australia is a large country as long as the premiers come to the party. Anastasia was on the news earlier she said QLD is closed and boarders will remain closed until September as they want two incubation cycles without a covid case.

[DirectAnywhere]

as they want two incubation cycles without a covid case.

Yeah, well good luck with that. That’s 28 days. I said it on another post, the states now seem to be pursuing a unilateral elimination strategy.

That was never supposed to be the game plan. If it is now, they need to come clean with the public as it’s extremely unlikely with the easing of restrictions that we will ever achieve that. This thing is here to stay. We need to find a way to manage it.

The point of the suppression strategy was to buy time
to enhance the health system’s capacity to manage an increase in COVID cases, not for it to morph in to an elimination strategy.

[WipperSnapper]

The administrator is saying there will be no Virgin retrenchments is hilarious and Virgin flight credits honored post administration even more hilarious.

No, they're saying the are not planning any redundancies while they are in charge, and why would they? Over 8000 of the 9250ish employees are currently stood down being paid by the government and the remaining staff still working are having their wages subsidised by the government. By the time JobKeeper finishes and however many remaining stood down staff are actually looking at redundancy, Deloitte hopes to have sailed off into the sunset with their hundreds of millions.

The direction of the media is now that Deloitte are trying to retain as many jobs as possible in VA mk 2, that would mean they do see a requirement for redundancies yes?

Anastasia was on the news earlier she said QLD is closed and boarders will remain closed until September as they want two incubation cycles without a covid case.

She also said they're open to looking at a travel bubble with NT, ACT, SA and WA. Her "concern" with NSW and Vic is they are still having community transmission cases showing up where the other states appear to have that under control. These aren't big markets, but it is a start. I bet there's a heap of people in those states that will travel to QLD or between states if that's the only places they're allowed to go!

[Fliegenmong]

You live in Melbourne....that's very unfortunate, but anyway, say you live in Melbourne...you fly to ADL, thence on to BNE or OOL??

And this is different from going direct Melb to OOL / BNE?

[TBM-Legend]

One of the bidders has made the point that Virgin's liquidity position remained a going concern, with the central question being whether the airline could make it to the second creditors' meeting in August and still be solvent. So, the question is why would anyone bid for the company now, when it would be much cheaper to wait for receivership which would remove all liabilities to creditors and allow a clean slate to start again? :confused:


The Fin Review today!

​​​​​​https://www.afr.com/companies/transport/only-enough-cash-to-get-through-the-sale-process-at-virgin-deloitte-20200518-p54tvt

[rmm]

I would imagine after hearing some of the news broadcasts today about WA & QLD borders staying closed far longer than anticipated
it's becoming hard to see a VA 2.0. (Hope I'm wrong though) WA premier even stating indefinite closure.

[non_state_actor]

Problem with waiting for receivership is that you lose the AOC and all the instruments. 5+ years to get all that back. Meanwhile REX is up and running as well. Best bet is to get in now and at least keep everything in order.

[Ragnor]

REX is a looooong way off from being a jet operator, also 200m wouldn’t even come close.

[non_state_actor]

REX is a looooong way off from being a jet operator, also 200m wouldn’t even come close.

They are closer than someone off the street applying for an High Capacity AOC in August though.

[didrechambers77]

I mean this post for no ill intent but to clear the perceptions made already with a true reality check with from the inner circle.
Your unions have already been briefed for the number of losses on the way, for each workgroup and entity. This was included in the brief to the bidders.
The business is easier to buy at a fire sale than a garage sale. (Doesn't take a genius to work out what I'm indicating).
The Bain meeting only took 32mins from the ELT presentation and was cut short at their request. Its clear they intend to run the business their own way.
Strawberry man hasn't returned any of Paul's calls since the presentations, nor that of the ELT this week.
Any hope information or perceptions intended for you to believe on Workplace is false, its their 'insurance' plan due to the prominent mental health issue the business has. (Lu dropped in convo their premium's had increased 31% because of recent incidents).

The Scurrah was never here for a long time, just a quick one. His history is of commitment to roles is barely 3 years and doesn't exactly leave a path of profitability from past organizations.
The remarks of #trustPaul etc, and #paul4pm are cringe worthy and shows the toxic culture VA has bred into their staff.

Anyone holding hope the Business will return to the size and complexity it was, is drunk at the wheel. Use this time to upskill and contingency plan, you'll likely need it.

[Climb150]

Didrechambers777

Have to agree with you on this. I would be surprised if Virgin had more than 20 planes at relaunch. If it comes back at all.

It's not being nasty, just reality.

[didrechambers77]

Most CEO's bring their own people and clear the decks in the first 6 months, instead he had no one except Caz, Courtz and old Fiddly Fingers (more on the row 30 incident later).
They had their little pow-wow at the former Skase complex, Marina Mirage last year.... "Red Hot and relevant", they spruiked the 4 year road map ahead and how strong a position we're in and how the special sauce is back... again it was just hype. And so the COO was appointed, late night chats and a tap on the shoulder you have someone's first C-suite gig at an organisation that size and complexity, with other experience. Righto, that's recipe for success. The same person who contributed to the complexities now tasked to undo it all.... ha!

I don't think its Paul its more so the hype reel Dani's feeding him, besides she's just the contact book for Richard. Still making demands to stay at the Calile at every visit for $290 a night.

And so they pulled up the following morning for a training session with the Suns at 6am, after "pool time with paul'', few dusty, few knew they were on the way out and others knew they were on the way up. But where was the plan? What was it?

The plan was, there was no plan. Just slash and burn. That blacked out room in Alpha Ground with the hype reel on the outside, is empty. I'm sure the bidders are asking themselves, was this ever going to work with that volume of debt?
Who knows? But the 750 jobs never came close, it ended at 349. The second sweep was already underway after Keith screamed across the table "there won't be an airline in 12 months if you keep at this snail pace", that was Feb2020.

They knew they were in trouble, pre-covid and the H1 results spoke for themself. Tried to glaze COVID all over it, but it didn't affect Aus until late Jan/Feb.

[Servo]

I mean this post for no ill intent but to clear the perceptions made already with a true reality check with from the inner circle.
Your unions have already been briefed for the number of losses on the way, for each workgroup and entity. This was included in the brief to the bidders.
The business is easier to buy at a fire sale than a garage sale. (Doesn't take a genius to work out what I'm indicating).
The Bain meeting only took 32mins from the ELT presentation and was cut short at their request. Its clear they intend to run the business their own way.
Strawberry man hasn't returned any of Paul's calls since the presentations, nor that of the ELT this week.
Any hope information or perceptions intended for you to believe on Workplace is false, its their 'insurance' plan due to the prominent mental health issue the business has. (Lu dropped in convo their premium's had increased 31% because of recent incidents).

The Scurrah was never here for a long time, just a quick one. His history is of commitment to roles is barely 3 years and doesn't exactly leave a path of profitability from past organizations.
The remarks of #trustPaul etc, and #paul4pm are cringe worthy and shows the toxic culture VA has bred into their staff.

Anyone holding hope the Business will return to the size and complexity it was, is drunk at the wheel. Use this time to upskill and contingency plan, you'll likely need it.

That's the horrible reality mate, how can I upskill in this environment and have a contingency? All I know is aviation. I only have one skill. Many factors have annihilated our savings as a buffer, when it all goes. We will be left with nothing, no house. Zero.

Not like I can go overseas either.

[normanton]

That's the horrible reality mate, how can I upskill in this environment and have a contingency? All I know is aviation. I only have one skill. Many factors have annihilated our savings as a buffer, when it all goes. We will be left with nothing, no house. Zero.

Not like I can go overseas either.
You are not the only one mate. People will find work elsewhere eventually, and never return to the aviation industry. It's just the sad truth of this situation, and there is nothing anyone can do about it.

[non_state_actor]

I mean this post for no ill intent but to clear the perceptions made already with a true reality check with from the inner circle.Your unions have already been briefed for the number of losses on the way, for each workgroup and entity. This was included in the brief to the bidders. The business is easier to buy at a fire sale than a garage sale. (Doesn't take a genius to work out what I'm indicating).The Bain meeting only took 32mins from the ELT presentation and was cut short at their request. Its clear they intend to run the business their own way. Strawberry man hasn't returned any of Paul's calls since the presentations, nor that of the ELT this week.Any hope information or perceptions intended for you to believe on Workplace is false, its their 'insurance' plan due to the prominent mental health issue the business has. (Lu dropped in convo their premium's had increased 31% because of recent incidents).

Is this with or without the debt holders consent?? If they don't have the debt holders agreement nothing will be happening. The first thing any consortium needs to find out is what the debt holders will be agreeing to.

[machtuk]

VA reminds me of the Titanic, "the pumps will buy time but only minutes", it's back is broken now all anyne can do is watch it go under leaving a wreckage of human hurt floating on the surface! -(

[Icarus2001]

If they don't have the debt holders agreement nothing will be happening. The first thing any consortium needs to find out is what the debt holders will be agreeing to. I think that you have hit the nail on the head, this has been lost in all the sales hype.

This industry will be decimated for many years to come. You know, I think we may be wrong in thinking like that, I think it will bounce back quicker and stronger than we realise. Lots of FOMO thinking will come out, "trip of a lifetime because who knows what is around the corner" type thinking. People wanting to take that trip they always dreamed of. Although many people have lost jobs, those in secure employment will have been saving money by not eating out, going to the pub or movies, music etc so they will be cashed up and happy to spend.

[Icarus2001]

No I disagree

The ones you speak of that want to travel, the 'Rebellion' type, will do so with what little cash they have left! Well ALL state and federal government workers are getting paid aren't they? Heck the school teachers must be a tough bunch as all governments were prepared to send them to a school full of students (as a test?) Nurses, who are also tough, police, AOs etc etc Not rebellion types...

People are living day to day these days Which people? Plenty for sure but not the majority I would suggest.

[wishiwasupthere]

the 'Rebellion' type

There must be plenty of that type where I live. It took 20 minutes to find a parking spot at the shopping centre yesterday, it was like the lead up to Christmas! Look at the beaches in Europe, humans have very short memories.

[didrechambers77]

Looks like a certain creditor is exercising their rights tonight gents, look out for another episode of Changing Rooms (not sure if its featuring Susie Willks)

[Ragnor]

There must be plenty of that type where I live. It took 20 minutes to find a parking spot at the shopping centre yesterday, it was like the lead up to Christmas! Look at the beaches in Europe, humans have very short memories.

Yep, I have seen the same thing. I am at the point where I don't understand why gyms are closed they're more essential than Bunnings and much cleaner. Surely these rouge states will succumb to pressure to allow air travel sooner rather than later.

[Section28- BE]

Link here: https://www.itnews.com.au/news/virgin-australias-loyalty-cio-decamps-to-icare-nsw-548555

Extract here:Virgin Australia's loyalty CIO decamps to icare NSWBy Justin Hendry (https://www.itnews.com.au/author/justin-hendry-1167397)
May 26 2020
12:07PM

https://i.nextmedia.com.au/Utils/ImageResizer.ashx?n=https%3a%2f%2fi.nextmedia.com.au%2fNews% 2fCaroline_Rockett.jpeg&w=480&c=0&s=1
Caroline RockettMoves on after two years.The chief information officer in charge of Virgin Australia’s loyalty scheme has made the jump to the NSW government’s nominal insurer after almost two years.

Caroline Rockett, who has been with Velocity Frequent Flyer since September 2018, joined icare NSW this week as its new digital and technology group executive.

She assumes the responsibility from chief operating officer Rob Craig, who has been acting in the role.........................................

Rgds
S28

[normanton]

Looks like a certain creditor is exercising their rights tonight gents, look out for another episode of Changing Rooms (not sure if its featuring Susie Willks)
Care to elaborate?

[Section28- BE]

https://www.actu.org.au/actu-media/media-releases/2020/statement-from-actu-president-michele-o-neil-on-virgin-bidders-meetings

Perhaps ?

For 'what' It is not Worth- right there, is where the Nut-Cutting/Crap starts/happens...............

Vis- Number and Value/Value and Number........

'IT' has occurred before..........., (there is precedence/history on how far 'one' can push..../pending the situation, it is possible to Over-Cook the show) , so short 'the memories/narrative'- Wishing a Good Result for all.

Rgds
S28- BE

[VH-ABC]

.........../‘what ‘do’.../ you.... -smoke-?— when ‘you’ type matey? F*@$ me you’re hard to follow.

[flamingmoe]

I got it on the 5th pass, speaks in riddles.

[Pundit]

re Section28 - BE, I can get into twisted elms, and grin, the intoxicated crackpot jailer is a prankster

[normanton]

It appears there was some media intervention today, in a certain Workplace group, that prevented the 'heavy hitting' questions getting answered. Very tactile and, for release at the right time.

The Kudos and Fluff continues.
Just translate that into English thanks.

[anonfly]

I can translate for you.
The “Dynamic Duo” 🤦‍♂️ Said sweet F*** all.
Which is unsurprising in the least. The “fluff” otherwise known as manure continues.

The whole thing reminds me of when I tell “The Boss” I’m only out for a few and I’ll be home by 10pm.
I know the truth, she knows the truth and we both know where it will end up. But we play the game anyway.
Only thing is, this isn’t a game and is far less funny in the morning.

[chookcooker]

I can translate for you.
The “Dynamic Duo” 🤦‍♂️ Said sweet F*** all.
Which is unsurprising in the least. The “fluff” otherwise known as manure continues.

The whole thing reminds me of when I tell “The Boss” I’m only out for a few and I’ll be home by 10pm.
I know the truth, she knows the truth and we both know where it will end up. But we play the game anyway.
Only thing is, this isn’t a game and is far less funny in the morning.
Specifically what did you want to know about?
emphasis on specifically

[anonfly]

Specifically what did you want to know about?
emphasis on specifically
Me personally, nothing. I didn’t expect any useful information as I’m well aware of the limitations about any information being released. Confidential and competitive information isn’t going to be released to employees. We will find out in due course along with the general public.
On that note the best source of information is likely to be the AFR, due to it being known that businesses involved in the process “leak” information to gain a competitive advantage. Like all things, take it with a pinch of salt. Sift through it all and you can gain some semblance of a incomplete picture.
I was just translating for normanton at the end of the day. They asked a question, I thought I could offer an answer.

[Chris2303]

I was referring to the 'heavy hitting' questions asked by some of the employees (most nothing to do with confidentiality), being ignored. This is perhaps due to a certain 'media presence' in which, will be tactically released end of next month. A documentary for all!

I get so sick of this "secret squirrel" stuff.

If you really know something, then say it. If you don't know anything don't say "wait until....", just keep quiet.

[-41]

Specifically what did you want to know about?
emphasis on specifically

Perhaps CEO selling the single fleet type to bidders whilst conveying the opposite with staff. Could be a mixed message to the sheep on Corporate Facebook.

[Tommy Bahama]

Perhaps CEO selling the single fleet type to bidders whilst conveying the opposite with staff. Could be a mixed message to the sheep on Corporate Facebook.

We should always be intellectually critical of the ideas we receive.

The garbage that's sprouted on the Corporate Propaganda Website is sickening. What's worse are some of the comments from the gullible masses, some of whom who fed from the trough with such vigour they can't help but regurgitate the swill.

Anyone with a modicum of intelligence could see all the problems that are now being amazingly being discovered years ago. A basic principle lost at Virgin was honesty keeps things really simple.

[didrechambers77]

Oh the 4Corners doco, yawn. That's just a freebie for brand engagement, organised by Danii and her blackbook again. Maybe she should go back and get those bunny teeth fixed and a degree first... Let's not forget the cringy full page ad's she signed off in March at $3m.... money down the toilet.

[didrechambers77]

Fraud is right throughout the Business,
Former GM then redundant comes back consulting as 'Reknor' and behold DoGoodLabs are onboard. No tender to market for product, the audacity he even took to email former colleagues for comparable pricing. Old Chin-Moody's husband does(did) a bespoke contract for courier services between the 3 sites in Sydney... highly doubt that was put out to tender.

Don't forget Steffie and Martina (the real dynamic duo) who had a muff affair, and organised a stretch yellow hummer for a team outing the same day the business announced a historic loss in 2016 of $657m.

[Icarus2001]

Do the adminstrators alone get to decide who the winning bid is, or due creditors/shareholders get a say?
The administrators are not in control despite appearances to the contrary.

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

The creditors vote for what they want to happen, the administrators simply propose what they think is the the best course of action (but for which party?).

[Buster Hyman]

I got it on the 5th pass, speaks in riddles.
Like Nostradamus, only makes sense after the fact...

[crosscutter]

Do the adminstrators alone get to decide who the winning bid is, or due creditors/shareholders get a say?

Is it as simple as the highest bidder wins, or is there an element subjective opinion involved?

Think of the administrator as the slimy real estate agent who spruiks and markets and then presents the best offers to the home owner (creditor). The real estate agent has no power as the home owner decides if the offers are good enough. Similarly there is nothing stopping another buyer bypassing the real estate agent and going straight to the home owner.

In time the administrator will announce in great fan fare who they perceive has the best offer. However, it’s not even close to a done deal. That’s why final binding offers will be due maybe end of June (I’m not sure) but the actual sale, if there is one, will likely not happen to August. That’s why the extra funding is required.

The horses have only just bolted out of the gates in this race.

[non_state_actor]

The real estate agent has no power as the home owner decides if the offers are good enough

No not exactly. It is decided by a majority of creditors and the majority of the debt holders. If there is no agreement it's the administrator's call.
When a poll is conducted, a resolution is passed if both:

more than half the number of creditors who are voting (in person or by proxy) vote in favour of the resolution
those creditors who are owed more than half of the total debt owed to creditors at the meeting vote in favour of the resolution.

This is referred to as a ‘majority in number and value’. If a majority in both number and value is not reached under a poll (often referred to as a deadlock), the chairperson has a casting vote.

[crosscutter]

Yes, very true...just when you think you can be clever, you’re proven wrong...such is life.

Your point is very relevant as is this clause:
The exercise of the casting vote is most appropriate in circumstances where either creditors with a majority in value have such an overwhelming interest that it is inappropriate to allow a majority in number who do not have the same monetary interest to carry the day, or vice versa;

[Colonel_Klink]

Is the Administrators SOLE aim is the best price or best chance of survival for the company? As someone said, Who are Deloitte working for?
Hypothethically.....
eg:
Bidder A are a group of Investment Bankers. They submit the highest bid as they see more value in the resale value of the company once they break it apart. That is their true motivation.

Bidder B is a Supermarket Chain that wants to buy an airline. They submit a bid $100 million lower. But claim greater industry expertise because they have a former airline CEO involved.

So the Administrator feels/cares that Bidder B have a better chance of survival as a new entity, so recommend to go with the lower bidder.
But the creditors actually get the final vote.

Or a scenario like that is possible?

The Administrator is required to come to a decision based on the interests of ALL creditors - and that includes employees, secured and non secured creditors, leasing Companies, etc.

If Company A in your situation was going to pay $100m more than Company B, but only operate 40 domestic aircraft, versus Company B who were going to pay slightly less but operate more aircraft, and hold on to the WB and VARA - there is a compelling argument that Company B might be in the greater interest of ALL creditors when compared to Company A.

My understanding is that the Administrator will have a recommendation of the preferred bidder - a majority of creditors in both terms of number AND value must approve the sale. Ultimately though, the Administrator has the final say if a consensus can’t be reached by creditors and have the authority to sell the business - although I would imagine if that occurred, the decision would be up for challenge in the courts.

So in summary, it is not necessarily the highest bidder that will be successful.

[Led Zeppelin]

- although I would imagine if that occurred, the decision would be up for challenge in the courts.

If there are no funds available (as is the situation with VAH after June), a court challenge would be meaningless.

[KRUSTY 34]

[QUOTE=Colonel_Klink;10795699]

If Company A in your situation was going to pay $100m more than Company B, but only operate 40 domestic aircraft, versus Company B who were going to pay slightly less but operate more aircraft, and hold on to the WB and VARA - there is a compelling argument that Company B might be in the greater interest of ALL creditors when compared to Company A.

Only if the Administrators have a fundamental lack of understanding as to what led VA into this mess in the first place.

[chookcooker]

If it was “telling” that Brookfield pulled their bid, is it equally “telling” they’re back? Or does that not suit the rhetoric?
:rolleyes:

[Colonel_Klink]

[QUOTE=Colonel_Klink;10795699]

If Company A in your situation was going to pay $100m more than Company B, but only operate 40 domestic aircraft, versus Company B who were going to pay slightly less but operate more aircraft, and hold on to the WB and VARA - there is a compelling argument that Company B might be in the greater interest of ALL creditors when compared to Company A.

Only if the Administrators have a fundamental lack of understanding as to what led VA into this mess in the first place.

For what it’s worth Krusty, I don’t think that’s actually a credible scenario. I was just trying to make the point that the highest bidder isn’t necessarily going to be the preferred option by the administrator.

From all the media - it’s hard to think the WBs survive. If they do - it will only be one of the current types.

And as for VARA - there is essentially no mention of them. All I keep hearing is one NB type. If you take that literally, then no more ATR or West Coast 320/F100. I just wonder if the advisors of the international bidders seriously understand the WA charter market. It makes money, has significant on carriage and is a pretty good for those WA corporate accounts....I sincerely hope that it survives.

[KRUSTY 34]

Thanks Colonel, I did take some of your remarks literally.

Hopefully the value of the West Coast Operations won’t be lost on the bidders, but I’m afraid if past airline administrations are anything to go by, I’ll doubt it.

[Ragnor]

[QUOTE=KRUSTY 34;10796105]


And as for VARA - there is essentially no mention of them. All I keep hearing is one NB type. If you take that literally, then no more ATR or West Coast 320/F100. I just wonder if the advisors of the international bidders seriously understand the WA charter market. It makes money, has significant on carriage and is a pretty good for those WA corporate accounts....I sincerely hope that it survives.

Is VARA under administration? legit question. I thought they were two separate AOC and business. ATR use to be on the VARA/Skywest books but now on Virgin

[Colonel_Klink]

[QUOTE=Colonel_Klink;10796528]

Is VARA under administration? legit question. I thought they were two separate AOC and business. ATR use to be on the VARA/Skywest books but now on Virgin

They are.....the only part of VA that is not under administration is Velocity. Why you ask? I have no idea!

[Ragnor]

Just wondering, after reading SMH this morning s$%t is getting real for VA. With Brookfield back on the scene yesterday this could cause legal action by the other 4 delaying the process. Government rejecting Deloitte request for funds to keep operating escalating fears among the 4 remaining bidders and unions liquidation could happen before a deal is reached.

[Denied Justice]

This from a post re the expected British Airways redundancies:

Employees often fail to grasp that the CEO has a list of priorities; The first is that 'The company must still be in business when the sun rises tomorrow.'.
The second is the stock-price
Third; The stock-holders.
Employees don't even come within the top 20. All the 'management-speak' about the employees being the company's greatest asset etc is pure BS.. In the eyes of a CEO, employees are a costly necessity, nothing more.

Employees are nothing more than a cost centre for any of the bidders. No one should be under any illusion that there is benevolence in their minds.

[ANstar]

I wonder how many of these "serious bidders" have just used this as an opportunity to get access to the "data room" to see where the money is made and lost before walking away and using that data to start up from scratch without the high debt load and industrial issues? Yes it takes time to get an AOC, startup etc... but now is the best time to do it as the market is pretty much non existant for the next 6-12 months anyways.

[Ragnor]

I wonder how many of these "serious bidders" have just used this as an opportunity to get access to the "data room" to see where the money is made and lost before walking away and using that data to start up from scratch without the high debt load and industrial issues? Yes it takes time to get an AOC, startup etc... but now is the best time to do it as the market is pretty much non existant for the next 6-12 months anyways.

That, would be smart of them. why buy an airline in the current environment QF and JQ will come back slowly. In the mean time they could start their own operation whilst confidence grows, and hey, there will be 100s of pilots keen and they will work for much less than what JQ pay just to get back in the game.

[chookcooker]

That, would be smart of them. why buy an airline in the current environment QF and JQ will come back slowly. In the mean time they could start their own operation whilst confidence grows, and hey, there will be 100s of pilots keen and they will work for much less than what JQ pay just to get back in the game.
Well lucky for the rest of us your genius is wasted flying the line at QF, those fools at Deloitte and Clayton Utz wouldn’t stand a chance against your cunning prowess.

[Sunfish]

Don’t get your hopes up.

‘They companies involved in these bids are concentrating on their absolute number one priority............

.........Which is their exit strategy from the business about three to five years from now.

They are not long term investors, except perhaps Temasek. Their objective is to clean out the business of any obvious stupidities, take or “acquire” all the businesses cash, load it up with humongous amounts of cheap (at present) debt and then flog shares in this lipstick bedecked pig to mum and dads super funds or stupid institutional buyers, making a cool billion or two in the float.

Unfortunately QF management can kill their float plans stone dead any time it wants to. Just wait till the float is underwritten and announced, then start aggressive discounting and he float fails.

My guess, unfortunately, is that Virgin is for the knackers yard because I can’t see a successful exit strategy for investors. Furthermore QF management are blameless.

[Des Dimona]

The reality is that it's dollars only that drives this forward. Any of these bidders will be looking at a quick turnover and sale because that's the way they operate. Does not matter what the business is.

I wouldn't mind betting that all the "data room" examination has provided is an idea of the true costs of VAH - bidders will run a mile at taking a percentage of the debt, staff agreements, existing leases etc etc into the future.

All they have to do is provide knock down bids that won't satisfy anyone and the show is finished.

The sooner this is rolled over and a fresh new entrant can get up, the better. It won't provide jobs for everyone, but it's a start.

The only doubt in my mind is who will the new owners be ?

[mrs nomer]

With the Administrators telling the bidders this afternoon to "cool their jets" for another 24 hours, the suspense must almost be too much for Carla who will by now be frothing at the mouth to find out if she'll get the gig. :E

[Arctaurus]

According to the AFR, if Bain did get up, Hrdlicka may be the Chairman, rather than CEO. If Scurrah did then stay on as CEO, it would be an interesting dynamic between the two.

[The Bullwinkle]

According to the AFR, if Bain did get up, Hrdlicka may be the Chairman, rather than CEO.
Wow!!! If that happens I wonder how long it would take before the administrators are called in again.

[Oz Pilot]

This from a post re the expected British Airways redundancies:



Employees are nothing more than a cost centre for any of the bidders. No one should be under any illusion that there is benevolence in their minds.

I’ve listen to every company podcast and what’s pathetic are their noses growing each time, and by shear coincidence VA have moved into the same building the administrators own! Come on, are you all that blind?

Our managers had sent out surveys over the last 5 yrs and for what? OUR negative responses have done absolutely nothing, your still steered us onto the reef, well done flight ops, well done and I bet you’ll still keep your jobs whilst those who warned you get the chop. I can holy hope you join us all in the dole queue where you belong.

[Blueskymine]

According to the AFR, if Bain did get up, Hrdlicka may be the Chairman, rather than CEO. If Scurrah did then stay on as CEO, it would be an interesting dynamic between the two.

It’s a bit more family friendly I gather than being CEO.

Well played.

[didrechambers77]

It’s a bit more family friendly I gather than being CEO.

Well played.

Even if Scuz was retained, he would be on a very tight leash. No one messes with Carla.
One comes from Darthmouth, the other..... well, that's the point isn't it.

[Lookleft]

No one messes with Carla.

Really? Tell that to AJ who gave her the boot over the JQ HK fiasco. She knows as much about running an airline as she does about dairy farming.

[Arctaurus]

She knows as much about running an airline as she does about dairy farming.

Err.........in both cases that would be zero.

[galdian]

Err.........in both cases that would be zero.

Think too many being far too harsh on the dear lady - surely just a case of cream rising to the top yet again?? :=

Of course other substances can rise also. ;)

Cheers

[ECAMACTIONSCOMPLETE]

Now that JQ/QF are ramping up their schedules for June/July, are Virgin able to follow suit given their administration status?

[Con Catenator]

........are Virgin able to follow suit given their administration status?

It will depend on whether the government keeps subsidising certain routes plus what course the administration actually ends up taking.

In any case, I would have thought an immediate restart by Virgin is problematic.

[Ragnor]

End of the day it is a business, so, if he does well that's just being a good businessman. It happens in other industry's and it seems to be OK.

[wheels_down]

Now that JQ/QF are ramping up their schedules for June/July, are Virgin able to follow suit given their administration status?
They can but they are on their own. They probably don’t have the ability to ‘test the waters’ as such across the market as that will involve red ink. It will just accelerate the demise.

It’s pretty clear now if they went to Canberra asking for another 4-6 weeks of subsidised routes, otherwise it will go to the wall, won’t work. Canberra will let it sink.

I wonder if Bain would let it go to liquidation or step up cash before it reaches that point, which is sometime within the next three weeks.

[chookcooker]

They can but they are on their own. They probably don’t have the ability to ‘test the waters’ as such across the market as that will involve red ink. It will just accelerate the demise.

It’s pretty clear now if they went to Canberra asking for another 4-6 weeks of subsidised routes, otherwise it will go to the wall, won’t work. Canberra will let it sink.

I wonder if Bain would let it go to liquidation or step up cash before it reaches that point, which is sometime within the next three weeks.
whats within 3 weeks?

[rmm]

I think he's referencing these dates posted in another thread,

1. June 11th -Government subsidies ceases.
2. June 12th -Binding bids.
3. June 16th -Administrators become liable for Aircraft leases.
4. June 30th- Administrators close sale, liquidate or have received further funding to operate.

[Ragnor]

Is that time line even achievable for a sale? Surely there is no company that could do due diligence in that tight time frame. We are not talking 10 or 20 million it’s billions on the table.

[KRUSTY 34]

Is that time line even achievable for a sale? Surely there is no company that could do due diligence in that tight time frame. We are not talking 10 or 20 million it’s billions on the table.

Yup! Something that just hasn’t seemed right to me from the beginning. Nearly $7billion in liabilities and virtually no market. Certainly nothing like it was before.

I’m desperately sorry for all my VA friends and colleagues, and I hope my instincts are wrong, but how do you make a small fortune in aviation?

Am I missing something?