Bain: Virgin Australia needs to be more like Virgin Blue

[MelbourneFlyer]

Seems that Bain Capital "would bring back some of the Virgin Blue vibe to Virgin Australia if its bid to take over the failed airline is successful."

“We want to bring back the best parts of the Virgin Blue culture and make flying fun again," says Mike Murphy, who is leading Bain's bid team.

Hope that doesn't also mean a return to Virgin Blue's LCC approach or its low-end customer service.

Bain Capital says Virgin Australia needs to regain "Virgin Blue fun" (https://www.executivetraveller.com/news/virgin-australia-bain)

[Icarus2001]

https://cimg7.ibsrv.net/gimg/pprune.org-vbulletin/1024x490/virgin_australia_profits_1024x490_3e9129886652485e5f7feeb786 a5d5f869c7b633.png

We want to bring back the best parts of the Virgin Blue culture and make flying fun again Oh FFS. we don't want fun, we want reasonable airfares and reliable arrival times, no one cares about the current KPI of departures on time, it is arrival we all care about.
Please don't bring back the face painting and the childish cabin crew antics.
The graph shows that "the good old days" were troubled as well.

[Led Zeppelin]

Carla can lead from the front dressed in a flimsy thinly designed tutu and prance up and down the aisles of the aircraft to drum up business. Unfortunately she is only available for flights between 9 am and 4 pm, so most business travellers will unfortunately miss out on this theatrical fanfare.

The former Virgin Blue cabin antics will be amateur half hour compared to Carla's impending debut.:D

VAH staff who end up working for this "new look" airline should be very afraid once she gets her mitts on the levers - God help us all.

[Climb150]

You guys aren't reading between the lines. "Bring back the fun" is a reference to when Virgin Blue first started out. Domestic only, one class cheap fares. They can't say they will be a bare bones cheap ticket operator cause that isn't a headline.

I really hope they get going but without the A2 person.
​​​​​​.

[The Bullwinkle]

You guys aren't reading between the lines. "Bring back the fun" is a reference to when Virgin Blue first started out. Domestic only, one class cheap fares. They can't say they will be a bare bones cheap ticket operator cause that isn't a headline.

I really hope they get going but without the A2 person.
​​​​​​.
Nah, I’d be happy to follow her example and just work 9 to 3 each day.
Although I’d probably have to quit after realising that there’s a bit of travel involved!

[Global Aviator]

Getting back to basics is certainly a great idea.

Employing any failed CEO from any industry, hmmmm not such a great idea!

We all want to see planes flying, whichever turn it takes, let’s hope the world gets airborne soon.

[non_state_actor]

Not sure that wedging yourself into the LCC corner is necessarily a smart idea. You will ceed all high end domestic and international travel to QF and just live in eternal price war hell with Jetstar and all the airports. You also compete with QF on your higher yielding flights. People will pay the extra $10 and fly QF.

I would have thought a Jetblue type of product or some variance on the current offering would have been the way to go.

[Climb150]

Not sure that wedging yourself into the LCC corner is necessarily a smart idea. You will ceed all high end domestic and international travel to QF and just live in eternal price war hell with Jetstar and all the airports. You also compete with QF on your higher yielding flights. People will pay the extra $10 and fly QF.

I would have thought a Jetblue type of product or some variance on the current offering would have been the way to go.

If a relaunched Virgin tries to compete with Qantas in the business travel/higher yield sector they will be crushed like a grape.

If they stay in Jetstar territory and don't bother mainline qantas too much they at least stand a chance of survival in the short term. Once you have some cash in the bank and not too much debt, then make a run at Qantas.

[Icarus2001]

Once you have some cash in the bank and not too much debt, hahahahh too funny

[TBM-Legend]

If a relaunched Virgin tries to compete with Qantas in the business travel/higher yield sector they will be crushed like a grape.

If they stay in Jetstar territory and don't bother mainline qantas too much they at least stand a chance of survival in the short term. Once you have some cash in the bank and not too much debt, then make a run at Qantas.


A bit of history will tell you that before making their last "run at QF" they had at least made a few buck. The days Godfrey then JB started their attack on QF it was game over. Read Sun Tzu's book "The Art of War". all answers are there.

[wheels_down]

One good thing about hiring Carla. She will wipe out....every....single....one of them.

Thats what Virgin needs. They need every Manager out. Everyone. Gone.

[Rashid Bacon]

One thing is for sure, those that Carla doesn't fire, will walk anyway after seeing the way she operates. No one needs to put up with the way she deals with people. Arrogant and dismissive are 2 characteristics that have been attributed by many who have worked with her in her previous part time jobs.

[Variable Incidence]

One thing is for sure, those that Carla doesn't fire, will walk anyway after seeing the way she operates. No one needs to put up with the way she deals with people. Arrogant and dismissive are 2 characteristics that have been attributed by many who have worked with her in her previous part time jobs.

I’m assuming Carla is J H😛. Just curious tho where does the name Carla come from?

[LostWanderer]

The game stores are going to be doing a roaring trade, imagine how much face paint and party games they will need crossing the pacific!

[wheels_down]

I’m assuming Carla is J H😛. Just curious tho where does the name Carla come from?
Name is C J H

[galdian]

Just interesting there remain "true believers" who think there'll be a VA mk2.

Geez I hope there're right and I'm proven hopelessly wrong.

[SecretAngel]

A bit of history will tell you that before making their last "run at QF" they had at least made a few buck. The days Godfrey then JB started their attack on QF it was game over. Read Sun Tzu's book "The Art of War". all answers are there.

Virgin made money early on, but then Qantas expanded JQ and started squeezing Virgin hard from below, while dominating the corporate market from above. JB moved upmarket to get out of that pincer (because it would have been harder to cut costs enough to compete head on with JQ, while QF free to keep reaping in corporate accounts). QF dumped capacity on them while matching VA on enough product and service metrics to keep and win back accounts.

If VA tried to go back to a LCC, it'd still have to figure out how to beat JQ while leaving all of the corporate accounts to QF.

[Climb150]

Just interesting there remain "true believers" who think there'll be a VA mk2.

Geez I hope there're right and I'm proven hopelessly wrong.
You will notice I said "if" they relaunch. If they do Qantas will crush them if they try to compete for premium pax.
Jetstar might let them survive by not competing too much on lower yield routes.

[Lookleft]

Virgin made money early on, but then Qantas expanded JQ and started squeezing Virgin hard from below, while dominating the corporate market from above. JB moved upmarket to get out of that pincer (because it would have been harder to cut costs enough to compete head on with JQ, while QF free to keep reaping in corporate accounts). QF dumped capacity on them while matching VA on enough product and service metrics to keep and win back accounts.

Nothing new about this scenario. Braniff airlines based in Dallas had the same thing happen to them with american Airlines squeezing them from the top and an upstart airline called Southwest squeezing them from the bottom. In the end they couldn't compete against both. If you can ever get hold of a book "splash of Color" it is well worth the read. What is truly amazing about the whole Virgin debacle is that they didn't learn from this as they were the upstart airline undermining Ansett who at the same time were trying to compete with Qantas. What did the VA management do? They put themselves into the middle ground! They then proceeded to take another page out of the failed airlines playbook and operate with too many different types of aircraft Now they are just going to be another case study for future Aviation Management graduates.

[Grivation]

Let's not forget skippers were on 120K and FOs on 80K in the first few years of VB. You couldn't help making money with that cost base.

[Brakerider]

Let's not forget skippers were on 120K and FOs on 80K in the first few years of VB. You couldn't help making money with that cost base.

80k is probably close to 115-120k in todays dollars. Not far off the current EBA.

[Icarus2001]

You couldn't help making money with that cost base. Just a myth. If TOTAL CREW costs are around 12-15% of operating costs then the pilots could fly for free and you could still lose money, if the other costs are too high.

[Logan31]

80k is probably close to 115-120k in todays dollars. Not far off the current EBA.
Sounds like the good old Pacific Blue days😎💪

[Slezy9]

80k is probably close to 115-120k in todays dollars. Not far off the current EBA.


Inflation 2000 >>> 2020 (https://www.in2013dollars.com/australia/inflation/2000?amount=80000)

$80K is just over $130K in today's dollars.

[Ragnor]

I'm sure the new VA 2 would be happy to earn $119k now.

[Turnleft080]

Every time I read an article on Bain I also think of Brown. It goes back a while or was that Brain from memory.

[Ragnor]

Wouldn't Bain Capital be the worse thing to happen to Virgin since JB? private equity firms just prop a company up then gut it out. anyone remember Dick smith electronic?! Anchorage Capital does they made millions 510 of them.

[wheels_down]

The only one who would be there forever and ever would be Indigo.

Not overly convinced the others are there for the airline’s prospering future interests.

It remains to be seen how Virgin would fit into Bill’s lineup of Spirit, Frontier, Wizz. Would be the first full service venture.

I think Indigo would be the best option for Virgin when taking into account long term survival. I guess we will find out in the next few days.

Bill was after a local partner also. I wonder if Local means Singapore.

[DanV2]

The only one who would be there forever and ever would be Indigo.

Not overly convinced the others are there for the airline’s prospering future interests.

It remains to be seen how Virgin would fit into Bill’s lineup of Spirit, Frontier, Wizz. Would be the first full service venture.

I think Indigo would be the best option for Virgin when taking into account long term survival. I guess we will find out in the next few days.

Bill was after a local partner also. I wonder if Local means Singapore.

Indigo will eventually convert/revert VA (back) into another LCC. Indigo are not in the business of operating FSCs and will want to allocate those 500+ A320Neos across their group, including VA if they are successful.

The J seats might be used similarly to Spirit's "Big Front Seat" style service in the interim, where they'll basically are just paying for the seat.

Indigo may operate the 737s in the short term, but eventually those neos will be replacing VA's 737s.

[VH DSJ]

Indigo will eventually convert/revert VA (back) into another LCC. Indigo are not in the business of operating FSCs and will want to allocate those 500+ A320Neos across their group, including VA if they are successful.

The J seats might be used similarly to Spirit's "Big Front Seat" style service in the interim, where they'll basically are just paying for the seat.

Indigo may operate the 737s in the short term, but eventually those neos will be replacing VA's 737s.

If that's what they wish to do, then why not start a new LCC airline from scratch? It would be a lot easier than go through the whole administration process as well as inheriting the associated debt that comes with it.

[galdian]

Indigo will eventually convert/revert VA (back) into another LCC. Indigo are not in the business of operating FSCs and will want to allocate those 500+ A320Neos across their group, including VA if they are successful.

The J seats might be used similarly to Spirit's "Big Front Seat" style service in the interim, where they'll basically are just paying for the seat.

Indigo may operate the 737s in the short term, but eventually those neos will be replacing VA's 737s.

And if you have the same "management" in VA2 as in VA1 sure the rollover will be just as sensationally successful as the Tiger rollover!

What's that definition of INSANITY again?? "Doing the same thing and expecting a different outcome......." :hmm:

[Section28- BE]

Link here: https://www.smh.com.au/business/companies/union-kingmakers-fear-bain-capital-s-bid-for-virgin-australia-20200531-p54y24.html

Extract here:

Union kingmakers fear Bain Capital's bid for Virgin Australia
By Sarah Danckert (https://www.smh.com.au/by/sarah-danckert-ghhbnm) and Patrick Hatch (https://www.smh.com.au/by/patrick-hatch-hvf90)

May 31, 2020 — 11.45pm

Unions controlling key votes in the Virgin Australia administration process have expressed serious concerns about Bain Capital's tilt at the airline due to the buyout firm's history of slashing jobs and imposing harsh conditions on workers offshore.

Virgin's 9000 employees are owed a combined $450 million from the collapsed airline and will be a vital voting block to get any rescue bid approved. As a result, the unions representing the carrier's workers have emerged as kingmakers in the bidding process which will this week hit a pivotal juncture.

Bain part-owned Toys R Us has a patchy industrial relations record in the US, particularly when dealing with workers made redundant during insolvency. Credit:Jane Dyson

Bain, which in Australia is led by former Olympic diver Michael Murphy, is among the contenders for the airline alongside local private equity outfit BGH Capital, Richard Branson linked Cyrus Capital, US airline investor Indigo Partners and Canadian funds management giant Brookfield.

Virgin's administrators Deloitte spent the weekend working through second round bids and could announce a shortlist of two final bidders as soon as Monday.

Ahead of the decision, unions have aired concerns with Deloitte about Bain Capital's track record in the US where it has cut jobs and slashed worker entitlements. Transport Workers Union national secretary Michael Kaine said that while Bain had launched a public relations blitz last week to put forward its plans "this isn’t about the number of column inches you get".

"It’s about how you can demonstrate that you can get Virgin back in the air in a way that serves workers and the travelling public,” Mr Kaine said.

Four bidders for Virgin Australia have been shortlisted and will be revealed to the public.

Mr Kain noted that Bain had a patchy record on respecting workers’ rights.

"Our message to Bain and any other bidders is that Virgin’s workers are a unique workforce, they’re highly skilled, they’re highly dedicated, they’re fiercely concerned about the future of the airline and they are a force to be reckoned with for any bidders which doesn’t have Virgin’s long-term future as a priority, and which believes they can ram through plans which might ultimately hurt Australia’s chances of having a strong second airline."

Union sources said they are also troubled by Bain’s track record on industrial relations, and after meeting with the group last week believed that the private equity firm would play hard-ball with Virgin's highly unionised workforce.

Related Article

Aviation (https://www.smh.com.au/topic/aviation-5ut)

Deloitte's call for Virgin emergency cash rejected as liquidity fears rise (https://www.smh.com.au/business/companies/deloitte-s-call-for-virgin-emergency-cash-rejected-as-liquidity-fears-rise-20200529-p54xns.html)

In 2017, around 30,000 US workers at Bain part-owned group Toys R US were left without severance pay when the retail chain collapsed. The workers launched a months-long campaign against Bain and former co-owners KKR and the Vornado Realty Trust, enlisting high-profile supporters including former Democratic Presidential candidates Elizabeth Warren and Bernie Sanders.

Bain and KKR created a $US20 million hardship fund for workers in late 2018. This amount was on top of an earlier settlement which was short of the $US75 million workers said they were owed.

There has also been criticism of the treatment of workers at music retailer Guitar Center when it was under Bain majority control. In 2017, the US National Labor Relations Board found the then Guitar Centre engaged in illegal union-busting activities in 2014 when Ares Management and Bain owned the group including "threatening employees with reduced benefits because of their union membership or affiliation", "interrogating workers about their support for their union" and "creating the impression that employee support for the Union was under surveillance".

Worker representatives also fear that American ultra-low cost airline investors Indigo Partners and its partner Oaktree Capital would turn Virgin into a scaled-back budget airline which would employ far fewer people.

Australian private equity firm BGH Capital, which is working on a bid with AustralianSuper, has proposed restarting Virgin with as few as 15 planes in the sky, which was also poorly received by union representatives, sources said.

“There are concerns about many of the private equity bidders,” one union figure said.

Brookfield - which dropped out of the formal sale process two weeks ago but made another bid on Friday hoping to remain a contender - remains the unions’ preferred bidder. They also view the Richard Branson-linked Cyrus Capital favourably after it outlined a plan to maintain Virgin as a full-service international airline (https://www.smh.com.au/business/companies/virgin-bidder-cyrus-plans-to-keep-airline-as-full-service-qantas-competitor-20200526-p54wnl.html).

Rgds
S28- BE

[Section28- BE]

Link here: https://www.afr.com/rear-window/steve-ciobo-advising-bain-s-virgin-bid-20200531-p54y1h

Extract here:


" -Rear Window

Steve Ciobo advising Bain's Virgin bid
Joe Aston (https://www.afr.com/by/joe-aston-hveym) Columnist

May 31, 2020 – 11.58pm

Whoever emerges as Virgin Australia's new owner, and in whatever form the airline takes, the voluntary administration process will have been a consultants' picnic. Oodles of professional services mercenaries attached to the various bids – Bain, for instance, has 22 external advisers engaged "around the clock" (https://www.afr.com/work-and-careers/leaders/inside-bain-s-plans-for-virgin-australia-20200526-p54wj5) on theirs – will no doubt be extra grateful for the fee bonanza at such a dismal point in the economic cycle.

One former Somebody lending his expertise and entrée to Bain's bid is former federal minister Steven Ciobo, no doubt offering unparalleled insight into the direction of the wind, at any given moment, in Scott Morrison's Canberra.

A curious choice. Does the Prime Minister's door even remain ajar to his former defence industry minister?

You'll recall defence minister Christopher Pyne was allowed to serve out his final days in Parliament on the frontbench after announcing he would not contest the 2019 election. So, too, was human services minister Michael Keenan, despite his character assessment (https://www.smh.com.au/politics/federal/former-government-minister-offers-explosive-character-assessment-of-scott-morrison-in-new-book-20190630-p522sy.html) of his new leader as an "absolute arsehole". Very pointedly, however, Ciobo was not extended the same courtesy, sent to the backbench just 2½ months from the May poll.

Having backed Peter Dutton in the Liberal leadership spill (and even run as deputy, garnering more votes, at least, than poor, deluded Greg Hunt), Ciobo had already been demoted from the trade and tourism portfolio when Morrison appointed his first cabinet in August 2018, a portfolio he'd really come to know and love. Ciobo spent almost as many nights in the key Virgin Australia destination of Los Angeles than George Christensen did in Angeles City – and Ciobo was even ordered by the (previous) Prime Minister's Office to cut it out. Who knew West Hollywood was such a nerve centre for bilateral trade negotiations with Indonesia or Peru?

Hey, at least Ciobo hasn't been reduced to lobbying for L'Oréal (https://www.afr.com/rear-window/julie-bishop-lobbying-for-l-or-al-20200427-p54nkx).

Over at rival Virgin bidder Brookfield, Canberra's vagaries are being interpreted for the Canadians by GRA Cosway. No government relations advice is required at BGH Capital, where principal Ben Gray considers himself an ex-officio member of federal cabinet. Why pay for a pale imitation when you've got the real thing engraved on the door?

Joe Aston (https://www.afr.com/by/joe-aston-hveym) has helmed The Australian Financial Review's Rear Window column since 2012. He is based in Los Angeles. Connect with Joe on Facebook (https://www.facebook.com/mrjoeaston) and Twitter (https://twitter.com/mrjoeaston?lang=en). Email Joe at [email protected] "

Rgds
S28- BE

[Pundit]

Is Ben Gray related to the former Tasmanian Premier?

[ScepticalOptomist]

Link here: https://www.afr.com/rear-window/steve-ciobo-advising-bain-s-virgin-bid-20200531-p54y1h

Extract here:




Rgds
S28- BE

Thats the first post you’ve made that I understood - normally your cryptic crossword / off your meds prose is atrocious! :-)

[Fliegenmong]

"Ciobo spent almost as many nights in the key Virgin Australia destination of Los Angeles than George Christensen did in Angeles City"

Ha ha that's very funny...I live in Ciobos electorate and certainly he was not ever seen around except for junk mail sprouting falsehoods leading up to election time...predictably his replacement is the same...shame

[Section28- BE]

Yup Gotya, 'Level' there- ScepticalOptomist.......!!!:ok:

And, DO 'truly' Trust, that you (and perchance, your Colleagues- being, 'those' IN 'It') get 'some' go-forward out of 'this' Gig . Should, 'you' be in 'IT'.........????

Shall- get, the 'YBBN' ATIS- should YOU require, but apart from 'that' GO Well !!!!

Best regards to 'All' in this...
Let, us see how 'it' rolls-out.
S28- BE

[LostWanderer]

Yup Gotya, 'Level' there- .......!!!:ok:

And, DO 'truly' Trust, that you (and perchance, your Colleagues- being, 'those' IN 'It') get 'some' go-forward out of 'this' Gig . Should, 'you' be in 'IT'.........????

Shall- get, the 'YBBN' ATIS- should YOU require, but apart from 'that' GO Well !!!!

Best regards to 'All' in this...
Let, us see how 'it' rolls-out.
S28- BE

Whatever this actually is causes me anxiety, stress and confusion all at the same time while attempting to read it.

[hoss]

Maaaate, get onto Apple Music and download some Peter Gabriel, it will help to make sense of it all...😉

[Sunfish]

Bain is the worst thing that could happen to Virgin and Australia and the staff. The Bain model is simple; suck the life out of what’s left of the business, suck out all the cash as well. Load the business with service and financial contracts that keep Bain sucking cash out for years. Roll the resulting financial turd in glitter and sell it to investors. Profit.


The value of Virgin to Bain is the huge cash flow airlines generate, not the potential for profit. What I think Bain would do is to get their hands on that cash flow for as long as possible. They would do that by making Virgin enter some very one sided contracts with Bain controlled entities. You would start with a leasing entity, a facilities entity, perhaps a fuel hedge/broker entity, a finance factoring entity and maybe others. The ‘’independent’’;Hoho!Haha! Board led by chairman Carla will rush to sign such deals.

‘’You then have a zombie company. The new Virgin looks like an airline, but it’s paying Bain a premium through a range of expensive one sided leasing and service contracts. You then dress up Virgin as a new bride and flog her to the stock market. Mums and dads will buy. Bain is still raking in the cash through its service provision entities. Then it parcels them up and sells them to the stock market before the contracts run out....making more money from gullible investors. Virgin is left with a huge cost base, ageing aircraft and no profits. Bain sucked the life out of it.

Of course in the old days they could just rip up the company and sell it to competitors. Not possible today.

[Climb150]

Sunfish,

Evething you say is true but Virgin employees and suppliers couldn't give two hoots who takes over the company. As long as they are taking home a paycheck every week because that is their primary concern.

Contracts, ownership structures etc are about 187th on the list of worries for Virgin employees right now.

What happens in 2 years time isn't a priority when you don't have a paycheck.

[VH-ABC]

I am a Virgin employee, and I do give two, if not three hoots who buys into our company. I would rather not go through this again, if possible. Not that I have any control over it though!

[Colonel_Klink]

Sunfish,

Evething you say is true but Virgin employees and suppliers couldn't give two hoots who takes over the company. As long as they are taking home a paycheck every week because that is their primary concern.

Contracts, ownership structures etc are about 187th on the list of worries for Virgin employees right now.

Nobody cares what will happen in 2 years.

I too am someone who cares what happens in 2 years time. As a pilot - I want an entire career with Virgin, so it’s vitally important to me that this place is around in 2/5/20 years time.

What’s going to be important about who takes over is what the plan for staff numbers as well as terms and conditions are. I am concerned about what I read about Bain - and I feel Sunfish is spot on about what he wrote above.

There is a good article in the AFR today also saying that there is the real possibility of 1000s of jobs that could be lost. The CEO is starting to change his tune on this front, recently saying that not everyone will be here at the end of this process. The issue is that there is a lot of ‘head in the sand’ by employees at the moment - no one is really too concerned about their jobs, when they absolutely should be.

There is a lot of posturing going on by the ACTU and TWU. It’s all good and well to want as many full time jobs as possible on current Ts and Cs - but at what cost? It’s disingenuous for these unions to not be addressing the elephant in the room. There will be job losses - so what are these unions going to do about it? From a pilots perspective, I hope my unions goal is to keep as many pilots as possible - giving people the option of Part Time, and perhaps even the unpopular idea of a reduction in pay to keep everyone employed.

If an airline pilot is made redundant at the moment, the likelihood of them continuing in a career in aviation is significantly reduced. Many of my colleagues have young families, new homes, etc etc, so if I have to take a bit of a hit to ensure these people aren’t out on the street, then so be it.

[Climb150]

I will rephrase. Few people will care who buys Virgin as long as they keep their job and the new owners don't go bust in the first 2 years. At least that way the aviation sector may have recovered enough for people who aren't happy with the new owners to move on.

[bangbounceboeing]

Agree with ya C Klink

its nice to be able to discuss these issues without that **** Paragraph377 hijacking every thread related to Virgin.
I think the big areas of concerns for the pilot group with regards to whom takes over will be what parts of the airline are to be saved and what’s going to get the chop.
The majority of my mates on the 737 seem reasonably confident of keeping their jobs in some form or another but those on the 330,777,ATR and Fokker are all understandable concerned as to the future make up of the airline. At this stage both BGH and Bain seem to more focused on a reduced single fleet operation at least to begin with at least. Where that leaves VARA, Widebody and ATR pilots is the 6 million dollar question.

Something like 450 pilots have already been made redundant with the closing down of VANZ and Tigerair pilot group. The thought of another 300-400 pilots joining them is truely terrifying and hopefully will be the AFAP and VIPA’s major focus in protecting jobs.

[Arctaurus]

The AFR is now reporting that Bain is the hot contender with Carla set to replace Scurrah. Bid results later today.

I would be waiting to see the creditor's reaction to the successful bidder's offer before getting too excited.

And that's if there is a successful bid.

[The Bullwinkle]

The AFR is now reporting that Bain is the hot contender with Carla set to replace Scurrah. Bid results later today.

I would be waiting to see the creditor's reaction to the successful bidder's offer before getting too excited.

And that's if there is a successful bid.
I just don’t understand how Hardlicker keeps turning up in these top jobs.

[Section28- BE]

Link here: https://www.afr.com/street-talk/bain-hot-favourite-for-virgin-final-round-20200602-p54yl7

Extract here: -Street TalkBain hot favourite for Virgin final roundSarah Thompson (https://www.afr.com/by/sarah-thompson-j7ger), Anthony Macdonald (https://www.afr.com/by/anthony-macdonald-j7gcx) and Tim Boyd (https://www.afr.com/by/tim-boyd-h18i2k)

Jun 2, 2020 – 9.42am

It's all quiet on the Virgin Australia front; there's still no shortlist to be seen.

Bidders are restless, Deloitte and its camp have gone to ground, the clock's ticking and there's plenty at stake.

However, one hot favourite has emerged for the auction's final round.

Bain Capital's Mike Murphy: "We are formulating our strategy on exactly where Virgin should be positioned."

Sources said Bain Capital came out of Monday's clarification process as the bidder most likely to be shortlisted.

Should Deloitte and Co (Morgan Stanley, Houlihan Lokey and Clayton Utz) stick to two bidders in the final round theory, that would leave only one spot for the other four contenders BGH Capital, Indigo Partners, Cyrus Capital and Canada's Brookfield (which re-emerged despite walking from the process more than a fortnight ago).

Bain's early favouritism spells bad news for Virgin boss Paul Scurrah, who laid out what other bidders think is a credible vision for Virgin and made no secret of his ambitions to lead the company under new owners (https://www.afr.com/companies/tourism/paul-scurrah-confident-a-fitter-leaner-virgin-mark-ii-will-fly-20200514-p54svq). Bain has ex-a2 Milk Company and Jetstar boss Jayne Hrdlicka on board and she's expected to take Scurrah's job should Bain end up buying the airline.

Bidders expect to find out their fates later on Tuesday.

more to come

Rgds all
S28- BE

[Led Zeppelin]

I just don’t understand how Hardlicker keeps turning up in these top jobs

Carla has a long relationship going back years with Bain

[didrechambers77]

Paul's prezzo indicated 1300 cabin crew jobs gone by end of year, do the maths boys.

[Pundit]

Carla was one of the Bain lead consultants at Ansett. Her MO hasn't changed. But she will prevail, she always does

[Led Zeppelin]

But she will prevail, she always does.....

Until she's fired - The problem is it takes years to rebuild something that has been destroyed, just look at the Jetstar experience with the deadly duo and the effect it had on that organisation.

[Servo]

Until she's fired - The problem is it takes years to rebuild something that has been destroyed, just look at the Jetstar experience with the deadly duo and the effect it had on that organisation.

For those that are not at Jetstar or have friends there, what was the effect? I assume it wasnt pretty, hence the comment.

As an employee of Virgin, with a minority vote in the Administration, would be good to know what to avoid, if possible!

Cheers

[wheels_down]

How soon will Indigo apply for its own AOC?

[B772]

Readers may be interested to know Blackstone purchased 2 seaplane operators in 2013 for a total of USD98M. The 2 operators were combined into the one operator and tarted up by spending a further USD6M. Four years later Blackstone sold the operation to another private equity firm xxxx xxxxxxx for around USD500M, a 4.8 times return multiple on their investment. Who said there is no money in aviation. Welcome to the world of private equity, venture capital and Bob's Discount Furniture a major asset of Bain Capital.

[Icarus2001]

And the Sh$t just hit the fan: That is a strange comment to make about the process progressing.

[wishiwasupthere]

How soon will Indigo apply for its own AOC?

Could they tie up with Rex?

[Turnleft080]

So why not all the losers apply for their own AOC that would make 7 or 8 airlines. Unsustainable but wow, jobs
for everyone. One year later their will be mergers galore back to 3 airlines.

[Ragnor]

Anyway its been culled down to two, which one is best, Bain or Cyrus?! both have different ideas. Cyrus have an interesting plan and how much more than 3.5 billion is being offered.

[Servo]

https://www.abc.net.au/news/2019-12-16/a2-milk-jayne-hrdlicka-steps-down/11801672

I can see why Bain has kept her on and will keep her on in Virgin. She gave Bain and Co. $19 million in consultancy fees whilst at A2 milk.............

Maybe Cyrus might be the better of the two given their idea's.

Interesting that Brookfield was not a finalist................ If what you mentioned Blackout is on the money.

[Section28- BE]

Indeed-

Ex: the 'said' article posted:

"Among other things, they were displeased with the $19 million in consultancy fees she forked out to her former employer, Bain and Co."

'Big Hit' for Less Than a 24 month term (am, given to understand) of engagement/employment ......?????, 'one' may- 'form' a similar/that same view!!!!

Nearly, Up there- with 'the Sharpie' level/altitude of Shake, Rattle and Roll.....

Rgds all
S28- BE

[normanton]

I'm not sure if Joyce would laugh or be concerned about her being involved, considering how well she knows Jetstar.

[Sunfish]

I may be wrong about Bain. I'm too pessimistic. They may do a decent job. They do have some aviation expertise. One possibility is that they already have a cashed up partner wanting to invest.

What is the story with JH? What was she like to work for? Arrogant? Only talked to "special" people? Did she push good people out? Other stuff? ...Or was she just driven to succeed? She is a card carrying member of the old girls network and that carries some weight these days. You virgins may yet get a happy ending to this mess.

[Lookleft]

That’s the funniest thing I have read in a long time. She knew nothing about Jetstar. She didn’t understand why the staff weren’t engaged, she didn’t understand the HK regulatory system and while the staff did more for less she was working 9-5. The proof of her lack of knowledge was inserting a CP who had been excluded from the shortlist by the recruiting company hired to find a suitable candidate ( how much did that cost). Jetstar is fortunate that the current CP is dealing with the current crisis. No Jetstar will have nothing to worry about if Madam Chang takes the reigns of whatever and if ever a viable airline emerges out of the current mess.

[Des Dimona]

LOOKLEFT - Spot on.

All I can say to the guys and gals at Virgin is good luck if Carla gets her hands on the wheel. Most importantly, you'll have a job, but you'll also be in for quite a ride. Just watch the "consultancy" fees being extracted by Bain from Virgin. As opposed to A2 Milk, which questioned these fees, Bain itself will own the company, so wholesale transfer of funds will proceed without a problem. They'll bleed the company dry yet again and as is stated elsewhere, flog the carcass by way of a carefully orchestrated public float to recapitalise it, and then move on to the next victim.

[galdian]

That’s the funniest thing I have read in a long time. She knew nothing about Jetstar. She didn’t understand why the staff weren’t engaged, she didn’t understand the HK regulatory system and while the staff did more for less she was working 9-5. The proof of her lack of knowledge was inserting a CP who had been excluded from the shortlist by the recruiting company hired to find a suitable candidate ( how much did that cost). Jetstar is fortunate that the current CP is dealing with the current crisis. No Jetstar will have nothing to worry about if Madam Chang takes the reigns of whatever and if ever a viable airline emerges out of the current mess.

Maybe splitting hairs, did she "not understand why the staff weren't engaged" or simply didn't care or even a problem too big to tackle - certainly during her limited working hours!
She may be inserted as a manager, is there anyone out there who would be seen as a manager AND a leader??

Would seem perfect opportunity IF there's a VA2 to find better leaders rather than just re-use rusted on managers - if any leaders can be found, now THAT may be the question.

[Lookleft]

did she "not understand why the staff weren't engaged" or simply didn't care or even a problem too big to tackle

Good point galdian. The second part of your statement follows on from the first. She couldn't understand why the staff of a relatively new company were not more excited and enthusiastic but her solution was to not care about it and just go about her self-promotion agenda. what she didn't understand was that a lot of the staff had worked for other airlines and were not buying into the corporate hoopla (even the ex-Impulse staff were not enthusiastic, as they preferred being branded QantasLink) and the young marketing and aviation graduates were just using Jetstar as a foot in the door to go to a better paying job, usually at Qantas.

[wheels_down]

Sounds like she is the perfect fit for The Village.

[Section28- BE]

May/May-NOT be of Interest, to you All at this time....

'Dr Google's' research Department, would 'offer' the following:

'Linkedin' link here: https://au.linkedin.com/in/jaynedrdlicka

'Wikipedia' link here: https://en.wikipedia.org/wiki/Jayne_Hrdlicka

More, 'Marketing' than Input/Operational Cost understanding- or Not...............?????, Anyhoo.....!!!!

Rgds
S28- BE

[Denied Justice]

Sounds like she is the perfect fit for The Village.

Problem is that she only works 9 til 3 (but I guess that would fit in OK in The Village), plus does she live in Brisbane? If not she'll have to work from home.

[wheels_down]

The HQ will be wherever she lives. I don’t believe that is Brisbane. Sounds like she will have control over the airline group from a Chair position so what Carla wants Carla gets.

She he will have nobody above her to challenge her for once.

[Lord_Lucan]

As Chairperson of Tennis Australia, she has to be in Melbourne for at least a few weeks of January of each year. What are the odds of taking up any Vic Govt incentives to move the whole box and dice south?

[Icarus2001]

She he will have nobody above her to challenge her for once.
You mean other than a board, oh and shareholders, oh and the passengers who vote with their feet.

[wheels_down]

Boards don’t do jack these days. They give full reign to most executives running the joint.

Especially those who held prominent roles in the industry.

[Sunfish]

The Boards job is to hire and fire the CEO and protect the assets. It is not easy to do it properly, no matter what you may think.

[Dale Hardale]

Carla won't be drawn like Borghetti into a fight to the death with the Qantas group. He had a very personal agenda stemming from the appointment of Alan Joyce.

No, Carla will be 150% focused on stripping Virgin of cash and getting these funds back to Bain. As said elsewhere, when the time is right, the company will be re-floated to get funds back into it and Bain will exit.

[didrechambers77]

The HQ will be wherever she lives. I don’t believe that is Brisbane. Sounds like she will have control over the airline group from a Chair position so what Carla wants Carla gets.

She he will have nobody above her to challenge her for once.

Spot on! The Bain Capital bid included an immediate $500m injection to cover short term redundancies and opex until Dec/Jan. Included further, was $500m contributed from Mel Apt and Vic govt which would include moving the HQ to MEL and leased land with purpose built facility in the short term (sponsored by Vic Govt + Aus Govt).

The forensics at KPMG have described the state of the VA books as something not even Bondy could compile.This is aligned with the affidavit Strawberry and Deloitte indicated that "they couldn't understand it". Which means, no accountability, no accounting standards or practices AND the icing in the cake, the claim of $1b in the bank from Scuz meant nothing... when time came it wasn't there. Thanks for the great advice Keith, I guess your screaming match was correct.

As for next steps, darling Carla will be Chairwoman, with the current C-suite wiped. Group Executive will be old Strambi (already had a few dins over the topic)...

For your anti-Carla remarks, I suspect you're more worried out of a personal gain if anything. The Business hasn't operated like as such since 2006, with limited foresight and no ROI in projects/routes/staff while the L3 managers and below continued to add complexity to processes and procedures. You should consider her resume and experience to the saviour of the Business, a Business that will make money. No one liked the tough decisions, but they need to be made. Those that remain will stay in and look back (among trusted company) and think, yeah she's alright. (Besides, Scuz was about to do the same, he just didn't pull back the curtains on his man cave in Alpha Ground... instead it was decorated with his little handbag Mehaff's with buzz words from TedTalks.... right-o).

[Sunfish]

Dale, there is also a suggestion coming out of the union movement and also from Barnaby Joyce, that the bidders might already have a buyer lined up and may just “flip” the company to a third party of perhaps dubious provenance. For this reason Barnaby is suggesting the Sydney gate slots and possibly terminal space need to be ring fenced to avoid crowding out of other potential airline users.

This situation at least in Barnabys mind, is potentially akin to the Murray Darling disaster where Chinese and other purely financial speculators with no interest in agriculture have purchased and control large quantities of water rights, to the detriment of genuine irrigators.

[MickG0105]

​​​​​​... Group Executive will be old Strambi (already had a few dins over the topic)...

They could do a lot worse than having Lyell Strambi run the show. Of course the Lyell - Carla - Bain connection goes all the way back to Ansett when he was running the Business Recovery Program under Rod Eddington.

[Lookleft]

Yeah thats all the new airline needs is another CEO who was looked over for the top job at QF. You don't think he will try and take on QF in the premium market as he will learn from JB's mistakes? He has been running Melbourne Airport and we all know how well that operates with the constant delays, endless laxiway closures and indecision on a new runway. It does make sense though his comment on Melbourne radio that Melbourne hasn't had a domestic airline with its HQ in Melbourne since Ansett collapsed. Obviously he doesn't consider Jetstar to be a domestic airline and thinks if you don't talk about it then it will go away. Sorry Lyell but Jetstar will be your competition if the cluster that is the VA administration gets real.

[MickG0105]

Yeah thats all the new airline needs is another CEO who was looked over for the top job at QF.
Sorry but how was Lyell Strambi looked over for the top job at Qantas? One of Alan Joyce's first moves as CEO was to bring Lyell back to Australia from his stint as COO at Virgin Atlantic.

[didrechambers77]

Sorry but how was Lyell Strambi looked over for the top job at Qantas? One of Alan Joyce's first moves as CEO was to bring Lyell back to Australia from his stint as COO at Virgin Atlantic.
Stramb's chose not to continue w/Q due lifestyle reasons. Nothing more, nothing less. It was an enormous portfolio and he successfully transformed Qantas domestic services. The legacy continues today. He broke down the barriers realigned it.

[Lookleft]

My misreading of his timeline but he was only CEO of Domestic for two years before he left in March 2015. He then got the Melbourne Airports job in September 2015 so you don't think he has some sort of axe to grind?

[rmm]

Stramb's chose not to continue w/Q due lifestyle reasons. Nothing more, nothing less.

I'm probably wrong by I'd always heard there was fall out due to 787 going to Jetstar first?

[Lookleft]

Stramb's chose not to continue w/Q due lifestyle reasons.

Thats what they all say from politicians to CEO's. Wasn't he CEO Domestic when Gareth Evans was CEO International and GE got the Group CEO position at Jetstar? If Domestic was successful and International was a basket case then why wasn't he offered the Group position? Where do you think the next step is for GE? Don't tell me that any CEO with a healthy ego is not looking at the very top of the corporate pyramid.

[Chad Gates]

He was part of the most bizarre reshuffles in QF history. Both he and the international guy (Hickey? I can’t remember) resigned on the same day with no explanation. Very sus.

[wheels_down]

The issue with Bain is they said they want to change the model. While all bidders would have made tweaks these guys have started talking about Virgin Blue and low cost carriers in the dialogue. Murphy said it’s not going to be business as normal ‘that’s the reality’. What that actually means is the big question. That’s is nothing but Bain’s reality.

Cyrus said they will keep the model as it is but reduce the fleet complexity which is where they claim is the largest upside of any potential successful transformation.

[MickG0105]

My misreading of his timeline but he was only CEO of Domestic for two years before he left in March 2015. He then got the Melbourne Airports job in September 2015 so you don't think he has some sort of axe to grind?
Axe to grind? No, I don't think that's the case at all. Not every senior exec acts as though they're in a TV show.

AJ thought very highly of Lyell from their Ansett days and was very keen to get him on board at Qantas. In terms of leaving Qantas, my understanding, all third and fourth hand mind you, is that Lyell was keen to get back to Melbourne. Apparently the helm of Jetstar was in the offing but not for a few years. I don't think that there's ever been any animosity between Lyell and AJ or towards Qantas in general.

... Wasn't he CEO Domestic when Gareth Evans was CEO International and GE got the Group CEO position at Jetstar? ...
No, Gareth moved from CFO to International at the same time that Lyell left. Gareth got the Jetstar gig a couple of years later in November 2017 when Carla left.

[Arthur D]

Somebody had to take the fall for the Capacity war with VA and massive losses in 2013.

LS was one of the sacrificial lambs

[non_state_actor]

The issue with Bain is they said they want to change the model. While all bidders would have made tweaks these guys have started talking about Virgin Blue and low cost carriers in the dialogue. Murphy said it’s not going to be business as normal ‘that’s the reality’. What that actually means is the big question. That’s is nothing but Bain’s reality.

Given that every business transformation has failed over the last 20 years why is going back to the beginning going to work? Might sound good from a PR perspective but I can't see a LCC working long term.

[didrechambers77]

Given that every business transformation has failed over the last 20 years why is going back to the beginning going to work? Might sound good from a PR perspective but I can't see a LCC working long term.
The VA issue was infact the end goal (how was it clearly defined... they've bandied around full service for so long but still full of ancillary charges?), and didn't have an exact, clear documented guide how they were getting there. This could solely be put down to middle managers not being held accountable, and lack of transparency with strategy planning. Very B.Bus stuff, though the systemic issue is head office is packed with people without proper corporate experience and tertiary education. Instead, its middle aged women bouncing from Jocelyn's cakes to merlo coffee's holding onto their vowels like its the end of their marriage.

Hiiiiii, how are youuuuuu, Goooooooodddd, squeal squeal squeal,

Don't forget the singing and dance parties that were held twice daily.... you can't write this its that unbelievable but it happened (alot). The business hasn't had a customer value proposition (CVP) of which aligns with commercial strategy and goals. CVP is are basics, like project management it defines the end goal and minimum viable product. The fact they couldn't get the basics right speaks volumes of the position of the Business.

And lets not forget, its the only airline that calls CRM, NTS and creates its own bespoke department of 9 people to deliver death by power point.

[ozbiggles]

D isn’t a vowel, which sums up the accuracy of your post (mostly). But I have a feeling this is a well known ppruner using a different callsign....the 7s give it away

[VH-ABC]

Something to do with Paragraph-something? Yep... must be one very opinionated individual needing to give opinions.

[C441]

I was at a pre-transformation 'briefing' where Lyell expressed his desire to follow Alan into the CEO's position.
6 months later he was unemployed.