Virgin Australia to be privatised ?
Word has it that the ATR will be gone, they are already making plans on pulling the operation out of QLD apparently starting with EML and GLT to wet lease to Alliance, there was a top secret Union meeting last week where this was discussed along with that a reduction of crew. Some turbulent times ahead for VA.
Qantas was NOT privatised, although it was referred to as that, it was publicly floated - e.g. it went from being (legally) a company owned by the government, although structured and operated like a private company (i.e. it was not a division of the Australian National Airlines Commission like TN) to being a public company.
Air NZ originally could be more correctly referred to as being 'privatised' as it was sold in blocks to a consortium consisting of Brierly Investments Limited, Qantas Airways Limited, Japan Air Lines Ltd and American Airlines LLC with some shares publicly floated.
My guess is VARA WA to be replaced with Alliance as part of the recently inked 'Alliance'.
A320's to go.
The company that owns the A320's and ATR's currently has 1 A320 for sale and a heap of 2011/12-built ATR's for sale.
https://www.planespotters.net/airlin...ralia-Regional
avation PLC - Available Aircraft
A320's to go.
The company that owns the A320's and ATR's currently has 1 A320 for sale and a heap of 2011/12-built ATR's for sale.
https://www.planespotters.net/airlin...ralia-Regional
avation PLC - Available Aircraft
Going Nowhere - please explain just why you think that VA would gift a fair amount of revenue (VARA WA) to another company (Alliance) who they have no equity stake in or ability to gain from that gifting. If you actually think about it for more than 5 seconds before posting you'll realise that doesnt make sense.
The tripe you read on here is amazing sometimes.
The tripe you read on here is amazing sometimes.
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Anything is possible at the moment with Virgin Australia, but I can't see them disposing of the ATRs yet, given they have just been transferred from VARA to VA.
Perhaps they may relocate the Brisbane based ATR's to Sydney so they can finally expand the NSW regional market. If this occurred then I can see Alliance operating (under wet lease) the former QLD ATR routes using their F50s and F70s.
Perhaps they may relocate the Brisbane based ATR's to Sydney so they can finally expand the NSW regional market. If this occurred then I can see Alliance operating (under wet lease) the former QLD ATR routes using their F50s and F70s.
http://http://australianaviation.com...-fifo-charter/
Chadzat anyone's guess really. I'd be very surprised if the atr (apart from the old ones) were to be scrapped. Pretty expensive putting them on the VAA aoc to then scrap the whole fleet. There is certainly a market for turbo props. I think the 146 operation being suddenly outsourced completely stands out a bit.
Alliance F100 crews are much cheaper and the mining boom is over.
Chadzat anyone's guess really. I'd be very surprised if the atr (apart from the old ones) were to be scrapped. Pretty expensive putting them on the VAA aoc to then scrap the whole fleet. There is certainly a market for turbo props. I think the 146 operation being suddenly outsourced completely stands out a bit.
Alliance F100 crews are much cheaper and the mining boom is over.
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http://http://australianaviation.com...-fifo-charter/
Chadzat anyone's guess really. I'd be very surprised if the atr (apart from the old ones) were to be scrapped. Pretty expensive putting them on the VAA aoc to then scrap the whole fleet. There is certainly a market for turbo props. I think the 146 operation being suddenly outsourced completely stands out a bit.
Alliance F100 crews are much cheaper and the mining boom is over.
Chadzat anyone's guess really. I'd be very surprised if the atr (apart from the old ones) were to be scrapped. Pretty expensive putting them on the VAA aoc to then scrap the whole fleet. There is certainly a market for turbo props. I think the 146 operation being suddenly outsourced completely stands out a bit.
Alliance F100 crews are much cheaper and the mining boom is over.
Regarding the 146, rumour has it CASA wouldn't approve another type on the VARA AOC.
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Virgin shareholder spat sparks aviation shake-up
Several weeks ago Air New Zealand's chief executive, Christopher Luxon, stood up in a private meeting and called for Virgin boss John Borghetti to resign. He has no such plans.
Several weeks ago Air New Zealand's chief executive, Christopher Luxon, stood up in a private meeting and called for Virgin boss John Borghetti to resign. He has no such plans.
- Apr 1 2016 at 6:00 PM
- Updated Apr 2 2016 at 1:12 PM by Michael Smith
It is not unusual for big personalities to clash in the high-octane world of aviation, but things have been particularly tense among Virgin Australia's shareholders lately.
Things came to a head several weeks ago when Air New Zealand's headstrong chief executive, Christopher Luxon, stood up in a private meeting and called for Virgin boss John Borghetti to resign.
Virgin chairman Elizabeth Bryan, who is said to run a tight ship, was having none of it and is believed to have stared down Luxon, who this week quit the board and has put his airline's 26 per cent stake in Virgin up for sale.
But the motivation for Air NZ ending its five-year relationship with Australia's second-largest airline runs far deeper than a personality clash between two airline chiefs.
Air NZ has been disappointed with Virgin's financial performance for some time, and was becoming increasingly concerned it would be asked to stump up more cash when Borghetti completes a capital review in two to three months.
At the end of the day, Air NZ needs the capital locked up in Virgin to battle intense competition on home soil – which was the key reason behind its decision.
Unable to get the other shareholders on side, Luxon decided to step down. That meant Air NZ had little choice but to go public on plans to put a significant chunk of Virgin Australia's tightly held share register into play. Former Air NZ chief Rob Fyfe oversaw the initial investment in 2011.
Air NZ folk grumpy
"It is no secret the Air New Zealand folk were grumpy. If you push for management change and can't bring others with you, you either exit or shut your mouth," says one observer.
Air NZ chairman Tony Carter flew to Sydney on Wednesday to meet Bryan at Sydney's Intercontinental Hotel. Because the hotel was so close to Virgin's head office near Circular Quay, Borghetti also joined the discussion. They agreed at that meeting that the existing code-share arrangements with Air NZ would remain in place.
It was a busy day for Borghetti, who was preparing to travel with journalists to Los Angeles over the weekend to showcase the airline's new business-class product, a trip he has since cancelled. He was already scheduled to lunch with another key stakeholder, Etihad's Australian-born chief executive James Hogan, who was in town for a series of events.
"There have been a lot of tough weeks. Whenever you are trying to create something worth fighting for you will have detractors trying to pull you down. This week is just one more week," Borghetti told AFR Weekend in his only interview since Air NZ announced it was reviewing its stake.
The move paves the way for a new player to enter the market, or for Virgin to be taken over entirely, in what would be the biggest shake-up to Australia's aviation market since the collapse of Ansett in 2001.
But it has also thrown the spotlight on Borghetti's near six-year tenure at Virgin, the former budget carrier known as Virgin Blue which he has taken upmarket and turned into the first serious competitor to Qantas since Ansett.
Air New Zealand, and many in the investment community, and Borghetti's enemies at his former employer Qantas, believe cracks are appearing in his capital-intensive strategy. Like Qantas boss Alan Joyce two years ago, it is now Borghetti's turn to wake up to headlines suggesting he step down.
Support of other stakeholders
However, the son of Italian immigrants who started his career in the Qantas mailroom says he is not going anywhere. Importantly, he appears to still have the support of his three other key stakeholders – Etihad, which owns 25.1 per cent, Singapore Airlines with 22.2 per cent and Richard Branson's Virgin Group, with 10 per cent.
"I don't intend to go anywhere; I've still got things I need to get done," Borghetti, 60, says.
He can't deny it has been a tough week though. A day after The Australian Financial Review's Street Talk column reported there was dissent in the Virgin ranks, Air New Zealand announced it had appointed Credit Suisse to review its stake in the airline, and ratings agency Standard & Poor's revised its outlook on the airline to "negative" from "stable".
"The media has been under the impression that Borghetti is good but we just sit here and say … he has no idea. It is probably better for Qantas he has stayed there because he has just muddled around," said one analyst, who did not want to be named.
Virgin last week obtained a $425 million unsecured loan from its four big shareholders, including Air NZ, as part of a broader review of its capital structure that is expected to be completed in two to three months.
While Virgin returned to profitability in the first half, analysts say the concern is that the money now being raised is being used to repair the balance sheet rather than fund growth.
Standard & Poor's says Virgin faces a "potentially sizeable funding requirement" over the next 12 months, including refinancing the $425 million loan.
Criticism of Borghetti, who is believed to have offered to retire a year ago but was asked to stay on by Bryan, has only surfaced recently, as Qantas's spectacular turnaround put the spotlight on Virgin's weaker financial position.
Supporters take long view
But he still has plenty of supporters who say his tenure needs to be judged with a long-term view.
"Virgin would have been out of business if they had stuck with being a low-cost carrier. He secured the survival of the airline and getting a cornerstone investor like Singapore Airlines is much better for aviation in Australia," according to one former airline executive.
Another industry veteran says: "Don't forget there was a point when Alan [Joyce] went to Canberra cap in hand. I think that emboldened Virgin to say 'We have got them on the ropes. If we keep pushing they will cave in.'"
The bitter capacity war with Qantas two years ago, which saw Qantas responding aggressively to defend its 65 per cent domestic market share, hurt both airlines. Joyce went to Canberra in 2014 seeking financial assistance, incensed that Virgin had been able to tap its cashed-up airline shareholders for funds which Qantas's ownership structure prevented it from doing.
In the end, Virgin suffered the most from the capacity war and its ability to recover was more limited than Qantas's, setting back Borghetti's turnaround plan by about a year.
Borghetti joined Virgin almost six years ago with an ambitious plan to transform the airline into a serious second-player in all segments of the aviation market – premium, low-cost, regional, frequent flyer and cargo.
He set about changing everything from the aircraft livery, staff, uniforms and lounges, introduced business class and made two major acquisitions – regional carrier Skywest and budget airline Tiger Australia. He wants 30 per cent of the corporate and government travel market by next year and is growing cargo operations.
Remarkable turnaround job
"It is a far better place to work at than it was years ago. He has done a remarkable job turning Virgin around – there are no two ways around it," says John Lyons, the president of the Association for Virgin Australian Australia Group Pilots, which represents about 50 per cent of the carrier's pilots.
This has come at a cost, though. The company's cash balance at December 31 was $544 million, down from $839 million a year earlier. The airline also took out a $US125 million loan in the first half and is working on a capital review which may hit shareholders up for hundreds of millions of dollars more. This proved too much for Air New Zealand. Virgin makes up about 30 per cent of its balance sheet compared to 3 per cent for Singapore Airlines, which has far deeper pockets.
Still, Borghetti says he has largely achieved everything he set out to do and cannot understand the criticism at a time when the airline has returned to profitability.
"When we were losing $300 million no one said so much as Boo. And now we have posted the biggest profit in the front half since 2010 and everyone is coming out of the woodwork. You kind of scratch your head a bit," says Borghetti. In February, Virgin posted a first-half profit of $81.5 million.
"Ever since Day One there have been people that have not believed we could achieve things. Analysts in particular because of their short-term thinking are focused on the next reporting period and we always said from the first day I walked in this is a long-term game."
Kiwi carrier major distraction
As Borghetti turns his attention to streamlining the airline's fleet to lower costs and the next round of balance sheet repair, he faces a major distraction in the form of the Air NZ stake.
The Kiwi carrier could sell its shares on-market, to one or more of the existing shareholders, or to a third party such as a Chinese airline or US airline Delta.
Virgin Group, which is in the process of selling Virgin America, would also have the cash, but Branson is more likely to sell down than buy.
The most likely scenario, though, looks like either Singapore or Etihad, or both, acquiring the shares. While Singapore and Etihad are competitors operationally, their sovereign wealth fund owners are said to have a close relationship.
Several sources who know Hogan say he still supports Borghetti and has no plans to launch a takeover for Virgin, particularly when Etihad faces its own challenges in its key markets in Europe and the Middle East.
Borghetti is also close to Singapore Airlines, which wasn't saying much this week, except that it has a "strong relationship" with Virgin Australia.
"Neither of them want another airline on the register. It was combative and unhelpful and un-productive. If I was Singapore or Etihad I think they are more likely to work it out between them," a senior aviation executive says.
Absolutely (there's a catchword 
) no truth in the rumour that LinFox would take a stake in VA!
Seriously, it's common knowledge Singapore (airline and State) has always coveted an Australian domestic operation, it just makes total sense that they would take the opportunity now that it is presenting itself.
Never say never to any Oz Government, someday in the future allowing 100% foreign ownership of any Australian asset. They'll spin it by saying its good for the economy and the consumer, the usual BS.
The general population has no idea what level of investment Singapore (the "State") has made in Australia already. I can name Optus and REX as just a few of companies, but tried Googling Temasek Holdings for more info.
) no truth in the rumour that LinFox would take a stake in VA!Seriously, it's common knowledge Singapore (airline and State) has always coveted an Australian domestic operation, it just makes total sense that they would take the opportunity now that it is presenting itself.
Never say never to any Oz Government, someday in the future allowing 100% foreign ownership of any Australian asset. They'll spin it by saying its good for the economy and the consumer, the usual BS.
The general population has no idea what level of investment Singapore (the "State") has made in Australia already. I can name Optus and REX as just a few of companies, but tried Googling Temasek Holdings for more info.
Aerial Perspective/Icarus 2001
Gee, thanks for that!!
I have only been a director of a number of public (Ltd.) companies, and private companies (Pty Ltd) with the AICD (and common sense) recommended knowledge(I hope) of the Corporations Act 2001 and predecessors, so what would I know??
There has been no suggestion that the status of Virgin will change, in particular that one shareholder will buy out all/other existing shareholders, and "take it private", (ceasing to be a public company) which has a completely different accepted meaning to "privatise/privatisation".
<https://stats.oecd.org/glossary/detail.asp?ID=3287>
Privatisation refers to transfer of ownership and control of government or state assets, firms and operations to private investors.
There are plenty of other dictionary definitions that say the same thing.
Tootle pip!!
PS: From about 1949, when Qantas was delisted, it had the status of an unlisted public company, because it did not have the spread of shares required for listing, it did not become a Pty Ltd company,which made the subsequent sale of shares in the company by the Federal Government straight forward. .
By contrast, the National Airlines Commission, t/a Trans Australian Airlines, later Australian Airlines, was "privatised", when it was sold to Qantas Airways Ltd. There was a little more to the transaction than that, but you get the drift.
Gee, thanks for that!!
I have only been a director of a number of public (Ltd.) companies, and private companies (Pty Ltd) with the AICD (and common sense) recommended knowledge(I hope) of the Corporations Act 2001 and predecessors, so what would I know??
There has been no suggestion that the status of Virgin will change, in particular that one shareholder will buy out all/other existing shareholders, and "take it private", (ceasing to be a public company) which has a completely different accepted meaning to "privatise/privatisation".
<https://stats.oecd.org/glossary/detail.asp?ID=3287>
Privatisation refers to transfer of ownership and control of government or state assets, firms and operations to private investors.
There are plenty of other dictionary definitions that say the same thing.
Tootle pip!!
PS: From about 1949, when Qantas was delisted, it had the status of an unlisted public company, because it did not have the spread of shares required for listing, it did not become a Pty Ltd company,which made the subsequent sale of shares in the company by the Federal Government straight forward. .
By contrast, the National Airlines Commission, t/a Trans Australian Airlines, later Australian Airlines, was "privatised", when it was sold to Qantas Airways Ltd. There was a little more to the transaction than that, but you get the drift.
Last edited by LeadSled; 3rd Apr 2016 at 05:28.
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The Australian view: An amazingly well run Aussie company that Air NZ have no choice but to exit from due to needing capital to fight tough competition in its home market.
The rest of planet earth including analysts and Air NZ view: another Aussie dog of a company that, in spit of restructuring is still basically a pennies in the dollar LCC. Changing the collar doesn't mean you have a new dog. Blowing through $150 mill in cash reserves to make $60mill profit doesn't make sense in any other first world country.
Air NZ sell, take a $200mill write down and move on. 10 yrs from now they'll be glad it was only $200mill.
We're about to find out what VB is really worth, I'm guessing not much.
The rest of planet earth including analysts and Air NZ view: another Aussie dog of a company that, in spit of restructuring is still basically a pennies in the dollar LCC. Changing the collar doesn't mean you have a new dog. Blowing through $150 mill in cash reserves to make $60mill profit doesn't make sense in any other first world country.
Air NZ sell, take a $200mill write down and move on. 10 yrs from now they'll be glad it was only $200mill.
We're about to find out what VB is really worth, I'm guessing not much.
