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Virgin Australia : 315 Million Loss - How long can they survive?

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Virgin Australia : 315 Million Loss - How long can they survive?

Old 28th Aug 2019, 06:29
  #21 (permalink)  
 
Join Date: Jan 2008
Location: australia
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Originally Posted by Paragraph377 View Post
Virgins issues run deep. Legacy issues created by legacy management a long time ago, with resolution of those issues having never been resolved. Il Deuce did very little for his $46m in earnings didn稚 he? Issues, where does one start:
  • Start with the day the airline floated itself on the stock market. A lemon of an investment that has never been worthy of investing in.
  • Then there is the egotistical fools like Godfrey, Borghetti and an assortment of bottom feeding executive management. Some of the 僧id-tier managers have been there since the beginning of the airlines life. Get rid of them! Some have never worked for another business or organisation. Time to go.
  • Ground handling: some of it is contracted out, time for the rest of it to be contracted out. A waste of money employing staff on the actual VA payroll. Take load controllers, duty managers, operational management, training also. Contract it out.
  • VA still has a half baked structure with a supposed business class and economy class. It痴 not. It痴 no comparison to its competition Qantas. For all its faults, Qantas has a defined structure of what is economy and what is business. The jets interiors reflect that. Virgin is an all economy layout with a couple of piddly differences up the front of the cabin. Not a true business class. I can稚 believe these muppets still haven稚 got it right after all this time.
  • 全pecialists鋳: Anyone with 壮pecialist in their job title should be dispatched to the unemployment line. Created positions for people on 僧ates rates or for loyalists who do nothing other than lick management痴 kyber痴 and drink latte痴 all day. Specialists - gooone.
  • Multiple fleet type: The day they branched out from 737痴 was another historical day in which they started to bleed money. Ansett part 2 if you ask me. Peter Ables killed Ansett the day he stood foot in Toulouse. VA management have done no better.
  • Airline acquisitions: oh Lordy, where does one start. Another series of poor executive decision making buying non-profitable or barely-profitable lemons at the wrong time. VA is still paying the price.
  • How about a decent finance team? VA have blundered on fuel hedge costs endlessly over the past 19 years and still can稚 get it right. And a general head office culture consisting of overpaid almost bureaucrat style employees who act as if they are in the public service.
As has been pointed out, VA is part of a duopoly yet has never hammered home true value or been a viable investment for the average punter. It痴 history of losing money is astonishing, and without numerous buy-ins and 礎ailouts its a miracle this lemon of an airline is still in existence. Besides, why fly VA or QF International when ANZ offers a far better service in every aspect of an airline - it痴 modern aircraft, seats, lounges and customer service. Can稚 be matched.

Without a doubt, this story is to be con稚........

Didn稚 today痴 announcement go at least some of the way towards acknowledging almost all of the above?
Lots of ground to cover, and there are 750 people who won稚 agree with me, but it痴 good to finally hear that something is happening that is relevant to the issues.
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Old 28th Aug 2019, 06:39
  #22 (permalink)  
 
Join Date: Nov 2006
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"‘Specialists’’: Anyone with ‘specialist’ in their job title should be dispatched to the unemployment line."

I know the word "specialist" isn't used but aren't pilots, reservations agents, operations personnel, loaders, "technicians"/engineers all specialists in their fields?

Last edited by Chris2303; 28th Aug 2019 at 23:05.
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Old 28th Aug 2019, 06:42
  #23 (permalink)  
 
Join Date: May 2019
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Originally Posted by What The View Post


The level of corruption, incompetence and greed amongst Australian corporates is breathtaking and the rest of Australia is too busy working to live to be able to give a shit.
You池e on to something there. Long suffering small investors and taxpayers often naively believe that the 奏op end of town must have skills and abilities that justifies their multi-million dollar pay days.
Unfortunately, too often their skills are in networking and self-promotion.
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Old 28th Aug 2019, 07:03
  #24 (permalink)  
 
Join Date: Jun 2012
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750 people being moved on will only touch the surface of waste.

Like a previous poster mentioned VA is exactly like the public service, ridiculously over staffed and everyone in the office by 930 and gone by 1430 to beat the traffic back to the gold or sunny coast... add to that it痴 based in BNE which has a very limited talent pool compared to Sydney and Melbourne hence why as also mentioned quite accurately many in management there have never worked elsewhere, likely never flown JQ or QF just living in their own glorified bubble..

Good to see however the new CEO is telling it how it is and not trying to put a BS spin on the situation and talk about how amazing they are and everything was fine like the predecessor who couldn稚 see past his own hubris.

I do hope PS can clean up the mess he has been left.
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Old 28th Aug 2019, 08:19
  #25 (permalink)  
 
Join Date: Aug 2007
Location: australia
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Don稚 they still have a fleet of EJets and ATR痴 in moth balls they are paying leasing fees on?
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Old 28th Aug 2019, 08:42
  #26 (permalink)  
 
Join Date: Jul 2006
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  • “‘Specialists’’: Anyone with ‘specialist’ in their job title should be dispatched to the unemployment line. Created positions for people on ‘mates rates’ or for loyalists who do nothing other than lick management’s kyber’s and drink latte’s all day. Specialists -
There have been glimmers of hope in the past when the used car salesmen and their pets, purveyors of the Virgin flair, were dispatched. Perhaps the process needs to be repeated and maybe target the owners of “sucked mango” haircuts, man-buns and anybody drinking Kale smoothies or decaf.
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Old 28th Aug 2019, 08:44
  #27 (permalink)  
ebt
 
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How long can they survive? Looking at the financials, for while longer yet. They had $1.7 billion in the bank at the end of June, but do have just over $1 billion in debt repayments due in 2020. But the operations are making decent cash flow, and given they pay off the last of the aircraft that were under the EENs next year, their unencumbered asset base should rise. If they can pull off the labour and supply chain savings of $75 million and $50 million, then it becomes easier. Get the network right and optimise it for cash generation rather than dick measuring, and it'll be a doddle.

I realise that real people are going to lose their jobs here, so I'm not trying to be trite. But Scurrah is right to take the approach he has so that a lot more than 750 people will keep their jobs over the long term, and the public of Australia get a choice of two well-funded airlines to fly on.
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Old 28th Aug 2019, 08:49
  #28 (permalink)  
 
Join Date: Apr 2013
Location: down under
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IIRC some years ago Toll GAVE AWAY their shares in Virgin. It shows how highly they valued it.
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Old 28th Aug 2019, 09:01
  #29 (permalink)  
 
Join Date: Apr 2016
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Originally Posted by KZ Kiwi View Post


Having recently flown AirNZ a number of times internationally, in my opinion QF international and domestic offer a far superior service in all aspects. The AirNZ boiled lollies are good though so I guess they got that right. Each to their own though....
Yes let痴 not forget the boiled lollies before pushback... lol
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Old 28th Aug 2019, 09:10
  #30 (permalink)  
 
Join Date: Oct 2004
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It is in the best interest of QF to keep Virgin going. The CFO has said so himself. Better to have a competitor that you know and can handle, (happy for them to make money just not so much that effects QF core business) than some new competitor that you don't know.
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Old 28th Aug 2019, 09:16
  #31 (permalink)  
 
Join Date: Jul 2009
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Originally Posted by 777Nine View Post
To answer your question about why they can't make money in a duoply is simple: poor management which resulted in poor decisions being made which led to poor results.
Yes and yet another line of excuses yet again "it's the market", "it's the currency", "it's the tooth fairy"... whatever... despite what people think of the competition they just announced a nearly $900M profit. There needs to be a top to mid level clean out at this organisation and I mean a CLEAN OUT... not a "right-sizing" and the rest of the BS... they mumble this garbage language every time they publicly announce anything yet they can't run the fundamental business profitably.

Wouldn't blame the new bloke as he's only been there 5 mins but in any other serious business this would bring on a massacre level of redundancies and targeted at those that don't contribute or are incompetent. It's gone beyond a joke now. For all it's glorified reputation I'm stunned SQ hasn't pulled the plug - you'd think any other company the storming out the door of it's major shareholder in Air NZ a few years ago would have had the then CEO's head on the chopping block the next day but no, he stayed and continued to be paid bonuses. If it weren't so serious it would be sickening.
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Old 28th Aug 2019, 09:18
  #32 (permalink)  
 
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Originally Posted by Icarus2001 View Post


The exact same conditions that Qantas operated in profitably.

Does anyone know the total staff at VA? 750 not required, just wow.
One of the reports said that the 750 was approximately 7.5% of the total staff so I'd say from that, around the 10,000 mark.
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Old 28th Aug 2019, 09:21
  #33 (permalink)  
 
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Originally Posted by Oakape View Post


Isn't that approximately what QF lost in ONE year a little while back? And they seem to be doing ok now.
No. It's different because QF made substantial profits before and after that... it was a write down with the underlying loss being something like $646M if I recall correctly. Add up all of QF's losses and profits over the last 10 years and it's in positive territory, do the same for Virgin and it's well and truly negative. Also, someone needs to tell the paper it's Virgin Australia Airlines not Virgin 'Airways'.
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Old 28th Aug 2019, 09:24
  #34 (permalink)  
 
Join Date: Jul 2009
Location: Australia
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Originally Posted by dragon man View Post


If I flew international I would be worried, unlike domestic here it痴 a cut throat market. Plan for the worst hope for best, hope he can turn it around the last thing Australia needs is Qantas operating domestically on its own. Good luck.
I doubt that will happen. If Qantas were to be in that position I wouldn't at all be surprised if NZ started a low cost domestic operation or even one of the US carriers.
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Old 28th Aug 2019, 09:25
  #35 (permalink)  
 
Join Date: May 2002
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Originally Posted by Paragraph377 View Post
Ground handling: some of it is contracted out, time for the rest of it to be contracted out. A waste of money employing staff on the actual VA payroll. Take load controllers, duty managers, operational management, training also. Contract it out.
I think it should be the opposite. Every contract company throughout the network is useless. Never enough staff, running between aircraft, even serving the opposition at the same time. Always new people, with little to no training and no idea.

I do not consider OTP a priority but get into the Gold Coast 10 minutes early and nearly always leave 10 minutes late.

I feel for the 750 staff, not nice to lose your job. A lot of us on here have been there. BUT, I have no doubt there are a LOT of people doing sweet f^&ck all day in and day out. One thing the airline has always been good at, is creating positions for people that do not really make any difference to the operation one bit.

Paul has certainly been given a poisoned chalice. I hope he can come through with the goods.
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Old 28th Aug 2019, 09:28
  #36 (permalink)  
 
Join Date: Jul 2009
Location: Australia
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Originally Posted by What The View Post
Why don稚 people just see this for what it is?
New CEO joins.
Tanks the profit first year and has large writedowns to clear the decks.
Announces large job cuts but doesn稚 disparage the previous management funnily enough.
Moves on some upper level managers to bring his own team in to share the spoils.
Miraculously returns the business to profit and is handsomely rewarded for doing so.
Wash, Rinse, Repeat.

The level of corruption, incompetence and greed amongst Australian corporates is breathtaking and the rest of Australia is too busy working to live to be able to give a shit.
That would be plausible and probably correct in most other businesses, but this one has been incompetently managed and not made a profit for YEARS... it's not like he came in and rang alarm bells and allowed it to tank as you say, it was at the bottom of the Marianas Trench gasping for the last breath of oxygen from it's International Airline Consortium SCUBA tank before PS arrived.
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Old 28th Aug 2019, 09:55
  #37 (permalink)  
 
Join Date: May 2012
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Originally Posted by Servo View Post
I think it should be the opposite. Every contract company throughout the network is useless. Never enough staff, running between aircraft, even serving the opposition at the same time. Always new people, with little to no training and no idea.
You forgot 'charging a small fortune when costs could be kept in-house'....
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Old 28th Aug 2019, 09:57
  #38 (permalink)  
 
Join Date: Oct 2009
Location: Australia the Awesome
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Red face Spot On What The

Originally Posted by What The View Post
Why don稚 people just see this for what it is?
New CEO joins.
Tanks the profit first year and has large writedowns to clear the decks.
Announces large job cuts but doesn稚 disparage the previous management funnily enough.
Moves on some upper level managers to bring his own team in to share the spoils.
Miraculously returns the business to profit and is handsomely rewarded for doing so.
Wash, Rinse, Repeat.

The level of corruption, incompetence and greed amongst Australian corporates is breathtaking and the rest of Australia is too busy working to live to be able to give a shit.
Sooo true, watch it lose money until all the major EBA's are signed for no increase, then a miraculous turn around
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Old 28th Aug 2019, 10:01
  #39 (permalink)  
 
Join Date: Jul 2009
Location: Australia
Posts: 698
If I were Delta, I'd step in and offer to put the owners out of their misery and offer a low price for the whole outfit. I'd insist it were NOT on a transmission of business basis so that I could throw away anything of no value and just keep the core... Order a bunch of decals for temporary application to the remaining aircraft and then re-employ those I wanted on new conditions. Re-brand the whole thing Delta Australia, keep the colours for cheaper transition and get rid of the archaic reservations system and deploy Delta's IT platform, offshore all the maintenance to the United States to Delta's technical division other than daily maintenance and get rid of every aeroplane that doesn't exist in the parent DL fleet already. LAX would be gone, absorbed into DL, HKG gone, a fleet of 737-800s and get rid of Tiger, just merge any part of value into mainline. Contract out everything except for front line supervision, back office, etc. Load Control as it would presumably now be in the Delta system could be done remotely from Atlanta. Reservations similarly could be done by a combination of res office here and out of hours switched through to the USA (just like QF did with Tulsa and Hammersmith in the 80s and 90s).
I'm no big fan of the Americans as a nation at the moment, but their companies know how to clean a place out and re-set the priorities to making money, particularly in somewhere like Oz where they only have one major competitor.
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Old 28th Aug 2019, 10:05
  #40 (permalink)  
 
Join Date: Aug 2007
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Someone commented that some employees are classified as "specialist". In the Australian context, that seems odd but how odd is it to have a General Manager Customer Journey? Believe it or not, that position exists at Tiger!
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