VA pilots worried about employment 2021
Join Date: Feb 2011
Location: Oz
Posts: 820
Well if they are paying that bond with Cash then the balance will be down to 400m. But that number will be even lower once the next three half’s pass. Essentially it could be 100-200m left.
It looks like the MAX deal is largely split 50/50 lease/own also.
More cash needed!
Just get SQ to buy off Etihad, Chinese and the public.
It looks like the MAX deal is largely split 50/50 lease/own also.
More cash needed!
Just get SQ to buy off Etihad, Chinese and the public.
Join Date: Aug 2000
Location: International
Age: 73
Posts: 1,366
Everybody should be aware the results released by VA on 26 Feb 20 were for the period ended 31 Dec 19. Likewise the S&P Global Ratings Outlook Update report issued on 28 Feb 20 was based on information released by VA on 26 Feb 20. S&P then factor in what they believe has taken place since 01 Jan 20 and what they see in the future.
Since the release of the S&P Update the outlook has become bleaker due to concerns about Covid-19 and the impact on travel generally. The share price has collapsed a further 17.14% and what happens between now and 30 Jun 20 will determine the future of VA. S&P modelling up to 26 Feb 20 showed VA defaulting in 2024 unless their trajectory changes for the better. Should it worsen default could occur earlier. The S&P modelling suggested there could be just $311M available to cover estimated 'claims' of $2B in round figures.
Should market passenger numbers start to reduce this week and the VA market share fall even lower due to concerns by agents and the travelling public there are concerns about the viability of VA the outlook could change for the worse very quickly.
Since the release of the S&P Update the outlook has become bleaker due to concerns about Covid-19 and the impact on travel generally. The share price has collapsed a further 17.14% and what happens between now and 30 Jun 20 will determine the future of VA. S&P modelling up to 26 Feb 20 showed VA defaulting in 2024 unless their trajectory changes for the better. Should it worsen default could occur earlier. The S&P modelling suggested there could be just $311M available to cover estimated 'claims' of $2B in round figures.
Should market passenger numbers start to reduce this week and the VA market share fall even lower due to concerns by agents and the travelling public there are concerns about the viability of VA the outlook could change for the worse very quickly.
Last edited by B772; 8th Mar 2020 at 00:29.
Join Date: Sep 2019
Location: Qld
Posts: 118
Originally Posted by PoppaJo
Well if they are paying that bond with Cash then the balance will be down to 400m. But that number will be even lower once the next three half’s pass. Essentially it could be 100-200m left.
It looks like the MAX deal is largely split 50/50 lease/own also.
More cash needed!
Just get SQ to buy off Etihad, Chinese and the public.
It looks like the MAX deal is largely split 50/50 lease/own also.
More cash needed!
Just get SQ to buy off Etihad, Chinese and the public.
SQ have also booked losses from their VA investment in their own financial reports, and it's assumed that SQ are writing off their VA losses.
There's a better chance of VA's other partners: DL or NH taking over VA, and that's NOT likely to happen either.
Join Date: Feb 2018
Location: Hyperspace
Posts: 104
There is no ‘White Knight’ scenario here. All major shareholders are suffering their own pain.
All VA employees need to think seriously about the future.
I’ve said it before, this looks a LOT like another Ansett.
All VA employees need to think seriously about the future.
I’ve said it before, this looks a LOT like another Ansett.
Join Date: Sep 2019
Location: Qld
Posts: 118
In addition, SQ doesn't have a respective track record of investing in other airlines.
There was SQ's involvement by investing in the NZ/AN debacle, even though they had the chance to walk away from AN when NZ used their veto to block SQ from buying News Ltd's stake in AN.
SQ also invested in VS, which turned out to a complete financial disaster, which led to SQ selling up at a loss to DL.
There was also SQ's involvement in Tiger Airways Australia, which they ended up "selling to VA" to save face after all the PR & maintenance debacles.
And then there's SQ's own 20% stake in VA. In the early years they were hands on (along with EY) during the early JB reign, spent a lot of Capital and tipped so much money (especially during the "capacity war") and it turned out to be a complete financial disaster.
There was SQ's involvement by investing in the NZ/AN debacle, even though they had the chance to walk away from AN when NZ used their veto to block SQ from buying News Ltd's stake in AN.
SQ also invested in VS, which turned out to a complete financial disaster, which led to SQ selling up at a loss to DL.
There was also SQ's involvement in Tiger Airways Australia, which they ended up "selling to VA" to save face after all the PR & maintenance debacles.
And then there's SQ's own 20% stake in VA. In the early years they were hands on (along with EY) during the early JB reign, spent a lot of Capital and tipped so much money (especially during the "capacity war") and it turned out to be a complete financial disaster.
Join Date: Aug 2000
Location: International
Age: 73
Posts: 1,366
engine out: You are correct about EY. They are in a mess. Merger discussions with EK were called off when EK discovered financial skeletons in the EY closet relating to the collapse of Air Berlin. EY has been cancelling aircraft orders and reducing flying considerably. About 200 EY pilots have resigned or gone to fly with EK in the last 3 years. This figure does not include the pilots who were layed off.
The value of the EY investment in the bankrupt Alitalia may be known soon after 18 Mar 2020 if any offers are made to the Administrators for the purchase of Alitalia or any of its components. LH, AF and KL have indicated they have no interest.
The HNA group are a basket case with debt USD117B and currently losing USD14M per week. Assets are being sold at fire sale prices. One could presume HNA would accept any offer for their VA holding.
The value of the EY investment in the bankrupt Alitalia may be known soon after 18 Mar 2020 if any offers are made to the Administrators for the purchase of Alitalia or any of its components. LH, AF and KL have indicated they have no interest.
The HNA group are a basket case with debt USD117B and currently losing USD14M per week. Assets are being sold at fire sale prices. One could presume HNA would accept any offer for their VA holding.
Join Date: Oct 2013
Location: New Zealand
Age: 68
Posts: 180
The pot of money is empty....has been for a long time
Originally Posted by B772
The HNA group are a basket case with debt USD117B and currently losing USD14M per week. Assets are being sold at fire sale prices. One could presume HNA would accept any offer for their VA holding.
Join Date: Aug 2009
Location: Australia
Posts: 476
The value in VA the consortium only wants is the passenger traffic on to their metal underpinned by the loyalty programs and their 'reciprocal' benefits. 10m Velocity Australians weighted towards flying on EY et al for program benefits.
VA share price @ 0.77c. How low can it go...
VA share price @ 0.77c. How low can it go...
Join Date: Aug 2000
Location: International
Age: 73
Posts: 1,366
T-Vasis: You had a slip of the pen. The VA share price is currently $0.077. The market capitalisation is equivalent to the cost of 2 x B777-300ER aircraft.
If you are a resident of PER and Velocity member EY would be of no interest to you. EY has withdrawn from PER completely plus another 15 destinations with more to follow.
If you are a resident of PER and Velocity member EY would be of no interest to you. EY has withdrawn from PER completely plus another 15 destinations with more to follow.
Join Date: Aug 2009
Location: Australia
Posts: 476
Yes - a slip of the keyboard.
But B772 - what value is Perth to anyone. That's not where the population and demand is. And I don't speak to just EY - I speak to all members where the program benefits apply - that includes the key shareholders of VA - hence their investment in the first place. They didn't invest becasue VA was a cash cow... They invested to capture the AUS market share to fill their own seats. Hence my use of 'et al' in the original statement. You're either a QF or VA member (or both in some instances).
But B772 - what value is Perth to anyone. That's not where the population and demand is. And I don't speak to just EY - I speak to all members where the program benefits apply - that includes the key shareholders of VA - hence their investment in the first place. They didn't invest becasue VA was a cash cow... They invested to capture the AUS market share to fill their own seats. Hence my use of 'et al' in the original statement. You're either a QF or VA member (or both in some instances).
Join Date: Aug 2006
Location: The Cesspit
Posts: 325
Originally Posted by PoppaJo
Might be a silver lining on the horizon. Oil Price absolutely dropping like a rock!
Crazy stuff! $20 oil not far off!
Crazy stuff! $20 oil not far off!
The primary reason it’s falling is the Russians and Saudis can’t figure out how much they have to cut production by when airlines (and everyone else) stops burning the stuff.
VA has a future but it can’t forever keep paying its debt obligations by borrowing new debt like a dysfunctional family paying one credit card off with another. This has resulted in VA bonds being 8.5% at a time of record low interest rates. I’d imagine the next bond rate is higher still. (The joys of a country where the banks would rather lend to prop up the housing market than to assist businesses). The billion dollars sitting in the bank earning nothing is all borrowed, costing VA approximately 85,000,000 a year for the necessity of an airline having a cash reserve as required by a high cash flow volatile business.
Sooner of later VA will have to improve its debt to equity ratio. Until then it’s reliant on the bond markets and hoping the current panic won’t result in the credit market doing anything stupid.
Join Date: Oct 2013
Location: New Zealand
Age: 68
Posts: 180
Oils ain’t oils
Just because the oil price is dropping it doesn’t mean VA will benefit. If they have hedged a large percentage of their fuel at a higher rate then there is no benefit when the price drops as they still have to pay the high rate. It’s the opposite effect when you hedge a large quantity at a low price and then prices rise exponentially. Knowing how the Village morons operate, I would bet that they have hedged high. They’ve done that before when the Godfrey gang were running the place and it almost sent them to the wall.
