VA pilots worried about employment 2021
About the smartest thing I’ve read here in a while.
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More to it than saving 10,000 jobs. Look at it holistically. It's been stated it affects the tourism industry and consumers. It's a cycle.
Yes, Ansett did not get any bailout. But Virgin Blue was there to fill the gap. No one is capable of filling the gap this time as globally all airlines will be wounded. And then, holistically, the industry suffers as do consumers. It's not just about 10,000 under the circumstances.
Yes, Ansett did not get any bailout. But Virgin Blue was there to fill the gap. No one is capable of filling the gap this time as globally all airlines will be wounded. And then, holistically, the industry suffers as do consumers. It's not just about 10,000 under the circumstances.
Evertonian
Exactly correct. There will not be much domestic travel until the end of this year at best. International, well you may find some countries closed for business for a while. VA were losing ONE MILLION dollars a day in fantastic market conditions. Think about that before you call your MP and ask him to back a bail out, loan, line of credit.
The news this morning indicated it would lead to the Government ending up owning a substantial part of VA. I’d say that is what they really want. But it has also been said that they don’t want to nationalise it. I dunno.
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VA were losing ONE MILLION dollars a day in fantastic market conditions.
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Analysts had reported (before COVID-19) the break-even for Virgin Australia was to occur within 6 months, with a small profit to occur in 2021. From there, it would rise. The necessary cost cutting focus had been implemented by Paul Scurrah. Yes, Virgin Australia was losing money (at a statutory level) for years, but this was on the right track to recovery.
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Evertonian
Can the government afford to NOT 'bail' VA out?
Beyond the 10,000 employees directly affected are numerous contractors and suppliers who will likley go to the wall at the worst possible time. And then there are the social costs.
$1.4B is a mere fraction of a percent of what the whole virus is going to cost, and if media speculation is anything to go by it's not exactly free money for VA. It's a loan (obviously of such risk the goverment had to be tapped), with a possible equity stake (thus appeasing the nay sayers of the current foreign ownership)
The option can't be ruled out entirely due to previous management errors.
QF have secured thier own funding and should be grateful they could. There is no point AJ crying foul because his own request for goverment assistance previousy knocked back when a high school accounting student could see the attempt for what ot was.
Beyond the 10,000 employees directly affected are numerous contractors and suppliers who will likley go to the wall at the worst possible time. And then there are the social costs.
$1.4B is a mere fraction of a percent of what the whole virus is going to cost, and if media speculation is anything to go by it's not exactly free money for VA. It's a loan (obviously of such risk the goverment had to be tapped), with a possible equity stake (thus appeasing the nay sayers of the current foreign ownership)
The option can't be ruled out entirely due to previous management errors.
QF have secured thier own funding and should be grateful they could. There is no point AJ crying foul because his own request for goverment assistance previousy knocked back when a high school accounting student could see the attempt for what ot was.
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10,000 employees would probably equate to around 300 million being paid in payroll tax per year (that's my figures, don't ask me to quote but think about it). That's 300 million going into (increasing) Australia's tax kitty.
Throw those 10,000 employees onto the street and burn Virgin at the stake then not only will there not be 300 million going into Australia's tax kitty but those 10,000 employees will then require government assistance/help in the form of job search etc. What will that equate to? I'm guessing probably close to 200 million per year initially. How long will that last for? Not exactly the best time to be looking for a job at the moment with the likes of Coles and Woolworths turning away Virgin staff in favour of Qantas staff.
That would be a resultant change of about 500 million dollars out of Australia's Tax kitty per year initially. Then add all the supporting companies that aren't Virgin that will have to cull staff (catering, cleaners, airport shops, airports/terminals, transport companies etc the list goes on). Even less tax going into the kitty.
A 1.4 Billion dollar loan to Virgin would start to give the government a return on their money after 4 to 5 years from the employees (payroll tax) on their own. That's before we even consider Virgin paying back the loan and god forbid, if they ever make a profit, start to pay corporate tax.
So my question is...........
Can Australia really afford to let Virgin go under?
It appears there are a LOT of people on here that would LOVE Virgin to fall over and see 10,000+ staff lose everything. What a nice bunch you are. It doesnt appear that this covid-19 virus is selective, hopefully it might thin out the population on here.
Your logic is compelling GoNorth but surely the issue is then why stop with VA? Why not rescue any large business that is circling the drain? For exactly the reasons you have stated. I am pretty sure that the "gumint" would be well aware that VA has been hanging by a thread for a few years. Someone above said that "analysts" said that VA was CLOSE TO BREAK EVEN. Hip hip hooray. After twenty years of trading they almost are back at square one. Forget about the shares issued at $2 now below 10 cents.
I cannot see the government falling for this one and it is pretty obvious Joyce will be doing all he can to stop any "bail out".
I cannot see the government falling for this one and it is pretty obvious Joyce will be doing all he can to stop any "bail out".
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Why not sell Tiger (OR KITTY) to anyone, start up an airline? Won’t need to be big no demand.
That would satisfy the competition purists.
Bailing out VOZ good public money after bad private.
That would satisfy the competition purists.
Bailing out VOZ good public money after bad private.
This thread has taken a ludicrous turn. The Australian government themselves would need to take borrowing measures to provide further capital. If people think government investment decisions are taken with a view of down-line welfare losses then I feel people need to get real.
The government has introduced spending that increases Australia’s total debt by 40%. It has introduced a wage subsidy for 6 million workers for at least 6 months. These are massive measures that will exist irrespective to support workers.
Back to Virgin...half the 737 fleet is owned. 4 777 are owned. The rest are leased. I have no idea when leases may expire but capital raising options are available. The problem is what investor in their right mind would stump up the cash? So indeed, what protection and requirements would the government demand? What was the interest rate charged by the NZ government on their loan to ANZ??? And they are the major shareholder.
I’m in no position to speculate and nor would I want to. It’s unfair. It’s a devastating situation. Good luck to us all. Just trying to keep it real.
The government has introduced spending that increases Australia’s total debt by 40%. It has introduced a wage subsidy for 6 million workers for at least 6 months. These are massive measures that will exist irrespective to support workers.
Back to Virgin...half the 737 fleet is owned. 4 777 are owned. The rest are leased. I have no idea when leases may expire but capital raising options are available. The problem is what investor in their right mind would stump up the cash? So indeed, what protection and requirements would the government demand? What was the interest rate charged by the NZ government on their loan to ANZ??? And they are the major shareholder.
I’m in no position to speculate and nor would I want to. It’s unfair. It’s a devastating situation. Good luck to us all. Just trying to keep it real.
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This announcement by VA management just shows there is nothing left in the locker. They have fired their last shot. I know many people in Virgin most of whom went through this same anxiety in 2001 but at the end of the day why should the government become a a partner in an airline owned by overseas interests? All the arguments about 10,000' people being out of work and the drain on the tax payers etc. were exactly the same when 16,000 staff were without work in 2001. If there is a sound business case for the void to be filled then someone will fill it. The only financial input the government will have is to guarantee the redundancy payments. There is no upside to this and I would hope that there is no-one enjoying the tragedy.