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VA pilots worried about employment 2021

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VA pilots worried about employment 2021

Old 31st Mar 2020, 10:36
  #741 (permalink)  
 
Join Date: Jun 2015
Location: brisbane
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It won't be a popular opinion but I think as it stands when QF gets back to flying there will be job losses and will likely come back a smaller airline, now assuming most here still believe in free markets and true capitalism then VA and QF should be left on their own.

If as most here have figured out VA goes under due to chronic long term miss-management then like in the Ansett days QF would have to pick up the slack, which means it will not only employ all of its staff but in addition a lot of VA ex employees.

At some stage of the game another airline will be born and new jobs created and a new cycle will begin once again. This is what free markets and true capitalism is all about. I would argue the same for any industry else we might just as well just give up and go all in on communism, Where kinda half way there anyway!
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Old 31st Mar 2020, 11:13
  #742 (permalink)  
 
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Government likely to reject Virgin bailout plea

Government set to reject Virgin's $1.4b opening gambit
Lucas Baird and Jemima Whyte
Updated Mar 31, 2020 Ė 6.18pm,first published at 9.43am

The federal government looks set to reject Virgin Australia's initial request for a $1.4 billion bailout loan, as Qantas pressures its debt-laden rival by insisting any government assistance be proportional and tensions between the two airlines reach new heights.
Virgin has asked for a $1.4 billion loan to help it survive the coronavirus crisis. Bloomberg

Finance Minister Mathias Cormann said the government is committed to having two competitive domestic airlines, but didn't outline what any additional industry wide financial support might involve.

"It is not our plan to take a stake in an airline," Mr Cormann told the ABC. "But let me also say that on the other side of all of this, we are committed to ensuring that through our policy settings and the like that on the other side, that we have two competitive airlines."

The latest battle between the airlines on the form government assistance should take comes a week after Virgin complained to the competition regulator tnat Qantas was spreading misinformation designed to undermine the smaller airline during the turmoil.

"At a time of crisis when so many companies are working to get things working for Australia, keep Australia afloat if you like, to have comments about 'survival of the fittest' and implications publicly made to allow Virgin to go under, I just think that's unhelpful," Mr Sims said at the time.
He declined to comment on Tuesday.

"I don't want to be seen as sending any messages, one way or the other," he said.

Qantas chief executive Alan Joyce has previously said: "If the government is helping, it should help an industry, not a particular company. Governments are not there to pick winners and losers".

The push for proportional funding at would equate to about $4.2 billion if Qantas were to receive similar funding to Virgin's requested $1.4 billion, based on revenue numbers.

Both airlines are likely to need further assistance, depending on how long their planes aren't flying due to COVID-19, but Virgin will need financial help sooner.

"Virgin has a massive liquidity issue," Air Intelligence and Research boss and former Qantas chief economist Tony Webber said. "They have had a run of losses, particularly in the international business, and it will need a quicker and faster bailout than any other airline in Australia."

Virgin has about $900 million left in the bank. However, ratings agency group Fitch said it expects this will come under pressure faster than it had previously anticipated during the crisis.

Citi analysts estimate that Qantas can survive 11 months of grounded planes, after it raised $1.05 billion in debt funding of up to ten years last week.

The federal government has already announced a $715 million support package for the aviation industry, and close to $300 million more in assistance for regional airlines.

Qantas and Virgin have between them stood down around 28,000 pilots, cabin crew and other workers in an attempt to cut costs while most of their aircraft are grounded.

Across the Tasman, Air New Zealand has cut 3500 jobs in response to the crisis.

Qantas, Rex would seek similar funding deals

Mr Webber said the government would have to prepare itself for similar requests from Qantas and Regional Express if it granted Virgin the loan.

"Particularly given Virgin's ownership structure ó not to say Qantas and Rex do not have significant foreign shareholders, but they are not as significant as Virginís ó you can bet Qantas and Rex will have their hands out too," he said.

Under Virgin's plan for a loan facility, taxpayers would lend the airline $1.4 billion for a term of two or three years. If Virgin was unable to meet its obligations, the cash would be converted into an equity stake.

This condition would have likely further complicate Virgin Australia's shareholding structure, only 10 per cent of which is a free-float. The other 90 per cent is held in varying levels by Singapore Airlines, Etihad, Nanshan, HNA and Richard Branson's Virgin group.

Virgin Australia has so far ruled out approaching any of its shareholders for a capital injection.

And sources close to Singapore Airlines, which recently raised $S19 billion ($21.6 billion), laughed off suggestion it would inject its new cash into or takeover Virgin as it is still managing its own response to the pandemic.

Why a Virgin bailout call is trickier than $130b in wages

Mr Webber agreed. "I suspect their owners ... believe they have put enough into Virgin Australia, have their own problems due to the virus and don't want to put in any more cash," he said.

Tourism Australia chairman Bob East declined to comment on government assistance but said two competitive airlines were crucial to a successful tourism industry. Mr East sits on the Tourism Australia board with both Virgin chief executive Paul Scurrah and Qantas' Alan Joyce.

"We really do need a sustainable, competitive aviation sector....that fuels tourism. It's really the backbone of the proposition a nation has to offer," he said. He noted that travel around Australia relied on competitive domestic carriers, adding that 70 per cent of international visitors to Cairns arrived on a domestic flight.

Last edited by John Citizen; 31st Mar 2020 at 11:27.
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Old 31st Mar 2020, 11:57
  #743 (permalink)  
-41
 
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Nah QQ will buy VA from the ashes that will give Alan a true competitor.


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Old 31st Mar 2020, 13:12
  #744 (permalink)  
 
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-41..I think this is the fairest scenario. Let market forces dictate the outcome. If the banks wont lend more and nor will the shareholders, surely does that not speak to past business decisions? These are the stakeholders who should wear the pain.

As for the employees, there will be a new airline, coming soon, rising like a phoenix from the ashes.

Of course VA staff will need to accept much lower $$, but in return they will go back to being part of a competitive, successful airline.

If you want to know what happens when the second major airline collapses, just look back 19 years. Competition returned, LCCís grew, fares came down, employment increased.

The Government should not pump air into a flat tire, rather let market forces replace it.
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Old 31st Mar 2020, 20:11
  #745 (permalink)  
 
Join Date: Mar 2006
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Virgin notes (ASX: VAHHA) are trading at less than 50% with a market capitalisation of < $ 500 million. There is no capacity to generate enough income to trade out of this while COVID is around.

VAH investors are looking to shore up their own core companies and so far, have failed to come to the table, and it seems unlikely the Australian government will fund a commercial bail out.

Isn't it time to preserve the remaining cash for staff payouts rather than throw good money after bad?

There will be a better airline that will rise from this.
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Old 31st Mar 2020, 20:52
  #746 (permalink)  
 
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Originally Posted by Led Zeppelin View Post
The net result is the NZ government has over 80% of the issued scrip.
I'm sorry, I don't understand how you can own 80% of the issued scrip and still have only a 52% shareholding?
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Old 31st Mar 2020, 21:13
  #747 (permalink)  
 
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After the $885 million injection, yes the New Zealand government had over 80%. It's since been diluted.
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Old 31st Mar 2020, 22:51
  #748 (permalink)  
 
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As a QF driver, I really do hope Virgin get through this and it must be a very difficult time.
If the government hadnít let every Tom, Dick and Harry government funded airline fly 20 A380ís a day into Australia,Virgin international would have had a chance to prosper and not drain so much capital from the rest of the business.
Good luck guys hope we both make it to the other side !
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Old 31st Mar 2020, 23:25
  #749 (permalink)  
 
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I agree - this country really needs 2 airlines for healthy competition - even if the current iteration of VAH folds, there is sure to be a much leaner Virgin Australia to follow on the other side.
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Old 1st Apr 2020, 00:00
  #750 (permalink)  
 
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It appears VAH are looking to raise funds by selling their unencumbered B777-300ERs. Based on what Etihad received for their B777-300ERs the best VAH could expect in the current climate is just USD30M per pop. Sad days to be even sadder later in the year. With both Airbus and Boeing suspending production of new aircraft until further notice this in theory will help support the used aircraft market.
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Old 1st Apr 2020, 00:03
  #751 (permalink)  
 
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Originally Posted by strobes_on View Post
I agree - this country really needs 2 airlines for healthy competition - even if the current iteration of VAH folds, there is sure to be a much leaner Virgin Australia to follow on the other side.
Even if VAH in its current form files for administration, the "mk 2" carrier thar rises from the ashes by the administrators may not actually carry the "Virgin" name. Purely to save on $$ licensing fees to Branson himself.

Whatever airline(s) rises from a VAH bankruptcy may be called something else instead of 'Virgin Australia'.
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Old 1st Apr 2020, 00:08
  #752 (permalink)  
 
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surely does that not speak to past business decisions?
That mentality is exaclty what needs to be put aside.
It's the business going foward that needs to be considered, not past mis management.
My speculation as an outsider is that a new VA will closer resemble the original company anyway.

I think it's nothing more than childish for AJ saying Qantas should get $4B+ if virgin get thier $1.4B. Some of the populous get goverment handouts that I dont because they NEED them. Just because my neighbour gets a dole payment doesnt mean I need to (yet)

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Old 1st Apr 2020, 00:25
  #753 (permalink)  
 
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Virgin 777s have small cargo doors - that will really knock the value down.
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Old 1st Apr 2020, 00:26
  #754 (permalink)  
 
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Originally Posted by Lapon View Post
That mentality is exaclty what needs to be put aside.
It's the business going foward that needs to be considered, not past mis management.
My speculation as an outsider is that a new VA will closer resemble the original company anyway.

I think it's nothing more than childish for AJ saying Qantas should get $4B+ if virgin get thier $1.4B. Some of the populous get goverment handouts that I dont because they NEED them. Just because my neighbour gets a dole payment doesnt mean I need to (yet)
I don't have a dog in this "fight" at all, but you can't compare the dole and individuals to a foreign owned corporation that has directly been mismanaged to the position its in. It is entirely fair Qantas receive proportional support, VA shouldn't be allowed to end up in a better relative position because of government support and end up on a level playing field because QF didn't get the same support (yes, overly simplified for sure, but you know what I mean). COVID-19 appears to be the final nail in the coffin for VA, but it sure wasn't the first one.

The only argument you can make for a VA bailout is that it will benefit Australian's with increased competition; without that, there is very little incentive for a bailout. It will be interesting to see how all of this plays out.

Regardless, the hurt is going to be real for all their employee's, and I wish everyone the absolute best of luck and fortune,
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Old 1st Apr 2020, 00:50
  #755 (permalink)  
 
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The business (or work) was there and will probably return with time after this covid thing. As to who actually does it remains to be seen.
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Old 1st Apr 2020, 00:55
  #756 (permalink)  
 
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Originally Posted by B772 View Post
It appears VAH are looking to raise funds by selling their unencumbered B777-300ERs. Based on what Etihad received for their B777-300ERs the best VAH could expect in the current climate is just USD30M per pop. Sad days to be even sadder later in the year. With both Airbus and Boeing suspending production of new aircraft until further notice this in theory will help support the used aircraft market.
Any source for this?

Iím not doubting you, but I would be interested to read any first hand information. A quick google search didnít show up any articles.
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Old 1st Apr 2020, 01:09
  #757 (permalink)  
 
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Virgin 777s have small cargo doors - that will really knock the value down.
I think they are going to rue that decision for a while longer yet.
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Old 1st Apr 2020, 03:56
  #758 (permalink)  
 
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is entirely fair Qantas receive proportional support, VA shouldn't be allowed to end up in a better relative position because of government support
Except its not entirely fair and that's the issue. Virgin actually have a need for the funding to survive, Qantas at this stage are merely saying 'if he gets some I want some'.

Remember Qantas is not Australian owned either (admittedly more so that VA). The relevance of a funding agreement cannot be limited by who owns most of the company, as at the end of the day nearly every employee, contractor, and supplier IS Australian.

All going to plan the loan is repaid and no harm done, or it's not and the goverment takes an equity stake of a size none of us know - perhaps more than half. All of a sudden VA will no longer be majority foreign owned anyway.

Of course the cards might all collapse anyway but if that is delayed a couple of years then in all likeliness the rest of the economy will be in a better position to absorb the fall out.

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Old 1st Apr 2020, 03:57
  #759 (permalink)  
 
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Originally Posted by DanV2 View Post
Even if VAH in its current form files for administration, the "mk 2" carrier thar rises from the ashes by the administrators may not actually carry the "Virgin" name. Purely to save on $$ licensing fees to Branson himself.

Whatever airline(s) rises from a VAH bankruptcy may be called something else instead of 'Virgin Australia'.
Let's hope so. It was helpful I'm sure, in building a brand for the LCC version of Virgin Blue, but they should have tossed it and the ridiculous licensing fees many years ago. Stupidity.
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Old 1st Apr 2020, 05:12
  #760 (permalink)  

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Originally Posted by junior.VH-LFA View Post
It is entirely fair Qantas receive proportional support, VA shouldn't be allowed to end up in a better relative position because of government support and end up on a level playing field because QF didn't get the same support (yes, overly simplified for sure, but you know what I mean)
The irony being that QF were gifted an entire Domestic Airline to set it on it's path back in the day. AN, at the time, had to build and invest in an International airline to match it but with the 2 clowns that held the reigns at the time were hardly forthcoming with funds.
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