Government Loan to Virgin Australia

[Buster Hyman]

I still can't see QF agreeing to the setting up of a LCC (JQ) to compete against them. However, it would be interesting if they were made to revert to QF as an INTL airline only & JQ as a DOM airline only...back to how it was. Of course, I can't see this happening either, but it would make it easier for a new entrant into the market.

[Riding the Goat]

VA atleast looking after its employees

https://7news.com.au/politics/virgin...rkers-c-967464

At least it looks like Virgin is looking after its employees and taking a more conservative stance on how to use the Jobkeeper payments and Annual Leave.

I wonder if Qantas and Jetstar will follow suit?

[TACQANAVIAVEC]

Originally Posted by Sunfish

The problem George is not me, it’s the tens of thousands who won’t get real jobs because of the cost to the community of protecting Qantas.

To put that another way, we let the car industry go, we should let Qantas go for exactly the same

We can’t afford you.

Huge difference mate, car industry didn't make money, QF does and as of now has the ability to survive this crisis unaided, something very few airlines around the world can claim.

It seems that in your altruistic world sending QF and their decently paid 30,000 workforce down the tube would unleash the aviation Kraken, bringing in thousands of million of billions of lower paying jobs from exceptional airlines such as Lion or Scoot so that towns such as Coober Pedy can be served by a daily double return B787 service to La Palma International. Where do I sign up?

[Icarus2001]

At least it looks like Virgin is looking after its employees

Well really the taxpayer is looking after them. By the taxpayer (via the govt) paying wages to staff that allows them to gain their annual leave credits back. This will cost VA nothing.

Did you forget about the ~220 Tiger pilots that "Virgin is looking after."?

[krismiler]

The car industry wasn't an essential strategic asset, vital to the national well being. Cars can easily be imported from multiple sources at a lower price, and dare I say it, better quality than they could be produced in Australia. Whilst it did provide jobs directly and also throughout the supply chain, the cost of maintaining those jobs was prohibitive. Given the limited local market and high cost of production the industry would always require support, and whilst everyone wanted Holden to be saved, few people actually went out and bought their cars. Ford Australia and Holden weren't going to become major exporters similar to Toyota and Hyundai so their prospects were very limited.

Qantas on the other hand is a strategic asset, particularly on the domestic side and can compete well with foreign airlines on the international side. It was previously profitable and will likely generate future profits once we are over the current situation. It may not even require a bail out if relative normality returns soon. Government resources will be stretched extremely thin in the coming months, if any aid is given to Virgin at all it will be very limited and conditional on the airline showing it can turn around in a fairly short time, which will require major restructuring and downsizing. Anyone who thinks Canberra will simply write a cheque which enables Virgin to continue in its present form is dreaming.

[Icarus2001]

Anyone who thinks Canberra will simply write a cheque which enables Virgin to continue in its present form is dreaming.

Perhaps that should be the last post in the thread until there is a further development? Difficult to argue with anything that you wrote.

[V1virgin]

Originally Posted by Icarus2001

Well really the taxpayer is looking after them. By the taxpayer (via the govt) paying wages to staff that allows them to gain their annual leave credits back. This will cost VA nothing.

QF is using the money to paydown annual leave - using taxpayer money to clean up their balance sheet. I thought they were against government handouts?

[Compylot]

One thing is for certain and that is that the Australian Government or any potential investor won't make may decision until they've made careful analysis of the expert opinions written down by the pilots on pprune.

I have heard this from an internal source.

[Led Zeppelin]

Yes, a separate confidential source has also indicated a government decision will be influenced by the sage comments within these forums.

So now we have multiple points of confirmation - facts always win out.

[TBM-Legend]

Originally Posted by B772

ampclamp. Whilst being interviewed on ABC breakfast radio Paul Scurrah effectively said 90% of the shareholders in VA indicated there were no funds available for VA. He went on to say VA were attempting to raise from other sources. In my opinion the only option would be to sell owned assets such as aircraft. If the assets were required in the future it could be a sale and leaseback. As there is uncertainty re the future of VA the lease rates would be prohibitive on a sale and leaseback arrangement.

Virgin don't have any unencumbered aircraft or other assets...they even have had E190's and ATR's parked in US and NZ for a year or two unable to get out of those leases. Big bucks per month for aircraft earning nothing..

[Paragraph377]

Originally Posted by TBM-Legend

Virgin don't have any unencumbered aircraft or other assets...they even have had E190's and ATR's parked in US and NZ for a year or two unable to get out of those leases. Big bucks per month for aircraft earning nothing..

A decision that is still negatively impacting VA. What a great Board, they should be so proud of their decisions in recent years! And to think these wankers are still drawing a wage....

[DanV2]

Originally Posted by TBM-Legend

Virgin don't have any unencumbered aircraft or other assets...they even have had E190's and ATR's parked in US and NZ for a year or two unable to get out of those leases. Big bucks per month for aircraft earning nothing..

VA directly owns half their 737 fleet.

4 of their 777Ws are also registered under "Virgin Blue (VB) Leaseco Pty Ltd" (a wholly owned subsidiary of VAH).

https://www.planespotters.net/airline/Virgin-Australia

[SPEEDI]

Originally Posted by V1virgin

QF is using the money to paydown annual leave - using taxpayer money to clean up their balance sheet. I thought they were against government handouts?

Pretty sure I read in the FAQ, QF weren’t doing this.

[Vindiesel]

From The Australian today: "Mr Godfrey said the airline had lost its cost advantage over the Qantas Group and any private or public investment should be contingent on Virgin Australia chief executive Paul Scrurrah forcing through a massive restructure to make the carrier viable in the long term."
What (if any) steps is the VAH CEO taking to significantly lower the cost base long term? Have the unions been approached about wage reductions or, at the very least, significant wage freezes to help make it more viable over the next 5-10 years?

[Toruk Macto]

If the owners of VA wanted to gift the ownership of their airline to someone who would take it ?

[crosscutter]

JB, in haste to transform Virgin into a QF competitor, signed too many bad supplier contracts which contributed more to loss of cost advantage than the salaries paid to the staff.

[Arctaurus]

Can't see any government investment - One of Scurrah's remaining options would be to position Virgin back to it's roots as a true loco with a single aircraft type only (B737) with a reduced fleet size. Get rid of VARA which has probably got some value in the west.

The problem is no private investor has come forward to date, the stakeholders are clearly not interested, so it's a matter of trying to reduce outgoings to the point where there is enough cash going forward beyond COVID. That's a very tricky exercise as the timing of the end of COVID restrictions is unknown, plus the recovery time back to a more "normal" market could take years.

[DanV2]

Originally Posted by Arctaurus

Can't see any government investment - One of Scurrah's remaining options would be to position Virgin back to it's roots as a true loco with a single aircraft type only (B737) with a reduced fleet size. Get rid of VARA which has probably got some value in the west.

The problem is no private investor has come forward to date, the stakeholders are clearly not interested, so it's a matter of trying to reduce outgoings to the point where there is enough cash going forward beyond COVID. That's a very tricky exercise as the timing of the end of COVID restrictions is unknown, plus the recovery time back to a more "normal" market could take years.

Reverting back to the LCC option using the owned 737 fleet is probably the more ideal option, via filing Voluntary Administration by calling in the administrators and relieving the shareholders of their requirements.

While the 'shareholders' may not be happy for 'losing control' of VA through administrators being called in, it may be better for VA (or a post-administration successor, whatever they call the post-administration airline, in the long run).

For SIA, Etihad, HNA, et al. If I were any of that lot, I'd be ensuring that VA wasn't trading while 'insolvent', as they'd be in trouble otherwise if they were (and face possible bans from managing a company in Australia if they were to invest in any Australian based company in the future).

If VA were found to be trading while 'insolvent', it'll add to the numerous Australian failures for the "so-called messiah" SIA (and would be a big setback for SQ 'trying to tap' into the Australian domestic market). SIA already has a trail of investment failures in Australia through Air New Zealand/Ansett and Tiger Airways Australia.

[davidclarke]

Originally Posted by DanV2

Reverting back to the LCC option using the owned 737 fleet is probably the more ideal option, via filing Voluntary Administration by calling in the administrators and relieving the shareholders of their requirements.

While the 'shareholders' may not be happy for 'losing control' of VA through administrators being called in, it may be better for VA (or a post-administration successor, whatever they call the post-administration airline, in the long run).

The problem being all the owned aircraft would be encumbered and likely repressed by creditors.

[Paragraph377]

Originally Posted by Vindiesel

From The Australian today: "Mr Godfrey said the airline had lost its cost advantage over the Qantas Group and any private or public investment should be contingent on Virgin Australia chief executive Paul Scrurrah forcing through a massive restructure to make the carrier viable in the long term."
What (if any) steps is the VAH CEO taking to significantly lower the cost base long term? Have the unions been approached about wage reductions or, at the very least, significant wage freezes to help make it more viable over the next 5-10 years?

The bald one comes out from his nature reserve in Tasmania to speak!! BG got the push once the airline starting to really grow. Much too big for his limited abilities. Brett’s legacy is floating a lemon of an investment so that Richard, Brett, Sherrard and Brett’s other high school buddies would receive millions of dollars worth of shares. Pay dirt! And benefit they did. The share price went downhill from the time they floated though. What did you do Brett in the years after the airline floated, to keep investors happy and to grow the share price? Yep, nothing. From memory Richard’s take was around $960m, Sherrard bailed early with around $60m to $80m, Godfrey around the $40m and a few other ‘mates’ took around $5m to $7m. Give or take a few million here and there. Along came Il Deuce and the race to the bottom hit hyper speed. I wouldn’t put any thought into or pay attention to anything current of former executives or Board say.

Brett, go back to your eco lodge and comfortable lifestyle c/o the original Virgin Blue float. The days of dancing around the tarmac and waving goodbye to planes are long gone, and so are you. Or are you camping this long weekend on Makepoo’s Island, the Island bought exclusively (supposedly) for staff to use? Another Virgin deception.