Go Back  PPRuNe Forums > PPRuNe Worldwide > Australia, New Zealand & the Pacific
Reload this Page >

Government Loan to Virgin Australia

Australia, New Zealand & the Pacific Airline and RPT Rumours & News in Australia, enZed and the Pacific

Government Loan to Virgin Australia

Old 15th Apr 2020, 00:38
  #481 (permalink)  
 
Join Date: Aug 2000
Location: International
Age: 76
Posts: 1,389
Received 3 Likes on 3 Posts
Houlihan Lokey are still looking at the books; especially the assets and due dates for the liabilities.
B772 is offline  
Old 15th Apr 2020, 00:52
  #482 (permalink)  
-41
 
Join Date: Sep 2003
Location: a
Posts: 187
Likes: 0
Received 1 Like on 1 Post
How many $ million a year do you think Branson pulls out of VAH in fees for the franchise, it would be around the same amount as the loss last FY.
-41 is offline  
Old 15th Apr 2020, 00:56
  #483 (permalink)  
 
Join Date: Apr 2010
Location: Asia
Posts: 1,030
Likes: 0
Received 0 Likes on 0 Posts
Iím nervous after that PM statement. Itís clear in that statement from the PM that they are not assisting. Bit hard to say that, then pull some 11th hour deal.

The Government isnít going to help. Looks like a Shorten government would have.

There is only really one option left. Branson to give them a loan. Thatís the last desperate measure before calling it a day. He didnít save Virgin America.

Iím feeling everyoneís pain. Iím quite angry actually. It didnít have to end like this. 20 years. What an absolute waste and will be the worst corporate disaster in my lifetime. Bryan and Borghetti need to be stripped of every single cent to their names.

We donít want some bottom feeding loco from the far north taking over. I hope David Neeleman sees an opportunity to bring his pride and joy down under, because my god it would be a weapon here. Thatís the sort of carrier we need here, what Virgin should have been, and what this market needs. Not a Lion or Air Asia.
wheels_down is offline  
Old 15th Apr 2020, 01:09
  #484 (permalink)  
 
Join Date: Jul 2008
Location: Skating away on the thin ice of a new day.
Posts: 1,105
Received 4 Likes on 4 Posts
[QUOTE][/How many $ million a year do you think Branson pulls out of VAH in fees for the franchise,QUOTE]

I believe he has foregone those fees whilst the crisis goes on.

I also believe he propping Virgin Atlantic with a few hundred million.
ampclamp is offline  
Old 15th Apr 2020, 01:24
  #485 (permalink)  
 
Join Date: Jul 2008
Location: Skating away on the thin ice of a new day.
Posts: 1,105
Received 4 Likes on 4 Posts
Well, that quote from Morrison is fairly clear cut.

Unless "industry wide" is code for a rescue for all equally. However i cannot see intervention as Virgin stands right now. As much as I want them to, I can see why they would not.

Administration likely if it goes on much longer. Major share holders disinterested in further cash being injected.

If it goes into admin, I believe the administrators can force holders to take a haircut and cut payments etc and hopefully get a structure that can live on with as many staff as they can carry.
ampclamp is offline  
Old 15th Apr 2020, 01:24
  #486 (permalink)  
 
Join Date: Oct 2013
Location: New Zealand
Age: 70
Posts: 1,475
Likes: 0
Received 0 Likes on 0 Posts
Perhaps Scotty from Maketing, the Ďspeaking in tonguesí Pentecostal zealot will use prayer and a Hillsong singalong to solve all of Australiaís economic issues?? Címon Scomo, let it rip mate, apparently your personal sky fairy will help you and us!!
Paragraph377 is offline  
Old 15th Apr 2020, 01:34
  #487 (permalink)  
 
Join Date: Jan 2006
Location: Australia
Posts: 324
Likes: 0
Received 2 Likes on 1 Post
The bondholders will be very keen to do a deal. Maybe a debt repayment : equity swap. There are plenty of options. I donít mean to give false hope rather highlight a government (AUS or SIN) loan is not the only option.

Wealthy individuals want VAH to survive. White knights do exist. This trading halt brings to a head these considerations. You donít buy a house at auction when you know there will be a mortgagee sale for the same house in a few weeks.

Administration is not a death spiral, especially if some of the debt can be restructured, which is exactly what is being negotiated/proposed.
crosscutter is offline  
Old 15th Apr 2020, 01:43
  #488 (permalink)  
 
Join Date: May 2002
Location: The Best Place!
Posts: 208
Received 0 Likes on 0 Posts
Originally Posted by Double_Clutch
For those of you playing along at home, it seems that all airlines are part owned by overseas companies.

QANTAS is very much partly overseas owned. A little research goes along way
Double Clutch, Virgin isn't 'partly owned by overseas companies, it's pretty much fully owned!

Qantas has a 49% cap on foreign ownership.

Virgin is over 91% foreign owned. My taxpayer dollars aren't going to be used saving a grossly mismanaged company that is over 91% foreign owned.

The problem for Virgin's survival is two fold. The foreign ownership, and the core belief in the free market rather than government ownership of assets. The deal needs to be done so that the Chinese,SIA,Etihad& Branson are removed from the company. So if that means it has to collapse before being reborn, I'd suggest that is the government's view.

I'd also suggest that Virgin isn't going to disappear (I hope not) and that a certain deal will be done. But we will just have to wait and see.
mmmbop is offline  
Old 15th Apr 2020, 01:50
  #489 (permalink)  
 
Join Date: Jan 2019
Location: Australia
Posts: 243
Received 22 Likes on 10 Posts
Originally Posted by mmmbop
Double Clutch, Virgin isn't 'partly owned by overseas companies, it's pretty much fully owned!

Qantas has a 49% cap on foreign ownership.

Virgin is over 91% foreign owned. My taxpayer dollars aren't going to be used saving a grossly mismanaged company that is over 91% foreign owned.

The problem for Virgin's survival is two fold. The foreign ownership, and the core belief in the free market rather than government ownership of assets. The deal needs to be done so that the Chinese,SIA,Etihad& Branson are removed from the company. So if that means it has to collapse before being reborn, I'd suggest that is the government's view.

I'd also suggest that Virgin isn't going to disappear (I hope not) and that a certain deal will be done. But we will just have to wait and see.
Itís interesting when people refer to the free market - because the market is exactly the opposite to that right now. In fact there is no market because of (the correct) government actions.

And for those that think the free market is the answer to everything - I assume you donít support the money on offer to regional airlines? Or the money being spent keeping childcare centres open. Or the money being given to universities to help them offset the massive loss in revenue from foreign students. I also assume youíll hand back any job keeper subsidy you (or your company) is receiving because sure as hell having the government chip in $3k a month per employee isnít a free market either.
Colonel_Klink is offline  
Old 15th Apr 2020, 01:51
  #490 (permalink)  
 
Join Date: May 2008
Location: Australia
Posts: 565
Likes: 0
Received 0 Likes on 0 Posts
Virgin is over 91% foreign owned. My taxpayer dollars aren't going to be used saving a grossly mismanaged company that is over 91% foreign owned.
Rex is 100% foreign owned yet I havenít heard the same amount of commentary regarding them receiving government assistance.
wishiwasupthere is offline  
Old 15th Apr 2020, 01:56
  #491 (permalink)  
 
Join Date: Jan 2010
Location: Eagles Nest
Posts: 485
Likes: 0
Received 0 Likes on 0 Posts
Hopefully itís a poker game at the moment , bluffing the owners that they are about to lose everything if they donít pony up ? Their airlines not operating to Australia so no income from any extra investment? Scomo can easily say something changed and is now willing to help but thatís not the case today it seems .
Good luck .
Toruk Macto is offline  
Old 15th Apr 2020, 01:56
  #492 (permalink)  
 
Join Date: Sep 2005
Location: NT
Posts: 207
Received 5 Likes on 2 Posts
Originally Posted by Colonel_Klink
Itís interesting when people refer to the free market - because the market is exactly the opposite to that right now. In fact there is no market because of (the correct) government actions.

bingo.
I feel like Iím on crazy pills when anyone brings up ďfree marketĒ at the moment.

to quote the polarising Alan Jones Ēthe government has put the market in a coma, it needs to pay for the life supportĒ
chookcooker is offline  
Old 15th Apr 2020, 02:12
  #493 (permalink)  
 
Join Date: May 2002
Location: The Best Place!
Posts: 208
Received 0 Likes on 0 Posts
Originally Posted by Colonel_Klink
It’s interesting when people refer to the free market - because the market is exactly the opposite to that right now. In fact there is no market because of (the correct) government actions.

And for those that think the free market is the answer to everything - I assume you don’t support the money on offer to regional airlines? Or the money being spent keeping childcare centres open. Or the money being given to universities to help them offset the massive loss in revenue from foreign students. I also assume you’ll hand back any job keeper subsidy you (or your company) is receiving because sure as hell having the government chip in $3k a month per employee isn’t a free market either.
No Colonel. Not my belief, but what the Liberal Party is built around. Hence why people comment "its obvious the Labor Party would have bought out Virgin wheres the Liberal Party isn't going to"

The free market means minimum intervention by the government. Despite the narrowing of the difference, LNP and ALP still do differ here slightly. It doesn't mean no intervention. So hence why the government's current intervention strategies have been what they've been. e.g. the $715m package.
mmmbop is offline  
Old 15th Apr 2020, 02:14
  #494 (permalink)  
 
Join Date: Jun 2001
Location: home with mum and the kids
Posts: 176
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by wheels_down
Iím nervous after that PM statement. Itís clear in that statement from the PM that they are not assisting. Bit hard to say that, then pull some 11th hour deal.

The Government isnít going to help. Looks like a Shorten government would have.

There is only really one option left. Branson to give them a loan. Thatís the last desperate measure before calling it a day. He didnít save Virgin America.

Iím feeling everyoneís pain. Iím quite angry actually. It didnít have to end like this. 20 years. What an absolute waste and will be the worst corporate disaster in my lifetime. Bryan and Borghetti need to be stripped of every single cent to their names.

We donít want some bottom feeding loco from the far north taking over. I hope David Neeleman sees an opportunity to bring his pride and joy down under, because my god it would be a weapon here. Thatís the sort of carrier we need here, what Virgin should have been, and what this market needs. Not a Lion or Air Asia.
Maybe your lifetime Wheels, but for a number of those here (including VAI employees) there was a far larger Airline collapse in 2001, when after 65 years, an aviation icon collapsed. Your 20 years is not quite a third of that.

Like today, the liberal government of the time fumbled and then refused to help. Qantas stirred the pot and the unions merely sought to pursue their open agenda. The Labor government of the time resorted to scoring points.

In the end 16000 people lost their jobs.

Within a short space of time Virginblue and Qantas had filled the gap. The Air was much fairer than it had been before and more aviation jobs were created than previous.

Since the capacity war of 2013, VAI and QF have both been propping up yields in the domestic market with constrained capacity. For QF times have never been better. For VAI, even under these conditions they have struggled to make a profit.

Time for a new entrant, unconstrained capacity and more jobs.

My advice, employees need to think about their entitlements before Scurrah and his band burn through it all.
longjohn is offline  
Old 15th Apr 2020, 02:25
  #495 (permalink)  
 
Join Date: Jun 2010
Location: Sydney
Age: 40
Posts: 483
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by chookcooker

to quote the polarising Alan Jones Ēthe government has put the market in a coma, it needs to pay for the life supportĒ
You just lost all credibility.
normanton is offline  
Old 15th Apr 2020, 02:32
  #496 (permalink)  
 
Join Date: Jan 2013
Location: Australia
Posts: 159
Likes: 0
Received 22 Likes on 6 Posts
I do feel that SM canít really say anything else at the moment. He wants SQ (or at least one of the investors) to come forward with the cash. It looks to me like a bit of brinkmanship. If he indicates he will provide the assistance, the investors wallets will close immediately. 11 hour maybe.
Chad Gates is offline  
Old 15th Apr 2020, 02:36
  #497 (permalink)  
 
Join Date: Sep 2005
Location: NT
Posts: 207
Received 5 Likes on 2 Posts
Originally Posted by normanton
You just lost all credibility.
Cheers for that gem of an insight champ.
chookcooker is offline  
Old 15th Apr 2020, 03:02
  #498 (permalink)  
 
Join Date: Apr 2009
Location: SYD
Posts: 54
Likes: 0
Received 0 Likes on 0 Posts
AFR Street Talk reporting that all major shareholders unwilling to put in more equity.

https://www.afr.com/street-talk/virg...0200415-p54jwg
Vindiesel is offline  
Old 15th Apr 2020, 03:05
  #499 (permalink)  
 
Join Date: Sep 2009
Location: In a house
Posts: 402
Likes: 0
Received 1 Like on 1 Post
I work for the other mob, but I wish you all the best and understand it must be absolute hell what youíre feeling right now. Especially the ones who went through it before. Or the ones like me who are stood down with a family wondering how the mortgage will look towards the end of the year.

What I can say is the government introduced these measures and strangled our airline industry. It completely restricts our ability to trade. Airlines need forward bookings and consumer confidence.

So therefore there should be a sovereign backing of debt for our airlines, ticket guarantees for consumer confidence and if the airlines canít meet their debt when this is over, then so be it. However right now they should be afforded life support as necessary to hibernate and be ready to turn on again in the future.

Yes, the government canít pick winners or losers, but itís the government whoís done this to its companies and citizens to save its health system and liability. So itís the government who needs to sort it out.

Blueskymine is offline  
Old 15th Apr 2020, 03:15
  #500 (permalink)  
 
Join Date: Aug 2018
Location: Melbourne
Posts: 345
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by Vindiesel
AFR Street Talk reporting that all major shareholders unwilling to put in more equity.

https://www.afr.com/street-talk/virg...0200415-p54jwg
Itís behind a paywall, any chance of a copy paste
ECAMACTIONSCOMPLETE is offline  

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell or Share My Personal Information

Copyright © 2023 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.