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 29th Apr 2020, 11:41
  #1121 (permalink)  
 
Join Date: Sep 2007
Location: Australia
Posts: 308
Received 89 Likes on 34 Posts
So you think QF should just start flying from everywhere, regardless of demand or feasibility, just to keep you happy, even though you will never fly with QF?
cloudsurfng is offline  
Old 29th Apr 2020, 12:05
  #1122 (permalink)  
 
Join Date: Feb 2008
Location: Aus
Posts: 571
Received 72 Likes on 25 Posts
Originally Posted by Lookleft
Then right on cue comes this which is none of the above:
To be fair though; he's never worked on a flight deck in his life.
junior.VH-LFA is offline  
Old 29th Apr 2020, 12:06
  #1123 (permalink)  
 
Join Date: Sep 2009
Location: In a house
Posts: 402
Likes: 0
Received 1 Like on 1 Post
Qantas will do exactly that for good reason. It won’t be able to fill a widebody initially out of Melbourne or Brisbane to wherever. It will be able to hub out of Sydney and possibly make it economical to fly one.

Of course the other hub carriers will do ex
exactly the same via their hubs. Even if they only half fill a widebody out of Melbourne to XXX, with the connecting passengers onto the next service the load may be full and the average load factor increases.

Of course, if Melbourne was closer than Sydney to the states or Asia, they’d hub there. However, as you know. It’s not.

Also let’s not forget Qantas ordered the 747-400ERs specifically to fly nonstop LA-MEL. It was the only carrier at the time to do so.

Originally Posted by Sunfish
And the first services that will start post pandemic will be XXX - SYD.
Blueskymine is offline  
Old 29th Apr 2020, 12:37
  #1124 (permalink)  
 
Join Date: Jul 2011
Location: Al's Diner
Age: 64
Posts: 206
Likes: 0
Received 25 Likes on 7 Posts
Wherever Qantas or any other International Airline decides to focus on as a port of entry into Australia will most likely depend on which state government stumps up the most cash in a post COVID world. Which state government will subside the most testing, quarantining etc.

Forget about $200mil odd to get Virgin to relocate to whatever state, the real money will be in which state puts up the most cash to deal with all the COVID restrictions on eventual inbound foreign traffic.
Potsie Weber is offline  
Old 29th Apr 2020, 21:51
  #1125 (permalink)  
 
Join Date: Jun 2019
Location: Denmark
Posts: 0
Likes: 0
Received 0 Likes on 0 Posts
Why is international flying even a thought at the moment?! No one will come here from foreign countries until there is a vaccine or COVID-19 is eradicated. No one will spend 14 days cooped up in a hotel (if they do, who pays for this?) which would be half of their holiday just to go back to country of origin to do it again. International air travel is dead for the foreseeable future, trans-con is the best we can hope for.
Ragnor is offline  
Old 30th Apr 2020, 01:18
  #1126 (permalink)  
 
Join Date: Aug 2002
Location: no fixed address
Posts: 181
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by Ragnor
Why is international flying even a thought at the moment?! No one will come here from foreign countries until there is a vaccine or COVID-19 is eradicated. No one will spend 14 days cooped up in a hotel (if they do, who pays for this?) which would be half of their holiday just to go back to country of origin to do it again. International air travel is dead for the foreseeable future, trans-con is the best we can hope for.

Trans Tasman is the best we can hope for?
VH-ABC is offline  
Old 30th Apr 2020, 02:02
  #1127 (permalink)  
 
Join Date: Apr 2020
Location: Chester
Posts: 9
Likes: 0
Received 0 Likes on 0 Posts
Trans Tasman is the best we can hope for?
Probably for the next few months at least and possibly the end of the year.
TCAS v2 is offline  
Old 30th Apr 2020, 04:12
  #1128 (permalink)  
 
Join Date: Jun 2019
Location: Denmark
Posts: 0
Likes: 0
Received 0 Likes on 0 Posts
In terms of international flying I meant.
Ragnor is offline  
Old 1st May 2020, 00:14
  #1129 (permalink)  
 
Join Date: Dec 2006
Location: Whanganui, NZ
Posts: 284
Received 6 Likes on 5 Posts
Originally Posted by VH-ABC
Trans Tasman is the best we can hope for?
Yes, until there's a vaccine: so until March - June 2021
Maybe some of the Pacific Islands might come in - Cooks Is, Tonga, Western Samoa, possibly Fiji
:-(
kiwi grey is offline  
Old 1st May 2020, 07:12
  #1130 (permalink)  
 
Join Date: Jul 2013
Location: Hong Kong
Posts: 5
Likes: 0
Received 0 Likes on 0 Posts
There is another way to look at it. Air NZ was offered a rather large loan recently, to help with their immediate cashflow needs and 'keep the show on the road'. What may not be advertised is the interest rate - well over 8% I was told by an Air NZ mate.....!!! So if the Australian Govt. was fairly confident that VA will survive post Covid-19, this would be an opportunity for them to make money (borrow for 3-4%, or less....lend out at 8%+) and give an important lifeline too.
Mendi Matt is offline  
Old 1st May 2020, 09:04
  #1131 (permalink)  
 
Join Date: Jun 2010
Location: Sydney
Age: 41
Posts: 483
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by Mendi Matt
There is another way to look at it. Air NZ was offered a rather large loan recently, to help with their immediate cashflow needs and 'keep the show on the road'. What may not be advertised is the interest rate - well over 8% I was told by an Air NZ mate.....!!! So if the Australian Govt. was fairly confident that VA will survive post Covid-19, this would be an opportunity for them to make money (borrow for 3-4%, or less....lend out at 8%+) and give an important lifeline too.
Which loan do they pay back first? The Australian government loan, or the $7b they owe to creditors already?

Any money to bailout Virgin is equivalent to pissing into the wind.
normanton is offline  
Old 1st May 2020, 11:10
  #1132 (permalink)  
 
Join Date: Jul 2007
Location: BAO
Posts: 0
Likes: 0
Received 0 Likes on 0 Posts
Stuff-It, shall have a crack here...................

Anybody, got a post COVID-19 market quote on 'what' a slightly used B738 maybe 'worth', at book value/at this time................., $100m/per head x 70 odd of 'em........... that, 'do-able' ....????

Ta/Rgds
S28- BE
Section28- BE is offline  
Old 1st May 2020, 14:07
  #1133 (permalink)  
 
Join Date: Aug 2006
Location: The Cesspit
Posts: 401
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by Mendi Matt
There is another way to look at it. Air NZ was offered a rather large loan recently, to help with their immediate cashflow needs and 'keep the show on the road'. What may not be advertised is the interest rate - well over 8% I was told by an Air NZ mate.....!!! So if the Australian Govt. was fairly confident that VA will survive post Covid-19, this would be an opportunity for them to make money (borrow for 3-4%, or less....lend out at 8%+) and give an important lifeline too.
In the current climate that’s actually very reasonable.

VAH’s last bond raising in 2019 was at about 8.5%. In the early days of COVID-19 it was trading at a yield of around 20%. I’d imagine a bond raising for any airline on the open market now would be well north of that.

If ANZ secured a loan at around 8% from the government then the airline got a steal and the taxpayer got a very questionable investment.
That being said, Air New Zealand is a net importer of foreign tourist dollars and subsidizing their operation is to the taxpayers’ advantage. It’s questionable whether either VA or QF fly as many tourist dollars into Australia as they fly out.
Progress Wanchai is offline  
Old 1st May 2020, 20:21
  #1134 (permalink)  
 
Join Date: Apr 2011
Location: aus
Posts: 1,351
Likes: 0
Received 115 Likes on 73 Posts
Originally Posted by Section28- BE
Stuff-It, shall have a crack here...................

Anybody, got a post COVID-19 market quote on 'what' a slightly used B738 maybe 'worth', at book value/at this time................., $100m/per head x 70 odd of 'em........... that, 'do-able' ....????

Ta/Rgds
S28- BE
Suspect a lot less than that. Eitihad sold 38 planes for 1billion 22 A330 and 16 777's which they immediately leased back. the a330's weren't worth much but the 777's still have life.

Also the a 737 purchased from southwest for conversion to fire bombers were 20-25 million each
rattman is online now  
Old 1st May 2020, 21:42
  #1135 (permalink)  
 
Join Date: Jan 2019
Location: Australia
Posts: 283
Received 48 Likes on 23 Posts
Second hand 737s would be almost worthless at the moment. Given the clear surplus of aircraft around the world even after COVID19, and the 100s of Max aircraft sitting on the ground - who is going to be buying up these old 73s?

It is the one thing in VAs favour when dealing with the leasing companies - if those companies want to see any cash, they are going to have to come to the table with a good deal. It may be the saving grace for the A330 too - the moronic leases on those aircraft may come back to be something far more reasonable.
Colonel_Klink is offline  
Old 1st May 2020, 22:06
  #1136 (permalink)  
 
Join Date: Jun 2019
Location: Denmark
Posts: 0
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by Colonel_Klink
Second hand 737s would be almost worthless at the moment. Given the clear surplus of aircraft around the world even after COVID19, and the 100s of Max aircraft sitting on the ground - who is going to be buying up these old 73s?

It is the one thing in VAs favour when dealing with the leasing companies - if those companies want to see any cash, they are going to have to come to the table with a good deal. It may be the saving grace for the A330 too - the moronic leases on those aircraft may come back to be something far more reasonable.
Everyone seems to say the leasing companies will bow down to what ever VA want to pay in cost and if they don't well come take your AC back, if it were that simple wouldn't more companies go into administration more often to clear their debt to a manageable level?.

If by a miracle Virgin actually survive would any further growth be inhibited by leasing companies telling them to jump as they owe them millions for the last failed venture then possibly have to stump up cash for AC which they wouldn't be able to?

Leasing companies won't just give them deals to not have them sitting in their backyard. I'm sure they would rather them sitting in their backyard then companies using them and always late or never paying up.

Ragnor is offline  
Old 1st May 2020, 23:24
  #1137 (permalink)  
 
Join Date: Jul 2007
Location: BAO
Posts: 0
Likes: 0
Received 0 Likes on 0 Posts
ABC News overview article 30/04/20: https://www.abc.net.au/news/2020-04-...ation/12198130

Extract here:

"On April 23, Deloitte listed the carrier's debts as including:
  • Twenty-six secured lenders who are owed about $2.3 billion
  • Unsecured bondholders owed about $2 billion
  • Fifty aircraft lessors owed about $1.9 billion
  • More than 9,000 employees owed $451 million
  • More than 1,000 trade creditors owed about $167 million
  • Eighty-one landlords owed about $71 million
Virgin has about 144 aircraft and about half of them are under lease. These are mostly 737-800s, but also includes their A330s and ATR72s.

Deloitte has asked lessors for waivers over lease payments while it works through the voluntary administration process."
It would 'seem' (with what is reported via news outlets) that, the whole show (circa $7B) would need to be swung-off what value can be leveraged out of 70 odd B738's and the 'residual' value of the 'Business/Network'........???

As far as, the options that shall be presented at the 2nd Creditors Mtg of the 'process'- e.g. Liquidation vrs x/cents in the dollar..........

Rgds
S28- BE
Section28- BE is offline  
Old 2nd May 2020, 04:35
  #1138 (permalink)  
 
Join Date: Sep 2002
Location: Australia
Posts: 38
Likes: 0
Received 0 Likes on 0 Posts
Lots of talk here about the aircraft lease costs being reduced, because leasing companies have nowhere else for the aircraft to go.

What about pilot terms and conditions? Where else can pilots go at this time?
Ichiban is offline  
Old 2nd May 2020, 04:38
  #1139 (permalink)  
 
Join Date: Jan 2019
Location: Australia
Posts: 283
Received 48 Likes on 23 Posts
Originally Posted by Ichiban
Lots of talk here about the aircraft lease costs being reduced, because leasing companies have nowhere else for the aircraft to go.

What about pilot terms and conditions? Where else can pilots go at this time?
I don’t know too many pilots that aren’t considering that - and the harsh reality is that pilots will need to take a pay cut, especially if there is hope to avoid/reduce any further pilot redundancies.

I know I would certainly take a pay hit to secure my own, and my fellow colleagues, futures.
Colonel_Klink is offline  
Old 2nd May 2020, 05:13
  #1140 (permalink)  
 
Join Date: Jan 2006
Location: Sydney Australia
Posts: 2,317
Received 19 Likes on 10 Posts
Originally Posted by Colonel_Klink
I don’t know too many pilots that aren’t considering that - and the harsh reality is that pilots will need to take a pay cut, especially if there is hope to avoid/reduce any further pilot redundancies.

I know I would certainly take a pay hit to secure my own, and my fellow colleagues, futures.
Very noble Colonel Klink, and probably what will be required, and more.

Unfortunately if there is a VA Mk2 at all, there will be a significant number of pilots who will be “Surplus to requirements”, as a smiling HR type told me just prior to my retrenchment some years ago! It’s even probable that the entire current pilot group will have to compete for what positions there are. If that happens it will literally be every one for themselves.

It won’t be pretty.
KRUSTY 34 is offline  

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service

Copyright © 2024 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.