Government Loan to Virgin Australia
It doesn’t mean a fair argument can’t take place around whether a business which has lost money for 7 straight years deserves tax payer support.
I suspect some support will come, but it will allow a Virgin barely recognisable to the one we had.
Join Date: Apr 2010
Location: Asia
Posts: 1,030
Likes: 0
Received 0 Likes
on
0 Posts
The concern is, even if they take a large loan of Canberra, how the heck will they ever get out of their debt situation?
It will take the rest of this decade to get rid all of the debt.
If they file for admin, who picks up the debt? Clearly have no assets to pay for much. It seems a lot of banks and lenders will be in the red but who pays for it?
It will take the rest of this decade to get rid all of the debt.
If they file for admin, who picks up the debt? Clearly have no assets to pay for much. It seems a lot of banks and lenders will be in the red but who pays for it?
Join Date: Sep 2002
Location: Australia
Posts: 751
Likes: 0
Received 0 Likes
on
0 Posts
For all you "Angels" out there, Virgin was in the process of rectifying the atrocities of the last decade and were making many changes which were taking the company in the right direction.
Now, a "Black Swan" event comes along which threatens not just Virgin but indeed every airline in the world, your beloved QANTAS included, and all you want to do is kick a man when he's down.
I'm sure the Leprechaun is vey proud of your actions but you're actually quite disgusting!
Now, a "Black Swan" event comes along which threatens not just Virgin but indeed every airline in the world, your beloved QANTAS included, and all you want to do is kick a man when he's down.
I'm sure the Leprechaun is vey proud of your actions but you're actually quite disgusting!
Join Date: Jun 2001
Location: home with mum and the kids
Posts: 176
Likes: 0
Received 0 Likes
on
0 Posts
Neither Virgin OR Qantas should be given any more government assistance IMHO. Why should government prop up shareholders?
If Qantas is the last one standing, then so be it. If they price gouge, then by virtue of their margins they invite competition. Government can assist here by guaranteeing gates, slots tax concessions etc. They can also threaten / allow or even assist with cabotage. This was done post AN collapse with the likes of United operating Sydney - Melbourne. Qantas are terrified of cabotage, especially on the international front.
There are times when a monopoly is actually good. Government can regulate to protect consumers and the economy.
If Qantas fails, it will not be the end of the world. Again, foreign carriers can be asked to step up (US Airlines?) at least until such time as a new local airline emerges. No airline is too important to fail. In fact, the list of prominent failures is long.
Ansett’s collapse demonstrated, Australia’s second carrier simply does not feature. In fact, there will be some in Government and opposition actively pushing for a VA collapse. In AN’s case it was the Transport minister and the Prime Ministers Chief of Staff.
If Qantas is the last one standing, then so be it. If they price gouge, then by virtue of their margins they invite competition. Government can assist here by guaranteeing gates, slots tax concessions etc. They can also threaten / allow or even assist with cabotage. This was done post AN collapse with the likes of United operating Sydney - Melbourne. Qantas are terrified of cabotage, especially on the international front.
There are times when a monopoly is actually good. Government can regulate to protect consumers and the economy.
If Qantas fails, it will not be the end of the world. Again, foreign carriers can be asked to step up (US Airlines?) at least until such time as a new local airline emerges. No airline is too important to fail. In fact, the list of prominent failures is long.
Ansett’s collapse demonstrated, Australia’s second carrier simply does not feature. In fact, there will be some in Government and opposition actively pushing for a VA collapse. In AN’s case it was the Transport minister and the Prime Ministers Chief of Staff.
Join Date: Jan 2010
Location: Eagles Nest
Posts: 485
Likes: 0
Received 0 Likes
on
0 Posts
What happens if Australia comes out of this first . American Airlines might be 6-12 months behind in recovery . Same for Asian countries . Government encourage Australians to holiday domestically . They need a airline industry that is ready to go now ! Not a start up . Not rely on international carriers . For $1.4B you got that airline , no state government subsidies , no airport freebies for the new guy no federal support for a brand new entrant . Just take the covers off and check the oil and kick the tyres and get those holiday makers into domestic resorts , get the country moving again ASAP ?
When Alan Joyce grounded Qantas back whenever, the first person to drop me a note was a Virgin friend who'd been through the dispute, an overseas stint with a very young family and then the collapse of Ansett. It was a kind, considerate thought from someone I've known for years but only catch up with occasionally.
Now once again the airline world is in turmoil and I think you'll find that, apart from a few posters here on Pprune (and on the whole that's not many QF staff), most Qantas people want to see the Virgin staff retain a job and an employer. Many of us have friends & family who are Virgin staff.
The few on here that openly appear to want to see Virgin collapse are just that……a few.
Now once again the airline world is in turmoil and I think you'll find that, apart from a few posters here on Pprune (and on the whole that's not many QF staff), most Qantas people want to see the Virgin staff retain a job and an employer. Many of us have friends & family who are Virgin staff.
The few on here that openly appear to want to see Virgin collapse are just that……a few.
Join Date: Sep 2002
Location: Australia
Posts: 751
Likes: 0
Received 0 Likes
on
0 Posts
It's not about WANTING to see Virgin collapse.
Joyce has an absolute bloodlust for the collapse of Virgin!
Well, so what? It still doesn't dismiss the poor management over the years and I was there for it. What exactly would you like AJ or anyone to do?
I think the majority of people at VA don't bare any ill wishes to the people over at Q
Join Date: Nov 2018
Location: Maningrida
Posts: 38
Likes: 0
Received 0 Likes
on
0 Posts
Businesses will come and go with the economic cycle. There will be another carrier step in to replace them. It’s my hope that everyone who loses-out can be re-employed ASAP.
Again, it’s not the entity that matters. It’s the airlines employees and their families. Please reach out to your colleagues in the industry to share grief. Don’t take it out on your family. In their eyes, you’re a hero. Whether you fly for VA, QF, JQ and whatever Rex is (sorry I don’t know), your well-being beats the colour, size or shape of your aeroplane.
all the best.
Any company going under has a knock on effect, you know what happens when the major employer in a small town goes broke, everyone is affected. It’s not just Virgin, it’s their maintenance providers, fuel and catering suppliers, advertising agency, IT system managers, accounts, landlords of their office buildings etc etc etc.
The country will be in survival mode for a long time to come. Vital sectors will need to be preserved to provide the framework to support the recovery. A skeleton critical mass needs to be kept in place to develop around.
There will be very little spare money as tax revenues will plummet and welfare demands will soar.
An airline industry is critical to Australia given its isolation and vast domestic distances. The bankruptcy of Sabena wasn’t critical to Belgium as there were no domestic flights and everywhere was easily accessible by road and rail. International destinations were served by other airlines flying into Belgium or easy connections through a multitude of nearby hubs such as Amsterdam or Paris.
Even the shortest routes of Australia’s economic golden triangle, Sydney/Melbourne/Brisbane have no practical alternative to flying and having large areas of the country cut off wouldn’t be acceptable.
My take is that there will be a small and highly conditional bail out of Virgin which would enable it to retain a limited domestic network on critical or previously profitable routes. Employee and fleet numbers will be slashed, international and wide body operations curtailed. Staff will be handed new contracts on a “take it or leave it” basis. The company will revert back to where it was around the time Ansett went under.
The country will be in survival mode for a long time to come. Vital sectors will need to be preserved to provide the framework to support the recovery. A skeleton critical mass needs to be kept in place to develop around.
There will be very little spare money as tax revenues will plummet and welfare demands will soar.
An airline industry is critical to Australia given its isolation and vast domestic distances. The bankruptcy of Sabena wasn’t critical to Belgium as there were no domestic flights and everywhere was easily accessible by road and rail. International destinations were served by other airlines flying into Belgium or easy connections through a multitude of nearby hubs such as Amsterdam or Paris.
Even the shortest routes of Australia’s economic golden triangle, Sydney/Melbourne/Brisbane have no practical alternative to flying and having large areas of the country cut off wouldn’t be acceptable.
My take is that there will be a small and highly conditional bail out of Virgin which would enable it to retain a limited domestic network on critical or previously profitable routes. Employee and fleet numbers will be slashed, international and wide body operations curtailed. Staff will be handed new contracts on a “take it or leave it” basis. The company will revert back to where it was around the time Ansett went under.
How nice. But one company has performed strongly and the other hasn't.
