Government Loan to Virgin Australia

[TimmyTee]

(for the unbiased out there, maybe first take a look at this Anthony Klan's Twitter and decide for yourself if "his reporting is usually unbiased"...
https://mobile.twitter.com/Anthony_K...Ctwgr%5Eauthor

The bloke had never tweeted about Virgin (or Qantas) up until a few weeks ago and then went full feral in his attacks on Virgin. Heroically "calling out" Virgin bots, bravely labelling Virgin the most corrupt company in the world.. There's nothing there that shows balance or "unbiased" reporting.
Something changed quite literally over night for him..
Couldn't have been his bank account could it?

[Karunch]

Originally Posted by krismiler

the government would want a counter balance to any demands from the QF unions for excessive pay increases from what would be an all powerful monopoly airline, capable of bringing Australia to a stand still if its demands weren't met . Divide and rule.

It takes nothing more than the stroke of a pen & foreign AOC's will allow domestic sectors. No loans or bailout packages required. Capacity & competition restored. You might even find Alan backing a VA support package if that came about. Strong parallels to car manufacturing in Australia.

Australians have shown a willingness to travel on low cost, foreign carriers of questionable safety for some time now. Most of those carriers would love to have a bite at our relatively high yield domestic market.

[ampclamp]

TimmyTee, your post maybe correct in what you say in him just launching into Virgin now and perhaps has an interest, we don't know, but is anything he has written about them not factual?

You can criticize his motives but you would be more effective in proving his information to be wrong.

I'm in favour of keeping VA people employed , but it's up to the major shareholders first and foremost to stump up the cash.

[Mach E Avelli]

In my junk email this morning was this incredible offer! Not quite up there with a Nigerian scam, but surely sailing close to the wind to be encouraging any expenditure on travel at the moment? I suppose the odd mug will see this as a deal not to be missed...

Dear Velocity member,



We want to let you know about some important changes we’re making to Velocity Global Wallet® from 4 May 2020 under our new Product Disclosure Statement (PDS).



* We’re reducing fees you pay when using your Velocity Global Wallet® card, including removing the 2.25% currency conversion fee2 (foreign exchange rates apply), supplementary card issue fee, and the $1.95 ATM transaction fee.

* You’ll earn 1 Velocity Point for every AU$4 spent in Australia on qualifying purchases.1

* No more ATM transaction fees when withdrawing cash in Australia and overseas.3

* We’re introducing a new load method via VISA/ Mastercard which will have a 0% load fee when loading into a foreign currency wallet, or 0.5% when loading into your AUD.



The updated PDS also includes the following important changes:







* Your Overseas earn rate remains the same, 2 Velocity Points for every AU$1 spent, on Qualifying Purchases.

* You will now earn 1 Velocity Point for every AU$4 spent, on Qualifying Purchases in Australia.1

* The Inactivity Fee will change to 0.5% of the Available Balance, with a minimum of AU$1 for accounts that have been inactive for 12 months.

* BPAY will still be FREE when you load into a Foreign Currency Wallet, and will have a fee of 0.5% of Funds Credited when you load into your Australian Wallet, with a minimum of AU$1 per Load.

* We’ve updated section 17.5 to indicate the assumptions you might be liable for losses arising from Unauthorised Transaction if you contributed to those losses through fraud, theft, illicit use or by inappropriate use of the card and PIN. These assumptions only apply to a very small number of transactions, losses will still be covered for most customers.

* We’ve updated the definition of Qualifying Purchases that allow you to earn Velocity Points, and included a section to explain you might stop earning Velocity Points if you use the product in a fraudulent or illicit way.

* We’ve updated the section where we describe what happens with Card Inactivity and Account Closure

[B772]

Lifetime Virgin Australia Lounge Memberships for sale; cheap. Best offer accepted.

[John Citizen]

Virgin seeks statement of confidence

Chief executive Paul Scurrah is seeking “a statement of confidence from government as quickly as we can, in much the same as they would do for a bank”.

[ampclamp]

Has anyone heard or read anything from the major shareholders and their position on this? Are they just sitting back hoping we will let them of the hook before making a decision?

I doubt the government is going to blink.

Would the governments of Singapore, Abu Dhabi or China entertain extending such assistance for any foreign backed airline operating in their jurisdictions?

I think we know the answer to that.

I want to see VA jobs saved, been there with Ansett. It's horrible, but I just cannot see our government being on the hook for 1.4 billion without getting commitment from the overseas interests first.

[Paragraph377]

Originally Posted by John Citizen

Virgin seeks statement of confidence

In return, can Scurrah offer a ‘statement of confidence’ from VA that in return for financial assistance from the Government VA would prioritise looking after its staff while also boning the EM team and hopeless Board? It’s a two-way street and Scurrah would have to bring something to the table, something that is detailed and outlines how the legacy issues that have lead to the current malaise have been put to pasture and will not return.

[krismiler]

It takes nothing more than the stroke of a pen & foreign AOC's will allow domestic sectors.

Not really a practical solution when multiple frequencies between city pairs are required, many of the foreign airlines come in off a long haul flight with a widebody aircraft which needs to be filled and have a crew change. In 1989 even with foreign aircraft based here, and using the airforce they were nowhere near replicating the old network.

AirAsia and Lion Air have set up subsidiary airlines throughout Asia, Australia would be a nice fit into their network, possibly through a Darwin hub which would allow an Australian domestic operation to feed in passengers and allow one stop connections from BNE/SYD/MEL to Asian cities without having to operate A330/B787s ie the Jetstar/Jetstar Asia model.

CAPA figure show the Lion group having 310 aircraft and the AirAsia group having 237 aircraft and both have large future orders. Virgin are on around 100 at the moment. Kicking off a serious operation in Australia with around 40 aircraft would certainly be within Lion Air's capability if Virgin goes under.

Any subsidiary within Australia would have to employ Australian staff and be subject to CASA oversight. The 2011 grounding of Tiger Australia would discourage anyone thinking of cutting corners for quick profits. Whilst Lion Air don't fly to Australia at present, its subsidiaries Malindo and Batik do, however Australian government employees are banned from using them. There could be problems selling connecting tickets if the first half of the journey was subject to an Aussie AOC and the next half on a foreign AOC not meeting CASA standards. Possibly, popular destinations such as Bali could be operated by the Australian subsidiary instead.

Qantas won't be allowed a monopoly, even if it gets nationalised and fares are regulated by the government, the unions would be in too strong a position if they could simply ground the whole country if their demands weren't met. There must be an alternative, either bail out Virgin or allow another operator to quickly fill the gap if they go under.

[non_state_actor]

In return, can Scurrah offer a ‘statement of confidence’ from VA that in return for financial assistance from the Government VA would prioritise looking after its staff while also boning the EM team and hopeless Board? It’s a two-way street and Scurrah would have to bring something to the table, something that is detailed and outlines how the legacy issues that have lead to the current malaise have been put to pasture and will not return.

Most of that can't happen as the board is full of representatives of foreign airlines, who have a right to be there. The EM who got the airline into this mess have all left with millions of dollars in their bank accounts already. All he can offer is to cut the entire widebody operation and probably get pay concessions from the staff and offer some sort of lean domestic operation. I doubt 'looking after' anyone will be on the agenda, you will be thankful you have a job.

The only other real alternative for the government is to let Virgin go broke and offer AOC waivers for a foreign entrant. Failing that it will be a Qantas monopoly for a long time to come, given the current state of the world aviation industry.

[Potsie Weber]

Air Asia? They are in a horrible position, unprofitable even before corona, bleeding cash, unable to pay leases, very few assets to sell, under investigation for corruption (Airbus bribes), and offering ridiculous fares like $181 for unlimited 12mths travel to Malaysian based loyalty members in an attempt to get some cash.

https://www.traveller.com.au/airasia...navirus-h1m73n

No doubt Lion group is under the same pressure with a huge fleet of leased aircraft with very limited ability to pay, and limited assets to borrow against.

The same goes for low cost airlines all around the world that have generally operated on tight margins with everything leased.

I don’t think it will be long before leasing companies start repossessing huge numbers of aircraft due to the inability of airlines to pay leases or even ensure aircraft are stored and maintained appropriately.

[machtuk]

"IF" VA got the $1.4blll loan under whatever terms how will this fix what was already a floundering Airline pre all this hysteria and fear? Virgins where bleeding $$$$ & they where good at it, the black hole in the VA bucket is still there and growing bigger! Personally I can't see them coming back from this. RIP -(

Its a brave new world out there coming!

[normanton]

I keep coming back to the same question. If they aren't profitable now, how will they be profitable post-COVID19 with an extra $1.4b in debt? They can't, and they won't. Fold the company now so that workers get what they are entitled to, and hopefully the administrators can save something.

I don't follow the argument of "they were going to be profitable in x years". Yeah! Just like the governments budget will be back in surplus in x years! Look how well that always turns out.

Scurrah is clinging at straws here, and it's his job so fair enough. But the Australian tax payer shouldn't be bailing out a foreign (government) owned company when the major (foreign) shareholders are coming up with nothing.

[B772]

Scurrah appears to be in panic mode. History will show he did little to restructure since he was appointed over 12 months ago. As little as 3 weeks ago he did not understand the seriousness of the situation. In one of my posts I referred to an announcement he made as being a weak effort. Now he appears to be shoring up his position as the collapse of VA will not look good on his C.V for future employment. A little like Gary Toomey. A rooster one day, feather duster the next.

If Scurrah thinks he can get a letter of comfort or a statement of confidence from the Government he is dreaming. Even HostPlus Superannuation will not get anything from Canberra. As I have indicated previously it will be a slow uncomfortable wind down unless the current owners throw more money in the bottomless pit. I believe they will walk away from VA.

[DanV2]

Originally Posted by B772

Scurrah appears to be in panic mode. History will show he did little to restructure since he was appointed over 12 months ago. As little as 3 weeks ago he did not understand the seriousness of the situation. In one of my posts I referred to an announcement he made as being a weak effort. Now he appears to be shoring up his position as the collapse of VA will not look good on his C.V for future employment. A little like Gary Toomey. A rooster one day, feather duster the next.

If Scurrah thinks he can get a letter of comfort or a statement of confidence from the Government he is dreaming. Even HostPlus Superannuation will not get anything from Canberra. As I have indicated previously it will be a slow uncomfortable wind down unless the current owners throw more money in the bottomless pit. I believe they will walk away from VA.

Tell that to a number of "SQ fanboys" on Executive Traveller (aka AusBT) that.. a number of them are still holding onto the ol 'SQ will rescue VA !!111!" sthick, despite the numerous 'SQ will rescue VA' articles over the past five years fizzling out as "fake news".

To be fair to those fanboys, SIA also did have the opportunities to 'buy out' VA in the past, notably during the NZ exit, SIA simply chose not to.
I suspect that would've paid off for SIA in the long term rather than mindlessly buy a long-term basketcase riddled with billions in debt.

[Turnleft080]

Quite frankly I hope all airlines survive, though I hope all the airports drop dead. Atrocious leasing costs, landing fees etc. Funny all car parking is free though.
Everyone on this site should be attacking these hypocrites first not the airlines.

[Paragraph377]

Originally Posted by Turnleft080

Quite frankly I hope all airlines survive, though I hope all the airports drop dead. Atrocious leasing costs, landing fees etc. Funny all car parking is free though.
Everyone on this site should be attacking these hypocrites first not the airlines.

Oh c’mon, corporate greed is everywhere. The airlines gouge specific airports (regionals) and the airports (mainline) gouge the airlines. Its double dutch. Everyone is out to make a quid when the times are good, and when times are bad they cry that they are being ripped off.

Make no mistake, Scurrah will go, and then pop up again somewhere else and/or on a couple of Boards. But he screws around for 12 months. Virgins position was dire when the little Italian jumped ship. Scurrah has played tiddly winks when he should have ripped the guts out of the center of the business to get it back on track.

Staff should be rightly pissed at how he has spent precious dollars on foolish advertisements trying to shore up public sentiment. Problem is, Virgin hasn’t been hard done by Qantas, it’s been hard done by its own Board and Executives, and now the chickens have come home to roost. It is almost criminal.

[krismiler]

In the Uk, Virgin Atlantic are also seeking a government bail out with no sign as yet that it's likely to be forthcoming, most airlines will be on the ropes by the end of May anyway and with the current financial situation, no government will be able to bail out every company in every sector of the economy. Delaying aid forces shareholders to contribute their money first and undertake unpopular restructuring to cut costs, governments will step in at the last minute and aid those still standing so that essential services can be maintained.

British Airways will probably come through this though it will need help and possibly even be nationalised. The difference compared to Qantas is that air travel within the UK isn't vitally important. The country is small, densely populated and has an extensive road and rail network. The UK is a major hub with multiple foreign airlines flying in so there are many alternatives available for those wanting to travel internationally. KLM fly to more UK airports than British Airways do, and enable connections through Amsterdam.

Australia is as dependent on air travel as the USA which has given aid to it's major airlines, The Americans are no doubt concerned about a monopoly if two of the big three go under and can't be favouring one a single carrier.

[B772]

Paul Scurrah will not be happy to hear EL AL who are on the verge of collapse have been told by the Israeli Finance Ministry there request for $700M to stay afloat has been rejected. Anyone who had less than 5 years of service regardless of their position was laid off last week.

[The Bullwinkle]

Qantas won't be allowed a monopoly, even if it gets nationalised and fares are regulated by the government, the unions would be in too strong a position if they could simply ground the whole country if their demands weren't met.

Don't you mean the Irish despot?