Government Loan to Virgin Australia
Join Date: Apr 2010
Location: Asia
Posts: 1,030
Likes: 0
Received 0 Likes
on
0 Posts
I’m having a bit of trouble getting past the fact that governments have intervened in the market in a rapid and unprecedented way. I don’t see how there can be a reasonable expectation that VA should have anticipated and prepared for an event of such magnitude. Are there any examples of a government, institutions, businesses or companies that have squirrelled away sufficient cash reserves to survive 6 months of no income.
.
.
Not only are they $5b in debt, they have nothing left to secure cash against. They have exhausted every financial option available. Everything is maxed out basically.
Even pre Corona, how the heck they were going to finance the upcoming MAX order was anyone’s guess.
Let alone repay, what, $7b of debt? Post the virus.
How on earth do you get out of $7b of debt, from such a small revenue and poor profit history? Anyone?
You feel there is so much more to unfold. Chinese government ownership you feel is so unlikely because it’ll be too hot for the government. So then what? Busy weekend for the spinners, power brokers and back room dealers.
https://www.dailymail.co.uk/news/art...-bail-out.html
PUBLISHED: 16:50 BST, 17 April 2020 | UPDATED: 17:21 BST, 17 April 2020
Chinese airlines are considering buying embattled Virgin Australia after the Morrison government refused to bail out the struggling airline.
China Southern Airlines, China East Airlines and Air China are all in discussions about purchasing the carrier in a last-minute takeover in a bid to stop its 'catastrophic' collapse.
Sources told the Courier Mail that the Chinese government-owned airlines were yet to make a formal offer.
However any offer could provide a much-needed lifeline to Virgin Australia and the market-led cash solution the Morrison government urged them to find.
Chinese-owned airlines are considering purchasing Virgin Australia (pictured) to stop the company from collapsing amid the coronavirus crisis Virgin Australia wanted the Federal Government to hand over $1.4billion to save them from collapse but the money has not been forthcoming.
A joint approach from two Chinese carriers could see the foreign-owned Virgin Australia Group prevented from falling into voluntary administration.
The move would likely require approval from the Foreign Investment Review Board before a solution could be reached.
It is believed Australians would lose millions of Velocity Points and flight credits if the company went into administration.
On Friday night it was revealed that the Queensland government will offer the troubled airline $200million towards a bailout in the hope that other states will follow suit.
The company's corporate headquarters are located in Brisbane but the head office and Velocity Frequent Flyer businesses may potentially move to Melbourne.
The managing director of the Virgin Australia Group, Paul Scurrah, on Wednesday refused to speculate about voluntary administration.
A joint approach from two Chinese carriers (pictured) could save the struggling company On Thursday Virgin Australia asked the ASX to suspend its shares for seven days and revealed it was in confidential talks to save the company from collapse.
'These discussions have continued over the last two days including discussions which remain confidential and are incomplete,' Virgin said in a statement to the ASX.
'The company is not presently in a position to make an announcement to the market with respect to these matters.'
Virgin Australia has already suspended all but one domestic route, stood down 8,000 workers and had its credit rating downgraded.
The Federal Opposition called on the government to provide financial support for Virgin Australia yesterday.
Labor Senator for Queensland, Murray Watt, said it was 'an issue of national interest' to keep Virgin Australia afloat.
Senator Watt said the government should take an equity stake in Virgin Australia and that the airline was a 'proud Queensland company' essential to the state's tourism.
'Maintaining two airlines is critical for a functioning tourism industry and jobs,' he said.
Prime Minister Scott Morrison previously said any public funding for aviation would be spread across the entire sector.
The Morrison Government have refused Virgin Australia's plea for a $1.4billion bail out
Now the CHINESE are considering buying Virgin Australia after the Morrison government refused to bail out embattled airline
- Chinese airlines are considering purchasing the struggling Virgin Australia
- Chinese-owned carriers are in talks about buying the Queensland-based airline
- The Morrison government refused to give the company a $1.4billion bailout
- A joint approach from two Chinese carriers could save the airline from collapse
PUBLISHED: 16:50 BST, 17 April 2020 | UPDATED: 17:21 BST, 17 April 2020
Chinese airlines are considering buying embattled Virgin Australia after the Morrison government refused to bail out the struggling airline.
China Southern Airlines, China East Airlines and Air China are all in discussions about purchasing the carrier in a last-minute takeover in a bid to stop its 'catastrophic' collapse.
Sources told the Courier Mail that the Chinese government-owned airlines were yet to make a formal offer.
However any offer could provide a much-needed lifeline to Virgin Australia and the market-led cash solution the Morrison government urged them to find.
Chinese-owned airlines are considering purchasing Virgin Australia (pictured) to stop the company from collapsing amid the coronavirus crisis Virgin Australia wanted the Federal Government to hand over $1.4billion to save them from collapse but the money has not been forthcoming.
A joint approach from two Chinese carriers could see the foreign-owned Virgin Australia Group prevented from falling into voluntary administration.
The move would likely require approval from the Foreign Investment Review Board before a solution could be reached.
It is believed Australians would lose millions of Velocity Points and flight credits if the company went into administration.
On Friday night it was revealed that the Queensland government will offer the troubled airline $200million towards a bailout in the hope that other states will follow suit.
The company's corporate headquarters are located in Brisbane but the head office and Velocity Frequent Flyer businesses may potentially move to Melbourne.
The managing director of the Virgin Australia Group, Paul Scurrah, on Wednesday refused to speculate about voluntary administration.
A joint approach from two Chinese carriers (pictured) could save the struggling company On Thursday Virgin Australia asked the ASX to suspend its shares for seven days and revealed it was in confidential talks to save the company from collapse.
'These discussions have continued over the last two days including discussions which remain confidential and are incomplete,' Virgin said in a statement to the ASX.
'The company is not presently in a position to make an announcement to the market with respect to these matters.'
Virgin Australia has already suspended all but one domestic route, stood down 8,000 workers and had its credit rating downgraded.
The Federal Opposition called on the government to provide financial support for Virgin Australia yesterday.
Labor Senator for Queensland, Murray Watt, said it was 'an issue of national interest' to keep Virgin Australia afloat.
Senator Watt said the government should take an equity stake in Virgin Australia and that the airline was a 'proud Queensland company' essential to the state's tourism.
'Maintaining two airlines is critical for a functioning tourism industry and jobs,' he said.
Prime Minister Scott Morrison previously said any public funding for aviation would be spread across the entire sector.
The Morrison Government have refused Virgin Australia's plea for a $1.4billion bail out
Join Date: Feb 2019
Location: Sydney
Posts: 46
Likes: 0
Received 0 Likes
on
0 Posts
$200M is a drop in the bucket compared to the amount VA owes its creditors.
So $200M might keep them going for another couple of months, maybe, then it goes into administration anyway. What happens to the $200M of taxpayers money?
Is that incompetent twit running QLD going to be held accountable for the money she threw away knowing it was almost certainly going to be lost? She’d have been better off running down to the casino and putting $200M on black. At least there would have almost been a 50% chance of getting money back.
So $200M might keep them going for another couple of months, maybe, then it goes into administration anyway. What happens to the $200M of taxpayers money?
Is that incompetent twit running QLD going to be held accountable for the money she threw away knowing it was almost certainly going to be lost? She’d have been better off running down to the casino and putting $200M on black. At least there would have almost been a 50% chance of getting money back.
I’m glad I’m not in the tourist industry. Qantas and what was left of Virgin will crush it in future. Same goes for anyone trying to operate an international business outside Sydney. Qantas will suck the lifeblood out of the country.
”Market Forces” is Federal treasury code for “there is only room for one airline in Australia and its name starts with Q”.
”Market Forces” is Federal treasury code for “there is only room for one airline in Australia and its name starts with Q”.
$200M is a drop in the bucket compared to the amount VA owes its creditors.
So $200M might keep them going for another couple of months, maybe, then it goes into administration anyway. What happens to the $200M of taxpayers money?
Is that incompetent twit running QLD going to be held accountable for the money she threw away knowing it was almost certainly going to be lost? She’d have been better off running down to the casino and putting $200M on black. At least there would have almost been a 50% chance of getting money back.
So $200M might keep them going for another couple of months, maybe, then it goes into administration anyway. What happens to the $200M of taxpayers money?
Is that incompetent twit running QLD going to be held accountable for the money she threw away knowing it was almost certainly going to be lost? She’d have been better off running down to the casino and putting $200M on black. At least there would have almost been a 50% chance of getting money back.
It’s probably more the point, if they did not blow and waste so much cash in the last decade, which in return just blew out any cost base advantage they once had over the rival, they could have tomorrow, gone to a bank and asked for $2 billon and secure it against aircraft.
Not only are they $5b in debt, they have nothing left to secure cash against. They have exhausted every financial option available. Everything is maxed out basically.
Even pre Corona, how the heck they were going to finance the upcoming MAX order was anyone’s guess.
Let alone repay, what, $7b of debt? Post the virus.
How on earth do you get out of $7b of debt, from such a small revenue and poor profit history? Anyone?
Not only are they $5b in debt, they have nothing left to secure cash against. They have exhausted every financial option available. Everything is maxed out basically.
Even pre Corona, how the heck they were going to finance the upcoming MAX order was anyone’s guess.
Let alone repay, what, $7b of debt? Post the virus.
How on earth do you get out of $7b of debt, from such a small revenue and poor profit history? Anyone?
Join Date: Nov 2018
Location: Maningrida
Posts: 38
Likes: 0
Received 0 Likes
on
0 Posts
I certainly mean no disrespect to VA colleagues at this troubled time, but any taxpayer money sent to VA is a mistake.
In it’s current form, it appears the business has been dealt a fatal blow with COVID-19. I would support government assisting a rebuilt 2nd airline to replace them once administration process finishes.
In it’s current form, it appears the business has been dealt a fatal blow with COVID-19. I would support government assisting a rebuilt 2nd airline to replace them once administration process finishes.
Last edited by dontgive2FACs; 18th Apr 2020 at 05:11.
Join Date: Oct 2016
Location: Most locked down city in the world
Posts: 546
Likes: 0
Received 0 Likes
on
0 Posts
Deputy Prime Minister Michael McCormack has welcomed Queensland's $200 million commitment to ailing airline Virgin Australia and insists the Morrison government is also exploring all avenues to keep two airlines in the air.
Queensland's Palaszczuk government confirmed it is providing $200 million to cash-strapped Virgin, with the airline having so far been unsuccessful in its request for a $1.4 billion loan from the federal government.
"Sustaining Australia's aviation industry is critical to protecting livelihoods and saving lives and the Federal Government is exploring all possible avenues to keep two airlines in the air, throughout this pandemic and on the other side of it," Mr McCormack told AAP on Saturday.
"I welcome states and territories exploring ways to assist their local aviation businesses and welcome the Queensland government's commitment to Virgin."
Mr McCormack, who is the federal transport minister, said the Morrison government has made a "significant investment" of an initial $165 million to keep Qantas and Virgin operating essential domestic network services, including the most crucial metropolitan and regional routes in Australia.
He said there is a heavy focus on Queensland routes.
That brings the federal government's total support to the aviation industry to $1.28 billion.
Confirming Queensland's contribution, State Development Minister Cameron Dick says it is imperative Australia has two airlines to support tourism, jobs and regional investment.
"If we're going to get through this pandemic with two national airlines ... then all governments need to come together to ensure that is the case," he told reporters in Brisbane.
"Queensland can't do this on its own. This is a national airline weathering a national crisis and it needs a national response which is why we're asking the Australian government to take the lead on this."
Mr Dick said Queensland's support was conditional on debt restructuring, shareholders and bondholders doing their bit.
The airline's headquarters would also need to remain in Brisbane and regional flights would need to continue.
Federal Labor frontbencher Jason Clare also called on the Morrison government to help Virgin.
"We need two airlines. If we don't have two, we'll have fewer flights and flights will cost more. It won't mean just 15,000 Aussies losing their jobs, but the task of crawling out of the crater created by the coronavirus will become harder," he told ABC television.
Mr McCormack said the federal government will continue to monitor Virgin's situation.
"But the best solution for the airline would be a market solution," he said.
© AAP 2020
Queensland's Palaszczuk government confirmed it is providing $200 million to cash-strapped Virgin, with the airline having so far been unsuccessful in its request for a $1.4 billion loan from the federal government.
"Sustaining Australia's aviation industry is critical to protecting livelihoods and saving lives and the Federal Government is exploring all possible avenues to keep two airlines in the air, throughout this pandemic and on the other side of it," Mr McCormack told AAP on Saturday.
"I welcome states and territories exploring ways to assist their local aviation businesses and welcome the Queensland government's commitment to Virgin."
Mr McCormack, who is the federal transport minister, said the Morrison government has made a "significant investment" of an initial $165 million to keep Qantas and Virgin operating essential domestic network services, including the most crucial metropolitan and regional routes in Australia.
He said there is a heavy focus on Queensland routes.
That brings the federal government's total support to the aviation industry to $1.28 billion.
RELATED ARTICLES
- Coronavirus live updates: Global deaths hit 150,000; China under scrutiny after Wuhan death toll doubles; 'Immune' crew to man Ruby Princess back to US
- More calls for China COVID-19 transparency
- Current coronavirus death toll 'just the tip of the iceberg'
Confirming Queensland's contribution, State Development Minister Cameron Dick says it is imperative Australia has two airlines to support tourism, jobs and regional investment.
"If we're going to get through this pandemic with two national airlines ... then all governments need to come together to ensure that is the case," he told reporters in Brisbane.
"Queensland can't do this on its own. This is a national airline weathering a national crisis and it needs a national response which is why we're asking the Australian government to take the lead on this."
Mr Dick said Queensland's support was conditional on debt restructuring, shareholders and bondholders doing their bit.
The airline's headquarters would also need to remain in Brisbane and regional flights would need to continue.
Federal Labor frontbencher Jason Clare also called on the Morrison government to help Virgin.
"We need two airlines. If we don't have two, we'll have fewer flights and flights will cost more. It won't mean just 15,000 Aussies losing their jobs, but the task of crawling out of the crater created by the coronavirus will become harder," he told ABC television.
Mr McCormack said the federal government will continue to monitor Virgin's situation.
"But the best solution for the airline would be a market solution," he said.
© AAP 2020
Join Date: Oct 2016
Location: Most locked down city in the world
Posts: 546
Likes: 0
Received 0 Likes
on
0 Posts
Deputy Prime Minister Michael McCormack has welcomed Queensland's $200 million commitment to ailing airline Virgin Australia and insists the Morrison government is also exploring all avenues to keep two airlines in the air.
Queensland's Palaszczuk government confirmed it is providing $200 million to cash-strapped Virgin, with the airline having so far been unsuccessful in its request for a $1.4 billion loan from the federal government.
"Sustaining Australia's aviation industry is critical to protecting livelihoods and saving lives and the Federal Government is exploring all possible avenues to keep two airlines in the air, throughout this pandemic and on the other side of it," Mr McCormack told AAP on Saturday.
"I welcome states and territories exploring ways to assist their local aviation businesses and welcome the Queensland government's commitment to Virgin."
Mr McCormack, who is the federal transport minister, said the Morrison government has made a "significant investment" of an initial $165 million to keep Qantas and Virgin operating essential domestic network services, including the most crucial metropolitan and regional routes in Australia.
He said there is a heavy focus on Queensland routes.
That brings the federal government's total support to the aviation industry to $1.28 billion.
Confirming Queensland's contribution, State Development Minister Cameron Dick says it is imperative Australia has two airlines to support tourism, jobs and regional investment.
"If we're going to get through this pandemic with two national airlines ... then all governments need to come together to ensure that is the case," he told reporters in Brisbane.
"Queensland can't do this on its own. This is a national airline weathering a national crisis and it needs a national response which is why we're asking the Australian government to take the lead on this."
Mr Dick said Queensland's support was conditional on debt restructuring, shareholders and bondholders doing their bit.
The airline's headquarters would also need to remain in Brisbane and regional flights would need to continue.
Federal Labor frontbencher Jason Clare also called on the Morrison government to help Virgin.
"We need two airlines. If we don't have two, we'll have fewer flights and flights will cost more. It won't mean just 15,000 Aussies losing their jobs, but the task of crawling out of the crater created by the coronavirus will become harder," he told ABC television.
Mr McCormack said the federal government will continue to monitor Virgin's situation.
"But the best solution for the airline would be a market solution," he said.
© AAP 2020
Queensland's Palaszczuk government confirmed it is providing $200 million to cash-strapped Virgin, with the airline having so far been unsuccessful in its request for a $1.4 billion loan from the federal government.
"Sustaining Australia's aviation industry is critical to protecting livelihoods and saving lives and the Federal Government is exploring all possible avenues to keep two airlines in the air, throughout this pandemic and on the other side of it," Mr McCormack told AAP on Saturday.
"I welcome states and territories exploring ways to assist their local aviation businesses and welcome the Queensland government's commitment to Virgin."
Mr McCormack, who is the federal transport minister, said the Morrison government has made a "significant investment" of an initial $165 million to keep Qantas and Virgin operating essential domestic network services, including the most crucial metropolitan and regional routes in Australia.
He said there is a heavy focus on Queensland routes.
That brings the federal government's total support to the aviation industry to $1.28 billion.
RELATED ARTICLES
- Coronavirus live updates: Global deaths hit 150,000; China under scrutiny after Wuhan death toll doubles; 'Immune' crew to man Ruby Princess back to US
- More calls for China COVID-19 transparency
- Current coronavirus death toll 'just the tip of the iceberg'
Confirming Queensland's contribution, State Development Minister Cameron Dick says it is imperative Australia has two airlines to support tourism, jobs and regional investment.
"If we're going to get through this pandemic with two national airlines ... then all governments need to come together to ensure that is the case," he told reporters in Brisbane.
"Queensland can't do this on its own. This is a national airline weathering a national crisis and it needs a national response which is why we're asking the Australian government to take the lead on this."
Mr Dick said Queensland's support was conditional on debt restructuring, shareholders and bondholders doing their bit.
The airline's headquarters would also need to remain in Brisbane and regional flights would need to continue.
Federal Labor frontbencher Jason Clare also called on the Morrison government to help Virgin.
"We need two airlines. If we don't have two, we'll have fewer flights and flights will cost more. It won't mean just 15,000 Aussies losing their jobs, but the task of crawling out of the crater created by the coronavirus will become harder," he told ABC television.
Mr McCormack said the federal government will continue to monitor Virgin's situation.
"But the best solution for the airline would be a market solution," he said.
© AAP 2020
A take over by Chinese airlines would make sense for them, China Southern in particular which wants to operate a hub out of Guangzhou. They were the cheapest option from Sydney to London awhile ago. It would also give the Skyteam alliance a presence in Australia if CS or CE got in. China Eastern already partner with QF on Chinese domestic routes so that might be in doubt if they bought a competing airline in Australia. Whilst all three are government owned, Air China is the most government of the lot but would continue the Star alliance presence. Surprisingly the article talks about saving Virgin from going into administration, possibly they want to preserve as much of the operation as they can but I can still see a significant restructure and debtors taking a loss.
Allowing Chinese ownership might be the price for preventing an airline collapse and a significant loss of jobs and creditors money. The Chinese step in as saviours preserving Australian jobs and paying the creditors most of what they owe and it return get something they wouldn't be able to in normal times.
A Chinese owned domestic airline in Australia would come in handy for all the tourists they would bring in. Just like Thailand we could have the zero dollar Chinese tourist who arrives on a Chinese airline, stays in a Chinese owned hotel, gets transported around by a Chinese owned tour company, eats in Chinese restaurants and shops in Chinese owned downtown duty frees. Actually we probably have most of that already, still it creates a few jobs in the tourism sector and they pay some non refundable taxes.
Allowing Chinese ownership might be the price for preventing an airline collapse and a significant loss of jobs and creditors money. The Chinese step in as saviours preserving Australian jobs and paying the creditors most of what they owe and it return get something they wouldn't be able to in normal times.
A Chinese owned domestic airline in Australia would come in handy for all the tourists they would bring in. Just like Thailand we could have the zero dollar Chinese tourist who arrives on a Chinese airline, stays in a Chinese owned hotel, gets transported around by a Chinese owned tour company, eats in Chinese restaurants and shops in Chinese owned downtown duty frees. Actually we probably have most of that already, still it creates a few jobs in the tourism sector and they pay some non refundable taxes.
A take over by Chinese airlines would make sense for them, China Southern in particular which wants to operate a hub out of Guangzhou. They were the cheapest option from Sydney to London awhile ago. It would also give the Skyteam alliance a presence in Australia if CS or CE got in. China Eastern already partner with QF on Chinese domestic routes so that might be in doubt if they bought a competing airline in Australia. Whilst all three are government owned, Air China is the most government of the lot but would continue the Star alliance presence. Surprisingly the article talks about saving Virgin from going into administration, possibly they want to preserve as much of the operation as they can but I can still see a significant restructure and debtors taking a loss.
Allowing Chinese ownership might be the price for preventing an airline collapse and a significant loss of jobs and creditors money. The Chinese step in as saviours preserving Australian jobs and paying the creditors most of what they owe and it return get something they wouldn't be able to in normal times.
A Chinese owned domestic airline in Australia would come in handy for all the tourists they would bring in. Just like Thailand we could have the zero dollar Chinese tourist who arrives on a Chinese airline, stays in a Chinese owned hotel, gets transported around by a Chinese owned tour company, eats in Chinese restaurants and shops in Chinese owned downtown duty frees. Actually we probably have most of that already, still it creates a few jobs in the tourism sector and they pay some non refundable taxes.
Allowing Chinese ownership might be the price for preventing an airline collapse and a significant loss of jobs and creditors money. The Chinese step in as saviours preserving Australian jobs and paying the creditors most of what they owe and it return get something they wouldn't be able to in normal times.
A Chinese owned domestic airline in Australia would come in handy for all the tourists they would bring in. Just like Thailand we could have the zero dollar Chinese tourist who arrives on a Chinese airline, stays in a Chinese owned hotel, gets transported around by a Chinese owned tour company, eats in Chinese restaurants and shops in Chinese owned downtown duty frees. Actually we probably have most of that already, still it creates a few jobs in the tourism sector and they pay some non refundable taxes.
Did the past 2 months not teach you anything???
"Queensland's Palaszczuk government confirmed it is providing $200 million to cash-strapped Virgin, with the airline having so far been unsuccessful in its request for a $1.4 billion loan from the federal government."
Call me a cynic but doesn't Ms. Palaszczuk have an election to fight in October.
Nothing like a coupla hundred mill to help secure a few more votes from the coupla thousand Virgin constituents.
Even better if you can promise something you probably won't have to spend.
Call me a cynic but doesn't Ms. Palaszczuk have an election to fight in October.
Nothing like a coupla hundred mill to help secure a few more votes from the coupla thousand Virgin constituents.
Even better if you can promise something you probably won't have to spend.
Evertonian
Especially when..."The airline's headquarters would also need to remain in Brisbane"
So, 3 Chinese airlines back Virgin. With bottomless pockets. Loss lead with pricing and kill off every other airline in Australia.
These guys are patient stalkers and plan way ahead of any Australian.
These guys are patient stalkers and plan way ahead of any Australian.
