Private equity take-over for Virgin Australia?
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This is a more sobering and realistic assessment of the the path ahead by Ian Verrender:
https://www.abc.net.au/news/2020-04-...lines/12169620
https://www.abc.net.au/news/2020-04-...lines/12169620
Des, that’s the same one I posted. It has no substance whatsoever. Simply an assertion that Australia can’t support two airlines. Ever heard of predatory pricing? That is what Qantas did to each competitor in turn.
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You don't have to be an ANU graduate as the evidence is pretty compelling our market is still not big enough for two profitable airlines running a full domestic network. In 20 years VA has lost more money than its made both as a low cost carrier and as a full service airline so it's hards to argue against the numbers and although you can blame JB and his team ultimately any other management team would have not faired much better.
Also theres plenty of evidence "foreign ownership" specially from a Chinese entity was a major driver for the GOV not to step in, just randomly view any youtube video with VA news and read the comments section, is is clear Ozzies were well aware of this fact and bailing out "foreign airlines" was not going to be a vote wining venture even in good times..
Also theres plenty of evidence "foreign ownership" specially from a Chinese entity was a major driver for the GOV not to step in, just randomly view any youtube video with VA news and read the comments section, is is clear Ozzies were well aware of this fact and bailing out "foreign airlines" was not going to be a vote wining venture even in good times..
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People here seem oblivious "Private equity" firms are all about, they are sharks who prey on the carcasses of failing business only to pick them up for cheap, dress them up and put some make up, having devouring their inners they then sell the dead carcass to unsuspecting investors though the stock market.
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although you can blame JB and his team ultimately any other management team would have not faired much better.
Also theres plenty of evidence "foreign ownership" specially from a Chinese entity was a major driver for the GOV not to step in, just randomly view any youtube video with VA news and read the comments section, is is clear Ozzies were well aware of this fact and bailing out "foreign airlines" was not going to be a vote wining venture even in good times..
Des, Qantas subsidizes Jetstar so it is selling tickets at less than the cost of production. It does this to nail VA. This is called predatory pricing and is illegal under trade practices law. QF gets away with it because the ACCC is toothless and QF have too much political clout. Furthermore nobody with necessary aviation forensic accounting skills would risk their career to do the required analysis. We had this discussion years ago.
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Des, Qantas subsidizes Jetstar so it is selling tickets at less than the cost of production. It does this to nail VA. This is called predatory pricing and is illegal under trade practices law. QF gets away with it because the ACCC is toothless and QF have too much political clout. Furthermore nobody with necessary aviation forensic accounting skills would risk their career to do the required analysis. We had this discussion years ago.
Entrust, I cannot read the article but it looks promising if the muzzle is applied to QF. All the States are now painfully aware of what airline schedules and services can do for their economies.
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You may be right and to what extent QF subsidises JQ is unknown, in all fairness they wouldn't have too if they wouldn't have to compete agains tree large government subsidised middle east carriers who don't seem to have an issue with flooding Australian skies with empty planes.
It's is fairly well know QF makes the bulk of its profits from its domestic arm and to an extend these subsidise its international operations, so I don't blame them for doing what it takes to enable them to be profitable. In the end the root of these inefficiencies lie in not allowing for a "true free market" where everyone can compete on a level playing field, ultimately this is at the expense of our local aviation industry.
It's is fairly well know QF makes the bulk of its profits from its domestic arm and to an extend these subsidise its international operations, so I don't blame them for doing what it takes to enable them to be profitable. In the end the root of these inefficiencies lie in not allowing for a "true free market" where everyone can compete on a level playing field, ultimately this is at the expense of our local aviation industry.
Evertonian
Interesting to see Linfox at it again. He almost got TT but having missed out, he's circling the Mothership now! Still searching for his AVV based airline.
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so what about this scenario.
A revived VA, called whatever
(spirit of OZ the flying wallaby seen on another forum, sounds great)
, flies only golden triangle VERY frequently & CBR & PER with cheap leases & only 2 class B738s & staff on less pay than they were getting at old VA.
Crews to do only day trips. No expensive overnights anywhere.
Qantas ****s themselves, as then stuck between a rock & a hard place.
Alliance takes over VARA & flies their F70/F100s hard on FIFO & on thin regional routes & maybe even some flights into MEB. Are their any other F70/F100s around Alliance could grab hold of? (what's biggest aircraft that currently allowed to fly into Essendon currently ? F100 ? or B717 ?)
Even if didn't ever actually fly to MEB, it would mean a big negotiating tool to get costs at MEL down to rock bottom.
Regional routes perhaps subsidised to some degree, by all levels of govt, to make them viable &/or very early/very late flights, when aircraft not being used on profitable routes. Hotels in regions like CNS, TSV have to adjust their check in check out times.
SYD curfew might have to go away for 12 months, as to get capacity back asap, there might have be some earlier/later flights in & out of SYD, which is where most of the cheap seats will be, along with middle of the day not peak hour Mon-Fri. (aircraft can't be in 2 places at once)
If SYD curfew not gone, then relaxed, with no fines whatsoever, for being a few minutes after 2300.
(it's crazy that a pax has to fake a heart attack to get aircraft to land at SYD at 2301 without airline getting some massive fine)
A realistic schedule could be shown to govts & when things like weather cause havoc, aircraft just land & take off after 2300 with no debate, otherwise no airline wants to plan to land after 2100 & get stuck at SYD. Similarly airlines could plan to take off at 2259 & sometimes that might end up being 2359.
There might be some very high utilisation of aircraft & need no curfew at SYD if F70s/F100s flying there as delays are ok, but not when a stupid curfew to factor in.
(vaguely remember after SEP 11, domestic flights at all hours into BNE, SYD, MEL)
VA international either gone or severely cut back to AKL, ZQN, some flights to Fiji (instead of 7-8 flights per week from BNE, SYD & MEL, maybe 2-4 days a week).
LAX ?
Air NZ/Jetstar to pick up trans tasman capacity.
Fiji air(FJ) to increase flights Australia to Fiji, because they'd have to, to bring tourists to Fiji (do they exist for any other reason) Maybe FJ overnight an aircraft at BNE & MEL some nights a week, like at SYD, as previous VA schedules suited Fiji holiday makers better, than FJ schedules.
Air Vanuatu to increase flights to Australia, maybe using Air Kiribati new aircraft, rather than Nauru's very old 733s.
Solomons ? VA should have dropped HIR long ago.
Bali ?
Did VA actually make money flying to DPS ?
DPS demand will surely drop, at least initially due to heightened health concerns.
Where else did VA flying Int ? Tassy ?
It's probably a very good time for airlines to get concessions out of govts/airports, rather than handouts.
A revived VA, called whatever
(spirit of OZ the flying wallaby seen on another forum, sounds great)
, flies only golden triangle VERY frequently & CBR & PER with cheap leases & only 2 class B738s & staff on less pay than they were getting at old VA.
Crews to do only day trips. No expensive overnights anywhere.
Qantas ****s themselves, as then stuck between a rock & a hard place.
Alliance takes over VARA & flies their F70/F100s hard on FIFO & on thin regional routes & maybe even some flights into MEB. Are their any other F70/F100s around Alliance could grab hold of? (what's biggest aircraft that currently allowed to fly into Essendon currently ? F100 ? or B717 ?)
Even if didn't ever actually fly to MEB, it would mean a big negotiating tool to get costs at MEL down to rock bottom.
Regional routes perhaps subsidised to some degree, by all levels of govt, to make them viable &/or very early/very late flights, when aircraft not being used on profitable routes. Hotels in regions like CNS, TSV have to adjust their check in check out times.
SYD curfew might have to go away for 12 months, as to get capacity back asap, there might have be some earlier/later flights in & out of SYD, which is where most of the cheap seats will be, along with middle of the day not peak hour Mon-Fri. (aircraft can't be in 2 places at once)
If SYD curfew not gone, then relaxed, with no fines whatsoever, for being a few minutes after 2300.
(it's crazy that a pax has to fake a heart attack to get aircraft to land at SYD at 2301 without airline getting some massive fine)
A realistic schedule could be shown to govts & when things like weather cause havoc, aircraft just land & take off after 2300 with no debate, otherwise no airline wants to plan to land after 2100 & get stuck at SYD. Similarly airlines could plan to take off at 2259 & sometimes that might end up being 2359.
There might be some very high utilisation of aircraft & need no curfew at SYD if F70s/F100s flying there as delays are ok, but not when a stupid curfew to factor in.
(vaguely remember after SEP 11, domestic flights at all hours into BNE, SYD, MEL)
VA international either gone or severely cut back to AKL, ZQN, some flights to Fiji (instead of 7-8 flights per week from BNE, SYD & MEL, maybe 2-4 days a week).
LAX ?
Air NZ/Jetstar to pick up trans tasman capacity.
Fiji air(FJ) to increase flights Australia to Fiji, because they'd have to, to bring tourists to Fiji (do they exist for any other reason) Maybe FJ overnight an aircraft at BNE & MEL some nights a week, like at SYD, as previous VA schedules suited Fiji holiday makers better, than FJ schedules.
Air Vanuatu to increase flights to Australia, maybe using Air Kiribati new aircraft, rather than Nauru's very old 733s.
Solomons ? VA should have dropped HIR long ago.
Bali ?
Did VA actually make money flying to DPS ?
DPS demand will surely drop, at least initially due to heightened health concerns.
Where else did VA flying Int ? Tassy ?
It's probably a very good time for airlines to get concessions out of govts/airports, rather than handouts.
Last edited by BNEA320; 22nd Apr 2020 at 02:25.
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flies only golden triangle VERY frequently & CBR & PER with cheap leases
QF could fly the same with "owned metal", no leasing costs involved. Can't see your MEB happening.
Last edited by rmm; 22nd Apr 2020 at 03:31.
You lost me at “Qantas ****s themselves, as then stuck between a rock & a hard place.....”
as Pauline Hanson would say: “Please explain?”
as Pauline Hanson would say: “Please explain?”
Yes, I am sure Qantas is quaking in their boots with the only domestic competition being virtually insolvent. I doubt Qantas is dedicating much time at all to what Virgin is up too, their campaign for no government bailout was successful and they are now figuring out how to keep themselves in business. On a town hall last week we were told Qantas Group can stay grounded for 12 months with current cashflow, that was before the limited domestic schedule restarting. Domestic Oz and NZ likely restarting within the next 4 weeks with perhaps some Tasman in June. So I don’t think Qantas is ready to string themselves up just yet, they will be making a market share grab whilst Air NZ and Virgin are otherwise distracted.
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A huge % of profits come from golden triangle.
Qantas does not want to get into a price war. New airline would be giving away heaps to get corporates on board.
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Yes, I am sure Qantas is quaking in their boots with the only domestic competition being virtually insolvent. I doubt Qantas is dedicating much time at all to what Virgin is up too, their campaign for no government bailout was successful and they are now figuring out how to keep themselves in business. On a town hall last week we were told Qantas Group can stay grounded for 12 months with current cashflow, that was before the limited domestic schedule restarting. Domestic Oz and NZ likely restarting within the next 4 weeks with perhaps some Tasman in June. So I don’t think Qantas is ready to string themselves up just yet, they will be making a market share grab whilst Air NZ and Virgin are otherwise distracted.
New airline, if run by likes of Indigo, will probably be hedging fuel & all other costs much lower than qantas. Any ex VA staff who think they will get paid anything like what they were getting are dreaming. They'll probably work more for less. Those who don't like that, don't need to apply.
If newby goes where the money is, they can't loose. Qantas can't easily lower their staffing costs.
Qantas are stuck with highly paid staff & a very mixed fleet. International might be slower to take off than domestic, which favours newby.
Golden triangle is called golden for a reason.