Go Back  PPRuNe Forums > PPRuNe Worldwide > Australia, New Zealand & the Pacific
Reload this Page >

"Virgin Australia Mk II could launch in as little as three months"

Australia, New Zealand & the Pacific Airline and RPT Rumours & News in Australia, enZed and the Pacific

"Virgin Australia Mk II could launch in as little as three months"

Old 24th Apr 2020, 00:36
  #21 (permalink)  
 
Join Date: Dec 2001
Location: Brisvegas
Posts: 3,460
Likes: 0
Received 0 Likes on 0 Posts
The only people in the driving seat are the creditors, if they don't like what the administrators propose then it does not happen. We have not seen legal action yet. The first admin meeting will be interesting.


I think Scurrah ran the meeting as PR to give the impression he was running the show, keep confidence high.
Icarus2001 is offline  
Old 24th Apr 2020, 00:52
  #22 (permalink)  
 
Join Date: Jun 2001
Location: Jungle
Posts: 582
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by Paragraph377 View Post
Bingo!!!!Spot on. Branson is a 1970’s brand. You don’t need him, time to retire the fool to Pecker Island indefinitely. Make the brand true Australian.
Could the Ansett name and branding be reused?
smiling monkey is offline  
Old 24th Apr 2020, 01:08
  #23 (permalink)  

Evertonian
 
Join Date: May 2000
Location: #3117# Ppruner of the Year Nominee 2005
Posts: 11,561
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by smiling monkey View Post
Could the Ansett name and branding be reused?
No, just no. Your brand stands for who you are & what you represent. If you need to piggy back off another entity then you let both entities down.

Besides, call it Ansett & you'll get thousands of FF members dusting off their cards & demanding their points!
Buster Hyman is offline  
Old 24th Apr 2020, 02:36
  #24 (permalink)  
 
Join Date: Feb 2012
Location: BBN
Posts: 827
Likes: 0
Received 0 Likes on 0 Posts
Whatever emerges after June one thing is certain Virgin Australia and Jetstar will struggle to survive the next 12 months. When domestic operations start up there will be still some form of social distancing laws in place for aviation and to get customers confidence it will be in the form of blocking the middle row, this is why Virgin and Jetstar will struggle to survive. QF have a more loyal customer base and might get by, but JQ and VA are and will be low cost they will have to increase airfares to counter this by how much guess by at least 40-50%. The whole social media campaign “save Virgin keep fares low Australia needs two airline” well let’s see if they keep to that I very much doubt they will be able to.
SHVC is offline  
Old 24th Apr 2020, 02:53
  #25 (permalink)  
 
Join Date: May 2011
Location: BNE
Posts: 0
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by SHVC View Post
Whatever emerges after June one thing is certain Virgin Australia and Jetstar will struggle to survive the next 12 months. When domestic operations start up there will be still some form of social distancing laws in place for aviation and to get customers confidence it will be in the form of blocking the middle row, this is why Virgin and Jetstar will struggle to survive. QF have a more loyal customer base and might get by, but JQ and VA are and will be low cost they will have to increase airfares to counter this by how much guess by at least 40-50%. The whole social media campaign “save Virgin keep fares low Australia needs two airline” well let’s see if they keep to that I very much doubt they will be able to.
I disagree. Any new virgin will have got rid of most of debt & will have much lower costs than qantas.

Qantas makes a huge % of profits on golden triangle. Most of virgins revenue come from triangle as well.

So competing on triangle, qantas has high costs & virgin low costs. Both will have plenty of frequent unlike junkstar.

We're in a deep recession & many will forget about ff pts & go for cheapest option with frequency(which rules out JQ, (although some small business owners might fly JQ to save $5), which well might be new virgin, whatever it's called.

Re social distancing - initially only effects single travellers not families & may mean in worst case, wearing a mask.
BNEA320 is offline  
Old 24th Apr 2020, 03:24
  #26 (permalink)  
rmm
 
Join Date: May 2002
Location: BNE
Posts: 256
Likes: 0
Received 0 Likes on 0 Posts
We're in a deep recession
So where would the pax come from in this environment? I doubt many of the people living off $750 a week are budgeting for air travel.
You mentioned VERY high frequency on the golden triangle (every 30 minutes?), coupled with the above I can't see them filling aircraft. I hope I'm wrong for the industries sake.
They may not even have metal post admin too achieve that. I'd imagine QF running A333's on the triangle (which we've seen the last few days) the freight alone on
these would probably cover their costs.
rmm is offline  
Old 24th Apr 2020, 03:27
  #27 (permalink)  
 
Join Date: Aug 2018
Location: Melbourne
Posts: 345
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by BNEA320 View Post
I disagree. Any new virgin will have got rid of most of debt & will have much lower costs than qantas.

Qantas makes a huge % of profits on golden triangle. Most of virgins revenue come from triangle as well.

So competing on triangle, qantas has high costs & virgin low costs. Both will have plenty of frequent unlike junkstar.

We're in a deep recession & many will forget about ff pts & go for cheapest option with frequency(which rules out JQ, (although some small business owners might fly JQ to save $5), which well might be new virgin, whatever it's called.

Re social distancing - initially only effects single travellers not families & may mean in worst case, wearing a mask.
Can QF/VA sell all their business class seats? 1A and 1C are pretty close to one another on a 737
ECAMACTIONSCOMPLETE is offline  
Old 24th Apr 2020, 03:34
  #28 (permalink)  
 
Join Date: May 2011
Location: BNE
Posts: 0
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by rmm View Post
So where would the pax come from in this environment? I doubt many of the people living off $750 a week are budgeting for air travel.
You mentioned VERY high frequency on the golden triangle (every 30 minutes?), coupled with the above I can't see them filling aircraft. I hope I'm wrong for the industries sake.
They may not even have metal post admin too achieve that. I'd imagine QF running A333's on the triangle (which we've seen the last few days) the freight alone on
these would probably cover their costs.
talk of unemployment going from 5 to 10%, or in other words employment going from 95% to 90%

Still will be a lot of people flying for business, maybe even more looking for business. Every 30 mins seems reasonable during peak hours Mon-Fri, roughly 0600-800 & 1630-1830.

Catch with an A333, if sitting down back, it takes a looong time to get off aircraft.
BNEA320 is offline  
Old 24th Apr 2020, 03:37
  #29 (permalink)  
 
Join Date: Jun 2019
Location: Denmark
Posts: 0
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by BNEA320 View Post
So competing on triangle, qantas has high costs & virgin low costs. Both will have plenty of frequent unlike junkstar.

We're in a deep recession & many will forget about ff pts & go for cheapest option with frequency(which rules out JQ, (although some small business owners might fly JQ to save $5), which well might be new virgin, whatever it's called..
Junkstar as you so eloquently put it has plenty of frequent flyers on the triangle more so on SY-ML, also have regulars on a lot of other routes, I’m not loosing any sleep. Jetstar already have a lower cost base which VA don’t have, remember they have expensive EBAs for unproductive work forces that have not been re-negotiated yet. I’m confident there will be punters keen to travel once these bans are lifted and they will look for the cheapest option, Jetstar will come out strong their prices may increase a little on some routes but all airlines will do this they have a lot to recover.
VA have a lot of work to do before they’re any kind of competition to anyone even Rex. latest from Deloitte as their debt closer to $6.9B so it will take a lot to entice anyone to buy VA given their track record over the years.
Ragnor is offline  
Old 24th Apr 2020, 03:41
  #30 (permalink)  
 
Join Date: Sep 2007
Location: Australia
Posts: 234
Likes: 0
Received 0 Likes on 0 Posts
Most of those higher costs you mention will probably still be stood down. What other higher costs are there? I get optimisim, I have it for VA crew as well, but predicting the downfall of QF based on VA administration is well, a little far fetched.
cloudsurfng is offline  
Old 24th Apr 2020, 03:49
  #31 (permalink)  
 
Join Date: May 2011
Location: BNE
Posts: 0
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by Ragnor View Post
Junkstar as you so eloquently put it has plenty of frequent flyers on the triangle more so on SY-ML, also have regulars on a lot of other routes, I’m not loosing any sleep. Jetstar already have a lower cost base which VA don’t have, remember they have expensive EBAs for unproductive work forces that have not been re-negotiated yet. I’m confident there will be punters keen to travel once these bans are lifted and they will look for the cheapest option, Jetstar will come out strong their prices may increase a little on some routes but all airlines will do this they have a lot to recover.
VA have a lot of work to do before they’re any kind of competition to anyone even Rex. latest from Deloitte as their debt closer to $6.9B so it will take a lot to entice anyone to buy VA given their track record over the years.
up until corona, very few business types flew JQ on triangle unless $$$ tight, beasue if JQ aircraft went U/S might not be another JQ flight for many hours & JQ wouldn't put you on QF.

VA EBAs have gone out the window. Anyone at VA thinking V2 will be paying them anything like what they were getting is dreaming. V2 will be smaller, with lot less staff getting paid a lot less, probably to do more.

It's now an employers market. It will be take it or leave it & that will be only for those who are asked to apply.

What VA debt ? Isn't most of that aircraft leases, which will go fast.

New airline to aircraft owners - we'll give you $x/month for your aircraft, take it or leave it. There are going to be 1000s of aircraft parked & just like post SEP11, airlines can dictate to aircraft owners what willing/able to pay.
BNEA320 is offline  
Old 24th Apr 2020, 03:52
  #32 (permalink)  
 
Join Date: Jun 2019
Location: Denmark
Posts: 0
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by cloudsurfng View Post
Most of those higher costs you mention will probably still be stood down. What other higher costs are there? I get optimisim, I have it for VA crew as well, but predicting the downfall of QF based on VA administration is well, a little far fetched.
I don’t think any downfall to QF will happen they’re a well greased oiled machine and despite of what anyone thinks of the team at the top, they’re good better than the top at VA.. All my point was maybe not clear, everyone is saying VA will be back better and stronger well they have a lot of work to do more than most realise. Not as simple as renegotiating this, moving that wipe the debt. I don’t want to see anyone loose their jobs Pilots down to ground handlers.
Ragnor is offline  
Old 24th Apr 2020, 03:57
  #33 (permalink)  
 
Join Date: Jun 2019
Location: Denmark
Posts: 0
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by BNEA320 View Post
up until corona, very few business types flew JQ on triangle unless $$$ tight, beasue if JQ aircraft went U/S might not be another JQ flight for many hours & JQ wouldn't put you on QF .
Well seems to be your opinion more than fact! JQ do put punters on QF, obviously when every other avenue has been exhausted I have seen it first hand on more than one occasion.
Ragnor is offline  
Old 24th Apr 2020, 04:04
  #34 (permalink)  
 
Join Date: Jul 2010
Location: Asia
Posts: 1,381
Likes: 0
Received 0 Likes on 0 Posts
https://www.smh.com.au/business/comp...i2cpDnzPdYi6ps

For years Virgin Australia has been recognised as a very good airline but a very bad business. So this begs the question: What is Qantas’ worst nightmare? Virgin remains a good airline but becomes a good business.

Sure businesses that go through the ignominy of administration suffer brand damage but if they come out the other side they get their phoenix moment - and with a pretty clean sheet of paper from which to build a better business.

Having said that Qantas will almost certainly pick up some market share when flying begins again.


Virgin chief executive Paul Scurrah and Qantas CEO Alan Joyce. It is unclear whether Qantas will be a winner from a revamped Virgin.

But the medium-term prospects are unclear. When companies enter administration, existing contracts, legacy agreements and historical structures can be toasted. As a business that will work in Virgin’s favour.
It is not only the Virgin 2.0 balance sheet that will look much healthier having cut a swathe through the $5 billion debt pile, the resurrected airline will be able to establish a new cost base - one that will be significantly lower than that of Qantas.

Administration triggers the opportunity to renegotiate everything from the current enterprise bargaining agreements to fuel hedging contracts, lease rentals from the airport owners and catering. It is a lot like starting a business from scratch.

Students of history will remember Virgin Australia’s predecessor, Virgin Blue, started life in 2000 as a budget airline that operated with a very small cost base and rapidly expanded over the next couple of years after Ansett collapsed.

And even after it was reinvented by former chief executive John Borghetti into a premium airline and massively increased costs, it still beat Qantas on the cost metric. There is no doubt the ability to reset costs will be a huge factor that weighs into the amount would-be Virgin buyers would need to recapitalise the business and place it on a profitable footing.

The extent to which the emergence of Virgin 2.0 becomes a problem for Qantas depends on the plans of the party which gets control of Virgin.


A buyer may choose to pitch Virgin 2.0 as a hybrid - with a scaled-down business offering with a more upmarket leisure product. That would suit Qantas and allow it to grow its share of the business market but could eat into Qantas mainline's share of the leisure market.The third option would be to retain Virgin as a premium carrier and take advantage of the lower cost base to improve margins or reduce fares.

This would be the worst-case scenario for Qantas. Even as a premium carrier Virgin could reduce less profitable routes and ditch or pare back its international operations which have in the past been mostly loss-making. It could focus on increasing the frequency of the main capital city routes.

Which strategy is employed is in the hands of the new owners - the identity of which won’t be known for a couple of months.

But there is no guarantee that Virgin’s administration will be positive for Qantas. There are too many unknowns at this point for Qantas investors. Its shares fell 6.7 per cent on Wednesday. But in the current information vacuum and amid a virtual aviation shutdown punting on airlines is a hazardous pastime.
krismiler is offline  
Old 24th Apr 2020, 04:13
  #35 (permalink)  
 
Join Date: Aug 2013
Location: Qatar
Posts: 53
Likes: 0
Received 0 Likes on 0 Posts
I think this article has been overtaken by the initial debt estimate now at $6.8 billion and expected to rise significantly once a full review is complete.
Denied Justice is offline  
Old 24th Apr 2020, 04:15
  #36 (permalink)  
 
Join Date: May 2011
Location: BNE
Posts: 0
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by Ragnor View Post
Well seems to be your opinion more than fact! JQ do put punters on QF, obviously when every other avenue has been exhausted I have seen it first hand on more than one occasion.
maybe
but not on every occasion.

Was at SYD one evening few years ago, changing my QF flight at service desk, when all these JQ pax turned up. I think JQ service desk had just palmed them off.

It was about 1800 & a JQ flight SYD/BNE had just been cancelled & was last for the night.

QF had plenty of seats on 1/2 dozen flights from 1800 to 2100, but pax were told to go home & come back tomorrow. Quite a few pax said BNE was home. One person, rang someone & got a QF ff seat at last minute. Think it was 2100 they got ff seat on & then went into QF club & saw him in there & he said he got on 1900 flight & had to go & board. So much stuffing around, when QF could have easily put all JQ pax on QF flights.
BNEA320 is offline  
Old 24th Apr 2020, 05:38
  #37 (permalink)  
 
Join Date: Jun 2001
Location: Jungle
Posts: 582
Likes: 0
Received 0 Likes on 0 Posts
Originally Posted by BNEA320 View Post

Qantas makes a huge % of profits on golden triangle. Most of virgins revenue come from triangle as well.
What's this Golden Triangle you speak of? Can't possibly be MEL-SYD-BNE because that's not a triangle, that's a straight line!
smiling monkey is offline  
Old 24th Apr 2020, 06:12
  #38 (permalink)  
Thread Starter
 
Join Date: Jan 2017
Location: MEL
Posts: 187
Likes: 0
Received 0 Likes on 0 Posts
So much for Virgin's claimed $5bn debt, the administrators have gone through the books and reckon it's actually $6.9bn!

https://www.reuters.com/article/us-h...-idUSKCN22604D

SYDNEY (Reuters) - Virgin Australia Holdings Ltd (VAH.AX) owes A$6.9 billion ($4.39 billion) to more than 10,000 creditors based on an initial review and will seek a three-month payment waiver from aircraft lessors, its administrators said.
Virgin said this week it succumbed to third-party led restructuring that could lead to a sale, turning Australia’s second-biggest airline into the Asia-Pacific’s biggest victim of the coronavirus crisis.
The figure owed to creditors includes about A$2.3 billion of secured debt, A$2 billion of unsecured bonds, A$1.9 billion of aircraft leases, A$450 million owed to employees, A$167 million to trade creditors and A$71 million to landlords, according to an affidavit from administrator Vaughan Strawbridge.
So almost $7 billion in the red, of which $2 billion along is owed on leased aircraft. How could the airline keep convincing itself that it could turn a corner in the face of this mountain of debt? With Borghetti it always seemed to be
a) never mind the big ugly red number, look at the fact that this half-year or year we lost less than last time, or we have more cash at hand, or we have more revenue, or anything but the actual bottom line
b) we would have gone better but something happened and something else was to blame
c) sorry but we can't give guidance on the next financials because some other stuff might happen

This is a reality check as to how bad things really were. No wonder Luxon did the dummy-spit and wanted JB gone.



MelbourneFlyer is offline  
Old 24th Apr 2020, 07:06
  #39 (permalink)  
 
Join Date: Aug 2005
Location: Brisbane
Posts: 228
Likes: 0
Received 0 Likes on 0 Posts

"Why not call the new airline ANSETT "

Probably not available but maybe Velocity Airlines is.

It's a known brand with an immediate tie-up with the Frequent Flyer program, demonstrates some recognition of where the brand came from and suggests a brand 'going places'.


Apologies for the font size but I can't seem to adjust it.
C441 is offline  
Old 24th Apr 2020, 07:16
  #40 (permalink)  
 
Join Date: Jun 2010
Location: Sydney
Age: 39
Posts: 483
Likes: 0
Received 0 Likes on 0 Posts
Oh boy. More debt and inaccurate financial information being given to the ASX. This could get interesting.
normanton is offline  

Thread Tools
Search this Thread

Contact Us - Archive - Advertising - Cookie Policy - Privacy Statement - Terms of Service - Do Not Sell My Personal Information

Copyright © 2021 MH Sub I, LLC dba Internet Brands. All rights reserved. Use of this site indicates your consent to the Terms of Use.