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20 buyers now circling Virgin Australia

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20 buyers now circling Virgin Australia

Old 1st May 2020, 00:42
  #21 (permalink)  
 
Join Date: Feb 1999
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Originally Posted by junior.VH-LFA View Post
That's ridiculous as it is let alone trying to apply it to a LCC Virgin 2.0 on likely limited routes.
and herein lies the problem.
we privatize the business, yet virtually monopolize the contracts to it. QF get 95% of government contracts!
How is a competitor to grow on applicable routes without the seed access.
VA should be achieving around 30% given the total market share is closer to 40% (pre COVID).
it is clearly skewed in QF’s favor, no matter which way you look at it.
and the above post alludes to QF earning it. QF always had it, (it was government owned) Ansett worked to gain some of it and was making a success of it. Ansett collapsed, Virgin Blue was a LCC, QF therefore got ALL of it back. Virgin then proceed down the path of a ridiculously expensive and ambitious timeline to get some of that market back. The investment has left them exposed and they still only achieved 5% due to QF favoritism (clear), without the yield, it is near impossible to achieve rapid ROI.
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Old 1st May 2020, 01:03
  #22 (permalink)  
 
Join Date: Nov 2008
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Allan Joyce and QF are not just going to throw out the red carpet to allow a V2 a gilt edged inside running back into the market because its nice to have two mainline airlines. Like wise with ANZ should a trans Pacific service be operated by V2.
Qantas will flood the market with excess capacity at a discount price that will secure the already nervous customer base from forward purchasing tickets and chancing their luck with V2 or a travel agent like Flight Centre with the possibility they might fold. The market loves stability. A short term drop in yield by QF would be worth the long term gain of driving V2 out of the market or reducing their market share so that they are just a fringe player. All this is speculation of course and assumes that Deloitte can do a deal with some punter with very deep pockets who is willing to recover their multi-billion dollar investment over a long period of time given the skinny yield in in the game
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Old 1st May 2020, 01:33
  #23 (permalink)  
 
Join Date: Aug 2007
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This article from ABC News 24th April contradicts your concerns.

“ Australia's competition watchdog has warned Qantas it will take swift action against anti-competitive behaviour such as attempts to swamp airline routes, artificially push down prices or lock in exclusive deals with airports and suppliers.”
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Old 1st May 2020, 01:45
  #24 (permalink)  
 
Join Date: Nov 2008
Location: australia
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The ACCC record is not covered in glory. Relatively toothless and they have to prove anti-competitive behaviour versus QF just giving the customer what they want, i.e, cheap seats and plenty of them. On routes where there is no V2 - its open slather and we will pay dearly.
Just look at the ACCC's complete lack success on the price of fuel at the bowser if you need an example of their inability to have much influence on the market.
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Old 1st May 2020, 02:41
  #25 (permalink)  
 
Join Date: Jun 2009
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Much hype , promises and dazzling showmanship in the talking up by Virgin/administrators

Really just a continuation of the showmanship and big talk and big promises emanating from Virgin Australia over the last ten years

A truly dazzling former boss of Virgin , custom designer suits , smooth as silk words

Why an earth would anyone pay a one dollar for a business where you immediately owe $7 B & losses 200 M every year

Does anyone actually believe these stories about "buyers circling"

Does it make any sense ?
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Old 1st May 2020, 03:15
  #26 (permalink)  
 
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https://www.lawyersweekly.com.au/big...tralia-fallout

sounds like the plans are going well.....
It is also understood that KWM put their concerns in writing, telling Deloitte that after 60 days, lessors would take possession of aircraft, engines, technical records and so on, if administrators did not agree “to perform all future obligations”.
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Old 1st May 2020, 03:35
  #27 (permalink)  
 
Join Date: Aug 2018
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Why an earth would anyone pay a one dollar for a business where you immediately owe $7 B & losses 200 M every year Does anyone actually believe these stories about "buyers circling" Does it make any sense ?
That is the point of Voluntary Administration. To knock down the debt and make the operation a viable proposition. However for that to happen the debt holders are not going to get paid at 100%. If they make a stand it will be all over as noone is going to buy it at current debt levels. If the debt holders can come to an arrangement then someone will buy the airline.
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Old 1st May 2020, 04:51
  #28 (permalink)  
 
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Pardon my naivety but does the debt goes away when the company is liquidated & it is just a sale of hardware ?

The AOC is owned by the company so you have to buy the company to get the AOC , not my area but how can you say abbra caddabbra all debts disappear

If liquidated the debts go , but also the company goes & thus the AOC is gone

I find the amount owed to aircraft lessors incredible , nearly $ 2 000, 000, 000 or the cost of 20 A320 neos

They can't have been paying leasing costs for months or years , maybe five aircraft lessors each owed $ 400, 000 , 000

That is serious coin & not great form on the part of Virgin

How is the Airline able to fly aeroplanes around now( & incur further maintenance costs , devalue) that they don't own and have not paid lease fees on & are not currently paying any lease fees on.

Is that not a bit cheeky ?

Surely the right thing to do would be return the aircraft to their owner
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Old 1st May 2020, 05:17
  #29 (permalink)  
 
Join Date: Mar 2003
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Originally Posted by Sunfish View Post
The BS normally starts with : ”I represent a Saudi Prince / Chinese Billionaire / Asian Company / American venture capital group that wishes to buy your airline but the name must be kept secret and everything must be in strictest confidence”
Have you ever actually heard anyone say any of those things Sunfish ? Have you ever been in the room with a Saudi Prince, a Chinese billionaire or the head of a Venture Capital firm ? No ? I thought not.

Perhaps you could reserve your many, many, wild, port soaked musings to another area of the site. Spotters corner, or whatever other section they have for the ‘long retired, very thoughtful, and tinfoil positive’ ? Perhaps drag Paragraph377 with you. If he’s not ambulatory.

Unless of course you’re actually an airline pilot, who has direct and current insight into all of the many, many subjects that you’ve mentioned. Saudi Princes etc. etc.

Cheers.
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Old 1st May 2020, 05:22
  #30 (permalink)  
 
Join Date: Jan 2006
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I’ll have a crack.

The value of Virgins parts are worth much less than it is as a whole after a bit of surgery. This is important because it puts liquidation further down creditor preferences.

So, it is possible all creditors, not just the unsecured bondholders, may be prepared to accept a write down of some of the debt. Maybe as a trade for new equity? Maybe a haircut is the only option. It’ll be a negotiation. Virgin might be “saved” because instead of having $7B in debt, it may move forward with $3B. Some of the reductions will be write downs, some won’t exist such as a result of cancelled lease agreements, some won’t be needed such as employee redundancy provisions. The DOCA will specify it all if that’s the path forward.

However, the Deloitte administrator recently commented they “probably have the assets for employee entitlements.” Not a great advertisement of their financial position. There is no guarantee the Virgin brand will remain. It’s looking shaky especially if there is an agreement whereby private equity buy the liquidated assets and simultaneously do a deal with existing secured creditors to guarantee their votes.

It has to be acknowledged the opposing desires of the potential new owners and existing creditors. Obviously the existing creditors want the biggest return, but the new owners want minimal liabilities. St Nick is there for a reason too. The distressed private equity specialists will find the politics too much trouble when there are numerous competing equity options without similar interference.
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Old 1st May 2020, 05:45
  #31 (permalink)  
 
Join Date: Feb 2020
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Unless of course you’re actually an airline pilot, who has direct and current insight into all of the many, many subjects that you’ve mentioned. Saudi Princes etc. etc.
Are you serious? A pilot making sound financial decisions? That's a laugh.

I don't know the dude, have never met him, or spoken to him but I know he has business management qualifications as well as a host of other. You don't like what he says but I'll take his summation of the 'suitors' over a line pilots any day of the week.
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Old 1st May 2020, 05:47
  #32 (permalink)  
 
Join Date: Sep 2018
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We sure do live in a crazy world!
You can run a business like VA borrowing boat loads of cash, rack up large debts, the fat cats get paid big bucks, the back slapping goes on behind the scenes with lots of glossy advertising people come and go with golden handshakes all the while the work force at the coal face bring in the $$$$ to cover said perks for those fat cats then along comes the straw that breaks the camels back (CV19) the fat cats ask for billions of dollars to keep the sinking Titanic from going down a little longer cause the trough ain't quite empty yet and bingo, into recievership and all bets are off, so sorry thanks for the free hand but no funds to pay our debts!
......next!
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Old 1st May 2020, 06:12
  #33 (permalink)  
 
Join Date: Feb 2020
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Privatise the profits and socialise the losses, great society that is.
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Old 1st May 2020, 06:14
  #34 (permalink)  
 
Join Date: Jun 2009
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But who would invest in an airline when the worldwide airline industry has ceased ? You have a massive debt , a basket case business , & a global airline meltdown & nobody travelling - & they
are telling you people are going to pay money for this

& at the same time listen to more Virgin spin (if you are a creditor)

Wouldn't the creditors just be wanting to grab whatever cash they can

The arrogance of continuing to use leased aircraft that that you are miles behind in payments on is well very interesting
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Old 1st May 2020, 06:40
  #35 (permalink)  
 
Join Date: Apr 2010
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Originally Posted by Telfer86 View Post
Pardon my naivety but does the debt goes away when the company is liquidated & it is just a sale of hardware ?

The AOC is owned by the company so you have to buy the company to get the AOC , not my area but how can you say abbra caddabbra all debts disappear

If liquidated the debts go , but also the company goes & thus the AOC is gone

I find the amount owed to aircraft lessors incredible , nearly $ 2 000, 000, 000 or the cost of 20 A320 neos

They can't have been paying leasing costs for months or years , maybe five aircraft lessors each owed $ 400, 000 , 000

That is serious coin & not great form on the part of Virgin

How is the Airline able to fly aeroplanes around now( & incur further maintenance costs , devalue) that they don't own and have not paid lease fees on & are not currently paying any lease fees on.

Is that not a bit cheeky ?

Surely the right thing to do would be return the aircraft to their owner
Might need to dig deeper on leases as I think it’s not quite as you say. I’m not sure anyone can elaborate as it’s all pretty confidential stuff.

AirAsia wanted to push back payments for a month on its 330 fleet and were told when hell freezes over basically. I don’t think Virgin are years backed up.

They might pay quarterly, leasing companies could be using forward figures. Who knows.
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Old 1st May 2020, 06:50
  #36 (permalink)  
 
Join Date: Jul 2013
Location: Hong Kong
Posts: 5
Fingers crossed some sort of rescue deal/purchase can be negotiated. A lot of good people here, deserving to keep flying, and stay employed. A fair few are ex-PNG bush pilots - my ex-colleagues. Good luck to all.
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Old 1st May 2020, 06:55
  #37 (permalink)  
 
Join Date: Nov 2001
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It is also understood that KWM put their concerns in writing, telling Deloitte that after 60 days, lessors would take possession of aircraft, engines, technical records and so on, if administrators did not agree “to perform all future obligations”.
One wonders what, precisely, the lessors would do with the aircraft etc after taking possession of them.
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Old 1st May 2020, 07:51
  #38 (permalink)  
 
Join Date: May 2008
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Okay Telfer, I’ll try and explain it for you. Virgin is not years behind in leases. Normally leases are just a monthly expense, that would be paid for periodically out of cash flow. But once administration commenced , the leasing company becomes a creditor for the total cost of that lease, through to the end of the lease agreement. eg If you were one year into a ten year lease and entered VA, there is still another 9 years to run on that contract. The leasing company will be claiming a debt for the remaining 9 years of the lease. You could imagine how big this number could be for 60+ aircraft, with long leases to run.
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Old 1st May 2020, 08:26
  #39 (permalink)  
 
Join Date: Aug 2004
Location: Melbourne, Australia
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Jpjp:
Have you ever actually heard anyone say any of those things Sunfish ? Have you ever been in the room with a Saudi Prince, a Chinese billionaire or the head of a Venture Capital firm ? No ? I thought not.


Yes. That’s what they claimed to be.....

I left out the one who claimed to be the nephew of an Indonesian Government minister. He told our company that Indonesia was in the market for a new car registration computer system. We build and run it, he said, and we get $5 per car per year.The company spent over two million dollars scoping the system before it turned out the guy was an “entrepreneur’ who wanted to try the idea out. Nephew? No.

Then AUSTRADE arranged an interview for me in LA with a “major aerospace investor”. I was working for HdeH at the time. His “business plan” turned out to be us making defence stuff from the FSCM for him and selling it via Australia to thwart U.S. sanctions with him taking a commission for arranging these deals. I would still be in jail if that deal had legs.

Then there was the billionaire turkish businessman who wanted land in Geelong for a wool scouring plant. He waste two years of people’s time and money.

The venture capitalist with no capital, but big ideas......

etc., etc. , etc. The common theme is that they have no money but think they might be able to play both ends against the middle, create a deal out of thin air and take a commission.

If you haven’t met such characters, you’ve lived a sheltered life. Everybody with business experience has had to deal with clowns like these. I would expect several are in Deloittes list and Deloittes would know this is possible too. Some get around it by asking for $10,000 to get into the data room.

Sorry to be negative, but it’s the truth.
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Old 1st May 2020, 08:38
  #40 (permalink)  
 
Join Date: Jun 2009
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AC thanks, the only figure that really matters then is how much they are behind in payments that have fallen due

A leasing company was making that point the other day that Virgin were behind (& I don't know how much) in leasing payments & still flying the Aircraft around like
they owned the dam thing. Think it was an A320 doing runs out to the Pilbara

Thing all getting lost in the fog

Why would anyone touch this basket case of a "business" in these current circumstances

AC question for you : How do say abbra cadabbra & make a $7 B debt go away without liquidating a company , is it all getting naked chanting around the fire when you have a full moon etc etc. How do they do it ?

Last edited by Telfer86; 1st May 2020 at 09:14.
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